Change. Survival. Reconstruction.
Updated: Aug 3, 2021
In February we were talking to our clients, travel agencies, about strategy and development projects for 2-3 years, accelerated growth, and new destinations for their portfolio. The focus of travel agencies was on the continuous increase of revenues by diversifying sales channels, given the fact that the demand and travel needs have constantly evolved in recent years. The volumes generated by the demand for outbound tourism represented 70-80% of the business of an agency.
Starting March, we have adapted to the new reality in the tourism industry, offering consulting and workshops related to strategies with survival scenarios modeled on the basis of reduced income forecasts for 6-9 months.
We moved on to financial analysis with scenarios for impact and strategies with domestic tourism products within just 10 days. All this while 70% of outbound sales were being rescheduled or canceled.
This meant a rapid adaptation to change in an uncomfortable VUCA context - volatile, uncertain, complex, and ambiguous - where control is no longer held by anyone.
The first 3 months were about resignation and acceptance.
The role and the work of the travel agent are changing when we talk about new sales, both for leisure and for the corporate side. The fact that, despite travel restrictions, there were customers who chose still to go on holiday abroad, brought the agent some additional challenges related to how he can ensure the safety and health of the travelers. Not to mention the uncertainties caused by the decisions of the authorities of each country, communicated with delay and unclear.
The agent must be constantly informed on how the trip to the destination is carried out, what is the situation at the destination and what happens when his customer returns home.
For us as consultants, it was essential to understand how the buyer's purchasing behavior has changed and how the agency can support the agent in collecting information from a multitude of official and unofficial sources in order to continue to convey confidence in the services bought.
The operational analyzes made in the last 2 months, we see that the travel agent now spends, on average, 60% more time in discussions with customers in the pre-purchase and reservation part and 50% after the reservation is made. This is in addition to at least one hour a day, dedicated to the search for information about the changes that occurred as a result of the authorities' decisions.
The cost of the agency per order increases due to the time spent by the agent on each traveler, at the same time the number of passengers is decreasing, and in the current context, in which supply far exceeds demand, we cannot think about increasing the service fee accordingly to the time spent with the customer.
Travel agencies need solutions to streamline the way they work and process in this period of transition to the new normal in order to maintain price competitiveness and as such a level of revenue to ensure survival.
One of the solutions we are proposing was the analysis of the new booking workflow of products and the automation of post-booking processes, in order to free the agent's time of redundant steps, so that he can spend more time with the customers. The change has been possible through technology and the measured productivity indicators have been improved by up to 40% so far.
The automation of workflows and manual processes offers in addition to increased efficiency and better productivity, increases the visibility of the agent's work, and contributes to its quality. When an agent gets involved in multiple orders, which generates revenue for the agency in the same number of hours worked, it leads to more productivity. More productivity means saving resources for the agency, as time and money are the goal of survival.
Automation helps by being a flexible tool, supporting expansion when the agency's business grows, but also facilitating contracting activity when demand decreases in a relatively short time.
Learn how you can improve the way travel agents work through technology solutions. We invite you to benefit from a consulting session by accessing the link below.