Sounds a bit crazy, doesn’t it? How could a travel agency be its own worst sales enemy? And, if somehow it was, why would any management team in its right mind allow the situation to continue?
Good questions – but not hard ones: in fact, both can be answered with two words – easily and oblivious. As you’ll see, it’s not terribly difficult for a travel agency to shoot itself in the sales foot. Management, for its part, is almost always looking at the situation but not seeing what’s important. If sales growth in the travel industry was a slam-dunk, an agency tripping over its shoelaces wouldn’t be a concern. But gaining traveler business and staying profitable is hard for everyone, so it’s essential that an agency’s feet get un-shot and shoelaces stay un-tripped. Let’s dive in.
While no two travel agencies are alike, most can agree on one thing: they only have so many employees and those employees only have so many working hours in the day. Not only would most agencies agree with that depiction, they all address it in similar ways: emphasizing focus; priorities; organization and accountability.
Here is the problem. It’s true: focused, prioritized, organized and accountable employees are more productive than those who aren’t. But what if the nature of the work itself is at the root of why an agency is failing keep pace with competitors and the travel industry as a whole? If that’s the case, then all the well-meaning management efforts to instill those effective work traits are simply a patch on something that needs major surgery.
Is Work Undermining Sales?
For the purpose of this discussion work doesn’t mean a list of tasks to be completed on any given day. Instead, it’s defined as a series of related tasks that move from step to step until a specific outcome is achieved. For example, making a reservation with a travel partner requires a sequence of actions and, until all the tasks are done that flow of work – or workflow – isn’t finished.
It’s important to realize travel agency workflow issues are very different from “things just not getting done on time!” Agencies frequently have valued employees famous for missing deadlines because they overlook small details or cause others to fall behind by not completing related activities when promised. These are bottlenecks caused by bad personal work habits. Workflow problems are company-wide issues that affect the performance of several – or many – people regardless of their work styles.
What to Look For
Within almost all travel businesses; whether a Travel Agency, Tour Operator or Travel Management Company – work, information and documents generally move between three types of operations: front office; mid-office and back office.
- Front Office: here’s where all the services provided to consumers are located, such as: contacting customers; creating travel plans; arranging bookings; publishing itineraries and modifying changing reservations.
- Mid-Office: this area is typical focused on: sales channels; suppliers; inventory and order management.
- Back Office: these operations are closely tied to “keeping the lights on”: accounting; payroll and reporting.
At the start, “oblivious” was given as the answer to the question - why would any management team in its right mind allow their agency to undermine its own sales? The point behind the answer is that it’s a challenge for travel management to recognize workflow problems. There are two reasons why this is the case.
Issue Creep: travel workflow weaknesses are typically slow to develop. Whether workflows are manual, automated or a combination of both, they were usually designed with the travel technology at the time to meet original and projected needs. However the vast majority of businesses – whether agencies, a tour operators or a Travel Management Company – simply do not revisit workflows to determine if changes in their business model, competitive landscape or the industry itself has left them behind.
Frog in the Heating Water: like the frog in the fable who waits too long to escape the boiling water, a gradual development of workflow inefficiencies can lull employees and management into becoming accustomed to – and accepting as normal – declining productivity and its impact on competitiveness. Well run enterprises avoid this by instituting and monitoring productivity metrics, but they are the exception.
What about the majority of travel agencies without workflow metrics and monitoring? How can they make a diagnosis and formulate a plan of action? Fortunately, symptoms of workflow inefficiencies are not hard to see with an educated eye. Here are examples, categorized by operational area.
- Front Office: add-on sales opportunities are difficult to share with other people; personalized customer information and travel profile is unavailable; ticket settlements are time-consuming.
- Mid-Office: transaction losses occur because sales are made with outdated prices or inaccurate availability; margins can’t easily be checked and validated; inability to provide sales with real-time tour/travel information across various media.
- Back Office: commissions are copied from spreadsheets and pasted into the payroll system; integration of general accounting with travel accounting is substantially manual; management and financial reporting is heavily supported by spreadsheets; limited in scope and slow to be available.
Taken individually these workflow problems may appear relatively minor, but collectively they will place a travel agency at a competitive disadvantage. After all, what customer cares why their agency provided outdated travel information and inaccurate tour prices? They’ll simply move to a competitor who doesn’t cause those issues.
The prevalence of workflow problems in the travel industry and their potential to undermine sales growth and profitability is a major reason why travel enterprise resource planning (Travel ERP) systems have seen rapid growth in popularity and adoption. They deliver on the promise of reducing operational costs with automation; making better decisions with more accurate reporting; and supporting sales with better travel partner integration. If the workflow symptoms in this blog are familiar but Travel ERP is not, learning more about that travel technology would be a good first step toward turning things around.