“Revolt, Reform or Perish” – the writing on the wall is very loud and clear for the travel agencies in the zero commission eras. While TAAI, TAFI and sundries are already through with their measures of revolt, there is a lot of talk around the town and everyone in the industry seems to be taking of reform. For traditional ticketing agents it’s almost like a comrade thinking of privatization reforms. The big ticket question here is “How to Reform/ evolve to outperform in the Zero Agency Commission Era”. It’s time for travel agents to go back to drawing board and redraw and reshape their business models. I would like to propose a model of travel agency reform and call this reformist model “Kiss Me” (No, I’m not getting kinky in these trying and testing times).
“Kiss Me” Model of Travel Agency Reform
- K – Knowledge
- I – Innovation
- S – Service Driven
- S – Specialization (Developing Core Competencies)
- M – Meager Cost
- E – Evolve
Let’s see how this “Kiss Me” model of travel agency reform can help agencies evolve into a service driven, high performance, and profitable enterprise in the regime of Zero Travel Agency Commission.
Most important and the most ignored out of all the components. I have always believed travel agents are an ill informed community, when it comes to the attributes of the products they sell, be it airlines, hotels, destinations or other derivatives. Most of the front line staff has little or no clue about the product they are selling. A hit and miss approach to customer counseling means a shaken customer confidence and his shift to alternate sources for information like website and travel portals. Questions pertaining to detailed information about facilities at the airports, aircraft configurations, special service requirements of airlines (like procedure for carrying a gun), destination information like special events and outback activities are often answered with a frown by the travel agent.
The answer clearly lies in getting and imparting knowledge to self and staff on all the products the particular staff is destined to handle and give that extra confidence to staff in his / her job profile. Destination specialist programs offered by tourism boards, certificate training programs from GDS and thorough search of airline website are some of the steps that might help. A weekly subject of interest may be taken up and studied/ researched by all the staff in the agency and on the weekend a short test concerning the same may be given to them. This will generate an element of interest and competition, and your goal of increased product knowledge will be achieved.
Objective is clear, in this competitive era when the airline websites may offer a lower fare than travel agents in future; the customer will rely on a travel agent for his knowledge of multiple products. Travel Agency needs to offer information/ knowledge to the customers which they would normally not get from a website. The leisure and business traveler must be ready to pay an incremental fee on the fare for the value addition by the travel agency. Product knowledge and information is one such value which agencies may add to their final products.
Innovation in customer handling, pricing, promotion or product/ service attributes may differentiate an agency from its clan and make it stand out from the competition. A simple case of “Meet & Assist” being offered by an agency (for a fee) to its business and leisure customers at the airports will make it a preferred choice for the segment of traveler who needs assistance at the airports, like first time travelers, ladies traveling with infant/ kids, high profile business traveler, honeymooners (a flower bunch delivered at the airport will make their journey memorable). The agency using such innovation can provide this service to the customers of other travel agencies as well (for a fee of course). Other innovations like customer profiling, innovations in pricing (guaranteeing the lowest fare possible), mobile message alerts/ email alerts for flights, reserving preferred seats, rooms etc will be noticed and appreciated by the customers. A simple feedback call to customers on their return will show the agency’s concern and give valuable inputs. Innovative holiday packages like ladies only group package or a gourmet cuisine package of Rajasthan, or an airport transfer on a Harley Davidson, transfer for a dinner from the hotel on a camel are the kinds of innovation agencies need to suggest and arrange for its customers.
Innovation is the biggest attribute which can give a distinct identity to an agency and give customers a value addition which they are ready to pay for.
