Survival Strategies for Travel Agents During Downturn

Win-win partnerships and new selling strategies are key to sustaining businesses and achieving success through the current downturn, according to Peter Smith, Vice President of Amadeus Asia Pacific’s Business Solution Group.

Speaking recently at a corporate travel event in the Philippines, Smith recommended that travel agencies should look for new collaborative opportunities and explore different selling strategies to stay ahead in today’s competitive and challenging marketplace.

“The travel agency channel remains an efficient and profitable channel and an essential sector of the industry, with many opportunities for growth,” said Smith. “Amadeus is committed to helping travel agencies improve their bottom line, particularly during the current downturn.”

Smith suggested four key areas where travel agencies should focus their attention:

- Cost and Efficiency Awareness: “In today’s economy, cost awareness is crucial,” said Smith. “Many travel agencies in Asia are recognising that Amadeus’ technology can help to improve efficiency and cut costs, through our Quality Control and Applications Server Based solutions. At the same time, agents must consider offering more value-based travel options for travellers who are now very budget-conscious.”

- Airline Alliances: Low Cost Carrier (LCC) travel is increasingly becoming the first choice for many travellers around the world today. In Asia Pacific alone, over 30 low cost airlines have emerged during the past decade and are growing at an unprecedented pace. “In addition to their partnerships with national and major full-service carriers, travel agents can work with LCCs and secondary carriers to package a destination and offer value deals to more regional destinations,” said Smith.

Competing with the Online Channel: Airlines are driving more business to their websites in an effort to cut costs, and consumers are looking for lower prices by booking direct on the Internet. So far in 2009, Amadeus has seen online travel agency bookings in Asia Pacific grow by 21% compared to the same period last year. Many travel agencies are concerned about this trend, seeing it as a significant business hurdle for 2009. However, there are actions that travel agencies can take to combat this threat, primarily by establishing their own online presence.

Industry Cooperation: Airline consolidation is increasingly common in Europe and the USA as carriers recognise that ‘going it alone’ may not be the right strategy for survival. Smith recommends that travel agencies should also seek partnerships that will benefit their business and the industry as a whole. “If travel agencies work together with tourism bodies, industry associations and government organisations, they can create attractive joint-promotions and packages that will boost travel volumes and create more business for all.” 

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