“ Make sure that your customers get the right, memorable experience with your company!”
For our new edition of Leadership Corner, we had the opportunity to discuss travel trends, business expansion and future plans with Daniel Ponzo, Managing Director at Zahid Travel Group.
In this article, we'll reveal how Zahid Travel managed to not only survive but also expand during Covid-19, what it takes for a travel agency to be cost-efficient and how to build the right structure for a strong comeback.
Let’s discuss Zahid Travel. If you would pitch Zahid, what would your pitch be? How are you different? What is your USP?
Daniel Ponzo: First of all, Zahid is part of a strong and solid group in Saudi Arabia. This gives the opportunity for every single company of the group to be supported for future investments, especially in a situation like the one we have lived in for the past 15 months. If we were not part of such a strong group, we would be in a completely different situation, and probably the transformation program that we have managed and started implementing would have not been possible.
We are a travel company that was fortunate enough to benefit from a strong name that gives a positive message to whomever we speak to, we are not seen as a travel agency that received negative feedback over the course of the past years. We've been in the market for the past 60 years and we've always been focused on delivering high-quality products to our corporate clients with this being possible thanks to our good relations with suppliers. The quality of the service, superior customer experience, and the reputation of being part of such a big group all have a very positive impact on our image in the country. You will always hear Zahid is a great family, with ethics, with all different companies of the group that aim for premium services.
At the end of the day, it's building trust through a strong brand name in the market and offering premium services to our end customers.
How was your experience in these last 3 years regarding the management of Zahid Travel?
Daniel Ponzo: I would say that the reason why I joined this group is that I felt very much aligned with the leadership and the company culture. I immediately felt, when I went through the discussions, that I belong to such a culture where a leader has the opportunity to truly manage the company and leave a footprint when the company needs a turnaround, so I really focused on making sure that I have the right cost structure, the tools to increase the gross margin and to motivate the people by giving a different internal organization to the business.
After implementing these measures, we were able to make the shift in the company and improve the operating results by approximately 90%. This was a big achievement in my first year in Zahid, but then 2020 started and all the good work and efforts that we have done were diminished and we had to start everything all over again.
Let’s get back in time! Every business had to make some decisions, adjust its resources and shift the plans! How did you shift your strategy for 2020? What were the main actions taken in the first couple of months?
Daniel Ponzo: The first measures were to go into detail with the cost structure and understand where we can cut costs. I discussed with the board and came to the conclusion that the group should not reduce its costs by cutting off salaries. That was the time when our employees needed our support. So instead of this measure, we decided to work on streamlining the holidays, reducing the number of leave days and we waited until mid-June to understand that we also needed to reduce the number of people. However, those remaining still had the entire wage.
We made sure we had a structure that can be as lean as possible for the revival of the business – because we needed to establish the pillars that we could later build upon. It was very important to keep a transparent communication with the suppliers, with our clients, and employees, so everyone could know what happens within Zahid. We had a lot of sessions where we could address all the issues we as an organization have encountered in each department.
We also needed to diversify our activities as a travel agency and expand to a new business model - which was already in the structure when I joined - but now was the time to build our DMC strategy and that was the beginning of our expansion into the domestic market. We invested in resources, products, and relationships and we are now a trustworthy DMC that can handle international clients.
In the midst of every crisis, lies great opportunity. What opportunities were out there for Zahid during the last year?
Daniel Ponzo: I would say that a great opportunity for us was that we focused on building this model for our DMC, on attracting the right people and management team for this model in parallel with analyzing our systems, what needs to improve, and start a digital transformation strategy. The main strategic pillars are now in place and we can further focus on improving them in the next 4-5 years. The purpose of all this strategy is that we can become more people-centric – which is a key success factor. We want to reach a level where our team understands what people-centric means because this is the end goal we aim to reach – increased customer satisfaction.
Would you change something that you did one year ago?
Daniel Ponzo: If I look at what we did last year in order to get to where we are today, I would not change much because we were able to achieve what we set out to do and that allowed us to transform the business. Maybe no one expected to see Zahid where it is today, especially in the context of the pandemic year. And all this happened due to the support of my board, my team and everyone who allowed me to have free hands on the business transformation.
The sustainability of the business is on everyone’s minds right now - how are Zahid’s goals progressing? And how do you see the upcoming years?
Daniel Ponzo: It’s going to be extremely challenging for sure. What we actually budgeted would not entirely happen, so I believe we’ll have to review a few things during this year, but we’ll further develop the strategy we started a few months ago. We'll now progress from the planning stage to the execution one, looking ahead at the long-term approach. I think 2021 will also be an unprosperous year, not as bad as 2020, but not with the expected outcome we would wish.
What role do you see technology playing in addressing travel recovery?
Daniel Ponzo: Technology is going to have a key role. We’re focusing on two main areas: our core business – corporate travel – and then the new business model, Zahid Travel as a DMC. And all this will be supported by the digital transformation plan.
We have to understand what we want to have in our future regarding the digitalization of our processes and all the types of benefits the digitalization will be giving to our employees and, most importantly, to our clients. This is the reason why I didn’t want to hire an IT manager, but rather a digital transformation manager because we needed the right skills for this transformation to happen. And we’ve been able to see the changes happening in the past months. We aim at having a different digital ecosystem in 2021, different from what we have today.
Tech will be key for corporate travel, for the DMC model as you can't handle travel without the right technology anymore. It’s a key element that needs to be managed as well as possible.
How do you see the evolution of the travel sector in the next 8 months?
Daniel Ponzo: It depends on the speed of the vaccine deployment, it depends on restrictions that the countries will implement or lift, it will depend on whether we’ll have to go through quarantine or not, the safety measures countries will take… there are many external factors that will affect the revival of the industry.
For now, it’s gratifying to know that there are so many travellers waiting to go back to their travel habits – whether we’re talking about leisure or corporate trips – so when the restrictions will be at a minimum, people will probably forget that Covid-19 even happened.
I think we have an important role when making sure that our customers get the right information about these restrictions or what safety measures are implemented in their destinations. Even now, we get calls about these restrictions that are really complicated to keep a track of, but important to acknowledge.
What advice do you have for any CEO today from the travel industry?
Daniel Ponzo: My advice would be to focus on having the right tech provider so your employees can carry on their tasks as well as possible and make sure that your customers get the right, memorable experience with your company, your online platform and your team!
These two will be the foundation elements in shifting your business towards growth and efficiency in 2021.