If asked to name industries most affected by the Internet since the 1990’s, most people would think of online retailers like Amazon – draining sales away from small and large store-based retailers; or perhaps the music industry – careening from vinyl to CD’s, CD’s to mp3s and ultimately to Spotify. Both are good answers. Another answer might be storefront travel agencies; certainly the widespread acceptance of online travel agencies (OTA) transformed the agency business model. However, the ultimate fate of the traditional agency remains an open question. Ironically, technology – which crippled the travel agency twenty years ago – may be the very thing that saves them in the 21st century.
Brick-and-mortar agencies suffered major blows from Internet and online bookings, declining in the U.S. by 59% between 1997 and 2013. Perhaps because travel is a more expensive and complex purchase than music or books, online bookings did not completely decimate the industry. In Europe, movement to online booking is growing – but not as quickly as the U.S., and in Germany the transition is even slower. As might be expected, luxury travel is much more resistant to the low price online appeal and corporations use agents at Travel Management Companies (TMC) to deliver both cost management and convenience services.
Many of today’s small or medium-sized storefront travel agencies are focused on specialized leisure travel packages. Inventory and terms are contracted directly with the supplier and maintained on spreadsheets; product/pricing content is brochure-based. Their travel website presentation is typically basic; lacking any booking functionality, relying instead on a “contact us” page with an inquiry form.
These travel agencies typically know a great deal about the services in their packages and also have extensive experience with the destinations and associated tour operators. This combined expertise is a good match for the recent surge of interest in unique and personalized travel. However, new competitors have emerged in the form of travel websites also offer customized tours and travel packages. Some of these sites are retail brokers for wholesalers and some are a retail web presence for the tour operator itself. These websites use leading-edge travel software to reach customers with an effective message of personalization. Accordingly, they are a very serious threat to the small storefront agencies.
Pragmatic Travel Technology Steps
Therefore, every travel agency owner who is seriously committed to the success of his business must become equally serious about acquiring competitive online capabilities; defined as travel software capable of an effective online presentation of travel services; communicating value propositions and pricing; and supporting secure and efficient bookings and transactions. Competing against social media with static content or mobile apps with inquiry forms is futile. Fortunately, the last several years have brought about innovations which make it possible for almost any sized agency to implement a pragmatic technology roadmap to online competitiveness.
- Software as a Service (SaaS): Take advantage of this new and innovative option for software deployment! Many travel technology providers now offer cloud versions of their software and sell access for a monthly fee, eliminating part of the expenses such as implementation and regular upgrades. With the SaaS alternative, it’s possible for small businesses to afford software that levels the playing field with much larger competitors.
- Website Platform: There are many affordable website platforms with intuitive design; in-line content editing (non-technical, MSOffice-like revisions and refreshes of content & media); embedded SEO tools (drives traffic); device responsiveness (good views on laptops or smartphones) and social media integration (easy “likes” or posts). Your travel website will quickly meet customer expectations.
- Booking Engine: This software makes it possible for website visitors to: 1) search through an accurate inventory of packages - or individual flights, hotels, activities and transfers; 2) look at real-time rates and availability; 3) make decisions, book travel products and receive confirmation.
- Inventory Management: This software provides accurate, real-time information to the booking engine by managing availability, inventory and net prices (customized for sales channels by mark-ups and commissions; configured for season,
customer type and promotions). This management covers packages, accommodations, transportation, transfers and specialized activities – and can be configured to apply various business rules and policies.
The goal of these steps is to provide brick-and-mortar agencies with a practical, reasonably priced, timely path to a professional, competitive and highly transactional online presence. This combination of user-friendly content revision and refreshment, combined with real-time inventory & pricing management – integrated with a flexible booking engine, achieves that presence. Would additional capabilities be helpful? Certainly, and software from any leading provider will be designed to grow with a customer’s business.