The 2011 travels industry performance review
An assessment of the travel industry reveals that the performance has taken a downward spiral in the last year. Despite the troubles in travels that we had at the start of the year and the resultant downward revenue trends following them we take this as a sign that we (the travel industry as a whole) have already implemented corrective steps and are now heading the right direction for a stronger performance the upcoming year.
Travels for agencies Rise in Sales
Overall however we have seen a rise in sales from travels, however most of the sales agencies have reported decreased revenue. So what can be deduced from these paradoxical figures? The larger agencies and those essentially running their operation from home have reported back better figures, because of their comparative size advantages and the high economies of scale that is associated with the larger agencies. The smaller home agencies have conversely gained from their reduced operating costs which have resulted in increased profitability. The advantages that these two ends of the spectrum have gained allowed them to concentrate on the generation of additional business.
Agencies take brunt for reduced numbers in travels
The mid sized agencies of travel trade, right in the middle of the spectrum, have taken the brunt of the reduced numbers and they have been more keen to wait and see how things turn up before they take any action; not the nicest of options however. They could very well learn from how the airline industry reacted and looked to solve their problems and emulate some of them.
Airlines implemented aggressive cost cutting in order to stay in the black and often their attempts lead to degraded service and resulted in lower customer satisfaction. Customers missed olives from their salads, pillows from the overhead bins during travels and the friendly customer service agents who would speak English as a native language. They quickly understood that cost cutting is not the only way to make profits and there are other aspects such as unbundling their services so that they could charge for services which they had provided for free so far.
Service Fees – Travels and Counseling
However travel agencies did not opt for that route and started to provide more value added services, thereby becoming more of a counseling expert rather than a selling expert. It is one thing if a business can survive without charging for service fees, but if it is not then the best option would be to look for incorporating service fee as a part of your business revenue strategy.