Innovation key to busine ss growth
According to a recent Neilsen report, over half the world’s travellers use the internet to book their holidays to new destinations around the world; and high street travel agents are really a dying breed.
The onslaught of the internet is probably the biggest affliction hitting travel agents across the world. On a regional level, too, while this is a major concern it is not the only one. Reflecting on them are the region’s top three agencies and travel operators, Dnata, SNTTA and Net Group who also elaborate on the appropriate measures they have taken to squarely meet the challenges that afflict their trade.
“It is difficult to point out any one concern. But generally speaking I would say the shortage of rooms in both Dubai and Abu Dhabi is proving a challenge,” said Ali Z A Abu Monassar, vice-chairman, Net Group.
As a result the Net Group is being compelled to refuse business to other destinations – which isn’t easy for any agent or group, and more so for those specialised in particular areas such as MICE.
Not being able to provide customers with what they need, especially after carrying out aggressive promotional and marketing campaigns, is indeed disconcerting. “However, I think this will get better by the end of the year. Abu Dhabi, will take another two years, but in Dubai a large number of rooms are expected to be ready by the end of this year. Today since most of the rooms in the emirates are overbooked or full, we encourage travel to the region in general, because we believe that the country cannot survive by itself. It has to merge and combine other destinations, which will only benefit UAE in the long run,” he continued.
For SNTTA, the policy of ‘No Commissions’, introduced by some of the European airlines since last year has compelled the introduction of an additional fee for issuing tickets. “Some clients are unhappy with the extra amount we are forced to recover from them. We on the other hand find it difficult to convince them about our genuine difficulties. However, this is not a major concern as most of the local major airlines are still giving us commissions,” said M Zafar Imam, general manager, SNTTA.
Net Groups too, follows the same policy. “As far as airline commissions go, they have been reduced, but not completely lost. We are on zero commissions, but are adding that to the client. So instead of giving the ticket with the commission, we give a net amount and add the cost of our services,” said Abu Monasser.
SNTTA goes one step further in trying to find a solution: “While airlines and hotels have huge marketing budgets to promote and market their product, agencies don’t have that. Instead we look at other options like summer promotions, which include the use of free car rentals. This helps us to reach out to our customers. SNTTA’s biggest asset is its well qualified staff. Excellent training ensures complete satisfaction with the product. Today, our staff is better equipped than any other agency in the UAE, and we count as the first ISO certified travel company in the UAE,” said Imam.
But back to the internet, which is proving to be the bane of the trade as far as the travel trade operators business goes. However, many agencies are recognizing that incorporating this reality in their operations and combating it upfront are perhaps the best way forward. “With prolific options available on the Internet, travellers are turning to making online bookings. However, it is yet to become a major concern in this part of the world, where internet bookings are picking up, albeit slowly. Convenient access is denied to over 75 per cent of the people. Security issues with revealing credit card details on the internet are common amongst people engaging in online bookings. But still, we are losing customers. In future this will prove a major threat,” said Imam.
Combating these issues has meant firstly the creation of an interactive active website, which allows travellers to book and pay online. “Booking online on our website ensures visitors get a choice of accommodation at competitive fares. Whilst individual airlines have to indulge in aggressive marketing, we just have to direct travellers to our website,” he added.
Dnata on the other hand has chosen to combat this issue by focusing on the wholesale and retail business in key areas, where the agency enjoys a clear value-add on advantage such as in high-end leisure travel, which requires more personalised service.
“We have also enhanced our 24-hour call centre services and consolidated our product offering for corporate travel. Corporates have moved to transaction and management fees and they pay for the services they consume. Therefore corporate agents need to step up to the plate and offer a full portfolio of services to meet the clients’ requirements – simply booking a ticket is no longer adequate,” said Iain Andrews, senior vice president, Dnata Agencies. The firm is all set to diversify into online booking services in the near future.
“However, our travel outlets and 24-hour call centers will remain a core part of our business in the foreseeable future. We intend to exploit the best e-commerce has to offer and couple this with the huge benefits we can add through our extensive network. The efficiency of the web can be used in conjunction with the personal interaction at contact centers and face-to-face transactions - online and more ‘traditional’ channels should be complementary and not mutually exclusive,” he added.
But this step is merely to prepare for the future. Like SNTTA’s M Zafar Imam, Andrews feels the trend of online booking is still in its infant stages in the region as compared to mature markets in Europe and USA owing to several reasons – the late adoption of credit cards, online infrastructure and policing.
“However, although figures for internet travel bookings in the region are growing, we find that most customers still prefer to deal with someone personally, either via telephone or face-to-face at a travel outlet, more so when customers have more complex itineraries or requirements, it is travel agents who can offer customisation and provide recommendations, not possible on an online portal,” he said.
Like Dnata, the Net Group, too will establish its own online booking portal. “This will be a global online system accessible from anywhere at any time. General information, quotations, brochures, and invoices can all be accessed through this website. It is important to move ahead with the technology procedures because today if we don’t update and improve our online technology systems, we will be left behind,” said Abu Monassar.
Besides the Internet scourge, lain Andrews, senior vice president, Dnata Agencies believes that tourism boards and airlines need to engage more with the travel agents, providing them with the correct information, support and incentives. “There has been a lot of focus on direct out reach to consumers, but not enough to travel agents. Tourism and travel in the region is booming and there is so much potential out there yet to be tapped. Travel agents can play a key role in feeding and supporting growth in the region,” he said.
The second affliction is the shortage of qualified travel professionals in the region to facilitate business growth and meet customer demand. “Training is probably the only viable solution in the medium to long term and the industry needs to invest in this area,” he continued.
Also the speed with which the region’s travel industry responds to changes in customer tastes and industry developments has to improve. Andrews concluded: “We can learn more from international best practice and I also believe greater use of IT and electronic solutions will contribute to addressing the issue.”
(Contributions by Shalu Chandran, Jonna Simon and Manisha Koshy)