STEP – BY – STEP GUIDE TO IMPLEMENTING E-TRAVEL BUSINESS STRATEGY

STEP – BY – STEP  GUIDE  TO  IMPLEMENTING  E-TRAVEL BUSINESS  STRATEGY

Once a small travel agency commits to e-commerce and e-business, there must be a careful implementation of the strategy so as to prevent the least disruptions of ongoing operations.  Each agency will have its own evolution depending on the pressures felt in its market segment (e.g. generalist vs. specialist; vacation vs.  corporate; branded franchisee vs. independent agent, etc.).  However, small agencies that have had little experience with the Internet (which includes the majority of agents) will most likely evolve through three phases:

  • Phase 1 – Scaling your strategy and resources: Small agencies must first solidify ebusiness initiatives by: (1) integrating online and offline activities, (2) sharing IT through alliances.
  • Phase 2 – Building infrastructure and competencies: Then they must build their key assets: (3) integrated Front and Back Office applications, and (4) competent human resources.
  • Phase 3 – Focusing applications on service excellence: Finally, systems must be exploited to: (5) build customer loyalty, (6) gather market intelligence, (7) provide customised products based on intelligence, and (8) identify high growth niches in which to specialise.

Scaling your strategy and resources

Step 1 – Transforming Into a “click & mortar” travel agency

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Nowadays, a great number of traditional travel agencies, or so-called “brick and mortar” agencies are pursuing an online strategy, and are changing themselves to become “click and mortar” agencies.  There are combining two types of business: offline and online. As discount brockage chief Charles Schwab said, “Future business success will hinge not on pitting brick-and-mortar companies against online-only efforts, but in successfully integrating the two”.

Combined “Brick & Click” model now allows consumers to choose how to access travel products and services based on their individual preferences (e.g., Uniglobe, which has made the most efforts to integrate its bricks and clicks).

Consumers have access on the Web to a comprehensive array of innovative travel plans and tools, technology and customer services.  There are on the market some booking engines that simultaneously search for the lowest airfares and travel dates while also displaying alternate available dates in a single screen.   New Web sites were launched offering several innovative features including a package channel and a tours channel.

Therefore, to become a click and mortar agency, at least 2 major efforts must be accomplished:

  • Get connected to the Internet: The following is a review of a number of options that would allow an agency to get connected to the Internet. These include modems, mini-routers and a server connected with a router. On modems, this is the way many small organisations started because the cost is low.  The downside is that while you get an Internet connection, there is no “professional” e-mail, no network security and no Web publishing.  The mini-routers solution offers Internet connectivity for the whole office at a low cost, but again, no “professional” e-mail,  no network security and no Web publishing.

The third option is a server connected with a router, but that this can be an expensive option that would be out of the rearch of many small agencies and would require a technical specialist to connect it.  To fill in the gap, some application service providers have developed an all-in-one solution designed for small businesses with between five and 50 users.  It is a hardware solution that provides “professional” e-mail, network security, Web publishing and Internet access.

  • Get found on the Internet: While many agencies simply put up their Web sites and hope for the best, it is simply not good enough as getting found on the Net can be a “complex” game. The following are four key issues that agencies should look at when putting up a Web site:

Making sure it serves “real” travellers;

Making sure you get found;

Getting it on the screen fast;

Making sure it works technically and in all browsers. 

In order to get people onto your site it helps if you besome a specialist.  For agencies, there are specialities, such as scuba diving, cruises, golf, tennis, etc.  that can be used to attract travellers to the site.  On getting found on the Net, travel agencies have to be warned against making the assumption that many do that the site has to have fancy graphics and special effects.  In many cases this could be a negative factor.

Agencies should optimize their site’s content and layout for all search engines.  And it is with search engines that things get a little tricky, even complicated.

Sites have to be registered with the search engines and then regularly updated.  The goal is to get your site into the top ten that appear in a search for your particular area of expertise.

People are busy today and that means your site needs to get on screen fast, so travel agencies are advised to cut the clutter.  Travel agencies must make sure that the site works technically and in all browsers.  It has to be emphasized that it is wise for a travel agency no to get ahead of the market and the technology that is actually in use.

Step 2 – Joining alliances

Worried travel agents are just one sign that although on-line travel still has a long way to go in many countries, it is already starting to shake up established relationships in the industry.

In the new world of travel sales, historically low-tech travel agencies are realising that change is the key to survival.  Internet companies, as well as airlines and other travel suppliers that offer online booking services, are pushing them out of the market.

In 1999 alone, corporate travellers dropped more than $7 billion on travel expenses online.  The online travel market will reach $20 billion by 2001.  The two-pronged menace of dwindling commissions from airlines and the proliferation of Internet competition have forced travel agencies to ask themselves if they have outlived their usefulness.  Travel agencies are responding to the threat of dis-intermediation with solutions such as embracing IT or providing speciality services.

Airlines, hotels and cruise lines are looking to deal directly with their customers via ecommerce, while Internet start-ups are trying to capture a chunk of the travel budget.  For the scores of traditional travel agents who sell the vast majority of tickets, tours and packages, adapting today is essential to protect business tomorrow.

It is not only travel agents that are changing.  The industry as a whole is grappling with how to handle this new way of distributing its products.  Anyone familiar with the current reservation systems, ticketing procedures and fare formulas that are the tools of the travel business would say a change is welcome.  The first to feel the shift are the traditional middlemen

The travel agency business, reputed for its high degree of fragmentation, now has the opportunity to consolidate around e-commerce initiatives.  Alternatives range from alliances, franchising, or even independent networks.  But all options are seen as winning strategies, especially in the face of mounting pressures from both clients and suppliers.  Small and independent travel agencies cannot afford to pay alone the high costs of IT solutions development.  Joining a large group or being part of a travel agencies network in order to have access to the latest travel technologies appears to be an interesting solution.

Around the world, there are numerous travel agency consortia groups in operations, which put an emphasis on the use of IT.   Some are nationwide network of many hundred of, even thousand of travel agencies featuring agents dedicated to providing consumers with the finest in vacation packages, cruises, tours and all types of leisure travel services.  They use the group’s Web site to promote their brand and services.

The typical features that can be seen on their Web site are the followings (for example, consider the group “XYZ-Travel.com”):

  • Enjoy The Convenience Of The Web: Shop for all your travelling needs at home, from the office, on the road virtually anywhere.
  • Relish The Personal Attention Of A Qualified Agent: It all just starts on the Web. One-to-one service is important to XYZ-Travel.com. You’ll be contacted by a certified XYZ- Travel.com member agent, who will offer you personal attention, security and confidentiality.
  • Delight In Valued-Added Vacations: XYZ-Travel.com member agencies offer some of the best travel values “out there.” Pick a destination, and let your XYZTavel.com agent find the perfect vacation for you.
  • Finding AXYZ-Travel.com Agency: Simply input your address in our Agency Finder to locate the member agencies closest to your geographic location.

Having a strong brand is key for any travel groups to succeed online.  Branding competition is fierce among the large travel groups.  Forrester Research expects this online booking to grow six-fold over the next two years.

How are the existing players going to compete? The broad strategies are to e-enable existing brands, launch new online businesses and to capitalise on the control of product.  A e-business strategy for travel agencies alliances should include the two following elements:

Firstly, to make sure all their existing brands have an online sales capability.

Secondly, to launch a super-brand, one single distribution entity at which I could throw huge  chunks of marketing budget to create an online travel business which would achieve high consumer recognition.

There is a need to do this because if marketing effort is spent across too many brand entities, none would achieve recognition and they would all remain lacklustre businesses.

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