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Published on Friday, May 21, 2004

Travel agents fighting back

A review of TTI’s recent Spring conference, by Paul Richer, Senior Partner, Genesys – The Travel Technology Consultancy

How can agents survive in the increasingly cut-throat business of selling travel? How can they gain competitive advantage over the travel suppliers who once used to be their partners, and who are now trying to cut them out of the distribution chain? How are they going to ensure that their profits are not lost to direct-sell operators and online competitors?

Travel Technology Initiative’s 2004 Spring conference, "Travel Agents Fighting Back", tackled these points, giving centre stage to travel agents that have successfully adapted their business models and harnessed technology to guarantee their long-term survival.

According to several speakers, low salaries, poor customer service training and failure to recognise and act upon the opportunities afforded by the Internet, are some of the key issues that are holding travel agents back.

Truly empowered travel professionals, said Travel Counsellors founder David Speakman understand that their experience, coupled with one-to-one relationships with their customers are their greatest assets. By bringing these assets to Travel Counsellors, he continued, his sales staff earn high levels of commission, achieving far better than average pay. They benefit from the use of especially designed IT tools to support their sales activity and monitor their performance.

Paul Clayton, head of information technology at Global Travel Group indicated another trend starting to make itself felt: agents beating operators at their own game. Global is one of several travel agency groupings that are contracting, packaging and selling their own products, therefore taking an extra chunk of profit from the value chain.

Norman Gage, director of business travel at Advantage Travel Centres, was quite clear that agents should not underestimate their buying power. He recommended that, through consortia, agents should pool their resources to negotiate best-available rates with their suppliers.

In his keynote speech, Ian Reynolds, chief executive of ABTA, stressed the importance of improving service, effectively transforming the agent into a customer-focused ‘independent travel expert’ who may charge service fees for consultation.

However, David Jones of Amadeus remarked that the charging of service fees, so far the domain of the business travel agent, may be a less popular option in the leisure travel market. He thought that agents should focus on improving their productivity through service automation, whilst gaining more control over the content offered to consumers and adding value by choosing the right partners.

Agents currently do not make the most of their relationships with customers, according to Page and Moy’s sales & marketing director, Patrick Cherry. He stated that improved pre- and post-sales communications, as well as the effective application of customer care skills, are key to the future survival and prosperity of travel agents; ensuring that the relationship with the consumer is nourished and kept alive at every stage of its lifetime.

Jeff Petar of echoed this view. He stressed the importance of "getting the word out", especially if the agent in question operates within a niche market. He encourages agents to spend more on their marketing campaigns.

The overwhelming message emerging from the conference is that, in challenging times, agents should not lose hope in the viability of their businesses. Rather they should adapt to the changing environment in which they have to compete and cooperate with each other. The need to negotiate the best deals with travel suppliers and the requirement for harnessing ever more sophisticated technology means that agents will find it harder and harder to go it alone. However, independent agents are not going to die out. By operating in groupings, they have increased negotiating power and can share the cost of technology. This is already happening now and is the clear path towards future prosperity.

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