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Agents Must Take Client Services to New LevelsSeptember 30, 2010 By: George Dooley
Travel agents face tough choices if they hope to find any pots of gold in the years ahead, a new survey by Amadeus titled “The Travel Gold Rush 2020” argues. Designed to provoke debate within the travel industry, the study is worth a read by travel agents concerned with their future. One certainty, finding pots of gold over the next decade will not be easy for leisure or business agents, offline or online.
One central theme in the study is rapid, continuing change. Agents face challenges with the demise of commission-based travel and increasing use of the internet. What the study calls traditional Face 2 Face (F2F) agents will have to “reinvent their role as “bespoke” travel advisors and as a trusted source of information. Travel is seen as an increasingly seamless value chain rather than unrelated services.
“Agents may face more challenges than airlines in exploiting a generic demand for their services,” Amadeus says. “Nonetheless, a key issue is likely to be the repositioning of F2F agents to stress their ability to provide services to customers. One possibility is that agents may become “lifestyle managers”, providing higher-margin, tailored services to consumers (e.g. health and fitness or less regular experiences) in their home countries and abroad.”
The key challenge is whether F2F agents will remain relevant in an era of changing consumer tastes and the rise of online booking and self-service. Agents will have to scramble to develop new revenue streams, use technology effectively and cope with tough competition for client loyalties. Above all they will have to deliver value and grasp traveler motivation and preferences both on the leisure and business side.
“Some 60 percent of travel sales are already managed online in some regions such as Scandinavia,” the study warns. “From this point of view the future would see people paying for a service that accesses other people’s research about a destination, making F2F contact less relevant. However, prior to the rise of the internet, agents’ effective monopoly over most travel information sources meant that customers were in some respects told what they wanted. The breaking of this ‘information monopoly’ would seem to have resulted in better informed - and more demanding – customers. Apart from simply shifting away from agents this means that service delivery expectations are likely to have risen over time for those who might consider F2F agents.”
For agents, the future is likely to be about focusing on market niches and specialization, Amadeus says. The fragmentation of the market means that a very large number of niches could emerge. “For example, at one level, segmentation could be an experience level adventure, cultural, or sun, sea and sand travel. In combination with (or separate from) this, segmentation may also be on a geographical basis – e.g. specializing in tourism in areas of Egypt or Brazil,” Amadeus says.
While many might argue that specialization is well advanced among professional agents in the U.S. more may be coming. One point made is that F2F agents have transformed the physical look of their shop fronts, and have taken on an appearance closer to that of lifestyle goods, re-emphasizing their role as specialists and suppliers of luxury goods. “Specialized areas may prove to be high yield ones, particularly for those agents that are first movers, take the initiative and provide a what’s next offer,” Amadeus says.
One responder also pointed out that there might also be some blurring of tastes at particular points of the travel cycle. For example, adventure backpackers may wish to splash out on luxury accommodation at the end of their trip. “Careful management of such nuances, personalized service and attention to detail could therefore also be a source of revenue yield for F2F agents in the future,” the study states.
The Amadeus study concludes that F2F agents will increasingly focus on niche markets and will find advantages in consumers thirst for new destinations. Easing the stress faced by travelers is another dimension of new realities, as is providing ‘trusted traveler’ services that will provide opportunities for airlines and agents respectively. Agents can become sages, saving clients time and money and offering personalized support.
Many interviewees in the study – done for Amadeus by Oxford Economics - pointed to the opportunity for agents to become a trusted brand. Travel choices are becoming increasingly fragmented and becoming more diverse, meaning agents will remain an important resource.- especially for travelers heading to less known destinations.
It is likely that successful agents will exploit their traditional role as information aggregators, the study reports - saving time and money for their clients. “However, this is dependent on their willingness to embrace and work with new technologies rather than against them,” Amadeus says, warning of changing consumer tastes.
Amadeus’ conclusion will be reassuring to many who can incorporate traditional strengths while applying new technologies. “The ‘new’ agents will not be like F2F agents of the past. Instead, technology will be part of what fuels their relevance and makes them able to fulfill the needs of customers,” Amadeus says. “Having access to better agent interfaces, greater content and information on travel options and the ability to interact with customers in new and different ways means that they will be able to provide a superior level of customer service not previously possible.”
Amadeus deserves thanks for initiating the study that offers a welcomed global perspective on travel, tourism, agents and airlines. It should also provoke some thought among agents and agency leaders about the post recession future.
Editor’s Note: The Travel Gold Rush 2020 report is part of the Amadeus Traveler Series, which is a global initiative designed to stimulate new thinking and innovation in the travel sector. To download a free copy of the report, visit www.amadeus.com/goldrush2020.