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Industry Leaders Address Economy at PhocusWright Conference

December 5, 2008 By: Eric Butterman


I weave beyond the shimmering pool at the Renaissance Hotel in Hollywood, with its elegant white chairs baking in the California sun, at the PhocusWright Conference. Entering through sweeping black curtains, there lies center stage. Sam Gilliland, CEO of Sabre, can barely be made out beyond a thousand chairs and large video cameras pinned on him as he talks of the heralded GDS’ future plans. In the crowd, PhocusWright analysts sport impressive headsets and wait to ask questions of the audience, the whole event on larger than life screens. Taking all this in, you’d believe the travel industry had never been better. But we all know better. Getting past the opulence, if you listen to Gilliland’s words, you hear unmistakable cautiousness. This won’t be a year of massive investment. It can’t be.

Still, amidst the doom and gloom, oil prices have plummeted which, if it doesn’t bring airline prices down with it, will at least stabilize the market. The car trip, on the other hand, becomes favorable. Douglas Quinby, senior analyst for PhocusWright, believes that agents should consider that route for commissions. “If people were ever going to take that cross country road trip, this would be the time,” he said. "From hotels to stay at to attractions along the way, agents can get their clients interested by approaching them.”

Hence, the problem. Agent repeat business stays below 20 percent because agents aren’t being as aggressive as they need to be. Joe Romans, vice president of sales for Revelex, a travel technology company housed near the front of the exhibition floor, is telling, no, pleading with agents to get aggressive before they’re forced out of business. “Many of our clients don’t even know half the tools we can offer them,” he said. “Now all of a sudden they’re saying, ‘I didn’t know you could keep up with clients this way. I didn’t know we could track this and that.’ The reason is they didn’t want to. Each agent needs to make a commitment to sitting down and watching 10 webinars on something they don’t know about. It can be on initial selling strategy or offering new products to existing clients, but it’s time to expand the tools you have available.”

Romans says agents also have to do a better job of letting clients know just how great deals can be when times are tough. “Right now Las Vegas seems like it’s completely empty,” he said. “Cruise lines have many openings for trips. Show the clients how much supply is out there and how much they are saving as compared to the past. This bad economic climate is a chance for those with any money at all to do the trips of a lifetime. They may not be seeking it out, but it doesn’t mean they wouldn’t buy if you showed them what they’re missing out on.”

John Diamond, CEO of ekit, specializing in communications technology, thinks that phone-related deals can be an advantage for them during new economic challenges— and for agents. “We’ve actually seen fairly steady business selling overseas travel phones,” he said. “I see this as a primary area for travel agents to get commissions because travelers no longer want to just ignore calls for a week or two. At the same time, many of them don’t know about how inexpensive SIM cards can be. Agents need to be asking themselves about what new needs are on the horizon and mobile technology is one of them.”

David Sifry, CEO of Offbeat Guides, specializing in customized guidebooks, also believes there needs to be more focus on smaller value-adds to trips. “Our tour guides literally are created from an individual itinerary— we get the information on what the traveler is interested in and we create a book just for them for less than $30,” he said. “That’s what today’s customer is looking for. We live in a time where people get things more and more exactly the way they want it and they want a travel agent who’s going to complement that need. There’s commission involved but I believe an agent only has to start keeping track of adding little extras and seeing how many customers come back over time because of it. This is about seeing the difference between products that come off as pressure sales and those that are honestly making your client’s life easier.”

Caught In The Web

Charel van Dam, project manager for the Netherlands Board of Tourism and Conventions, believed the Phocuswright Conference brought together the right people but needed a bit more innovation on the Web side. “You see a lot of travel companies right now struggling to put out something new for the Internet,” he said, “but many of the new products presented lacked inspiration. One was about creating websites almost instantly but we all know it takes time to make a good site.”

Traveler.com CEO Jonathan Alford, who’s slowly rolling his company’s strategy out, agreed. “Whether it’s travel agent-based or other travel sites, I felt that area was overlooked," he said. "I didn’t hear as much about community as I could. You need to get travelers excited by offering them something right from the moment they click to you. How can you they feel you can sell them great travel experiences if they’re bored just coming to your site?”

Michael O’Connell, vice president of distribution for LeisureLink, a bookings solutions company, also wanted to see more about social networking. “The travel industry still hasn’t fully taken advantage of social networking and it’s become the key form of communication for a growing segment,” he said. “Now social networkers want everyone to know what city they’re staying in for any given week. If an agent is also a part of that world, they’re likely to gain that business because we tend to buy from those who are tuned into the same things we are.”

Closing Of An Era?

As the conference closed, several people wondered if next year’s event would see the same level of “no expense spared.” Had this been about putting on a show or an act when it came to the travel industry’s health? O’Connell said PhocusWright CEO Philip Wolf told him that about the same amount of attendees came this year as the year before.

This would seem like good news except for one point: shouldn’t attendance always be growing?


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