Everyone talks of service, but it holds different meaning for different people. Agencies need to replace the concept of sales and marketing manager/ executives with Relationship Managers/ Executives (role reversal and not just change in Designations) to focus more on relationships with the customers. Service quality is to be identified and meant as building of bonds with customers and other markets or groups to ensure long term relationships of mutual advantage. Customer service parameters of pre transaction, transaction and post transaction considerations related to the exchange process with the customer needs to be handled with care. Every agency should necessarily involve itself in understanding what the customer buys and determining how additional value can be added to the product or services being offered, for this additional value will attract a relevant service fee. Agencies should focus on:
- Customer retention
- Orientation of product/ service benefits to the customers
- Enter into long term customer relationships
- High customer service emphasis
- High customer commitment
- High customer contact
- Quality driven product/services, processes and people (Developing a quality culture)
- Follow up and feedback procedures
- Objective handling on service failures/ deficiency in services
Specialization is an important way to generate propositional knowledge by applying general knowledge. It’s the opposite of generalization and the way we have seen the demise of general medical practitioners and rise of specialized medicos, travel agents needs to specialize and develop core competencies to survive in the zero commission era. Agency needs to spell all its area of operations and specialize in the one where it has skills and means to develop core competencies. It’s also important to shelve the areas which are proving futile and inoperative.
Some areas where agencies can specialize and develop core competencies:
3. Innovative and upcoming concepts in Indian tourism
- a. Sports tourism
- b. Heritage tourism
- c. Spa tourism
- d. Space tourism
- e. Wedding tourism
- f. Religious tourism
- g. Wildlife tourism
- h. Responsible/ Sustainable tourism
- i. Wine tourism
- j. Romance tourism
- k. Self guided tourism
- l. Theme tourism
- m. Rural tourism
- n. Self guided tours
4. Specialized services like
- Visa Services
- Corporate account handling
- Destination management services
- Hotel representations
- Key account management
5. Cater to specialized segments
- VFS (Visiting Friends and Relatives)
- Government and Public sector
- Business Travel
- Walk in / adhoc customers
- Reference business through chain of advocators (who recommend the agency)
A penny saved is a penny earned. High inflation and cost pressures from spiraling salaries and property rentals, agencies are compounded with the problems of vanishing revenue base and sky rocketing costs. Service fee concept is expected to exert a lot of pressure on the margins and agents have to review their costs sheets and make deliberate cuts. Cost consciousness may include:
1. Staff costs needs to review and the utility and contribution of each staff to the sales/ profits measured against targets. Also ascertain opportunity cost of individual staff and introduce multi tasking in staff while performing their specialized functions. Technology is aiding the staff and more productivity can be expected out of each individual. Lay off in case of excess staff.
2. Fixed costs like rentals, electricity etc constitute a major portion of the costs and steps like consolidating operations of different branches in same city (at least merging low performing branches) can help save on rentals. But clear and deep thinking need to made and a cost/ benefit analysis be done before such decision making.
3. Promotional budget needs to be reviewed and low costs means of promotion like one to one customer interactions, regular mailers and tele calling can be more effective than advertising. Again a cost/ benefit analysis of the advertising medium and costs need to be done before initiating any new campaign.
4. Variable costs – Management need to keep a close and regular check on variable costs which most fluctuate with sale levels. Diverse and detailed reports on cost structure will help keep a track and control over costs.
Lastly, evolve – or readiness to predict, recognize, accept and implement changes. An agency should focus itself on new and upcoming trends in the industry and keep itself abreast of all the issues that may affect its industry. An agency which evolves with time will be better prepared to alter its business models with time and emerge a winner.
I advocate the following steps for implementing the “Kiss Me” model of travel agency reform: (to be followed in the order they are given)
1. Environment Scanning (Internal and External)
2. Establishing Objectives
3. Market Segmentation
4. Developing Core Competencies
5. Developing right Product Mix
6. Establishing successful pricing policies
7. Promotion Mix
8. Distribution Strategies
9. Managing People
10. Developing effective service delivery mechanisms
It’s time we change the way we see our businesses and take the right step forward in accepting and facing the challenges in front of us. Let’s emerge winners and challenge the dominance in an industry dominated and dictated by the airlines. Let’s say “Kiss (Keep it Simple and Short) Me” and incorporate the changes in our revenue base effectively.
“Long Live the Travel Agent”