I believe that any business which faces competition will benefit by focusing on how it can differentiate itself away from competitors and that particularly applies to travel agents.
Every business has three big risks:
- Demand risk – do customers want what you are selling?
- Competition risk – are there plenty of customers but are they attracted to competitors (or close substitutes) rather than to your business?
- Capability risk – if you identify a promise or offer which is attractive to customers and which cannot be easily copied by competitors, can you deliver on it consistently?
In recent years travel agencies have become vulnerable to demand risk and competition risk because of a failure to communicate a customer proposition which gives the customer great value and which creates differentiation from those offered by other travel agents.
If you differentiate your travel agent, you give certain customers a strong positive reason to use your agency although the very act of making your business more attractive to some people is likely to make you less relevant to others.
The simple fact is that no one buys OK or average unless they are in a big hurry and don’t care too much about outcomes. That’s certainly not the case for personal holidays and while business trips may be planned in a hurry, the executives usually have the budget to care about quality and convenience.
The Strategic Threats To Travel Agencies
It’s worth thinking about threats to your travel agency business along two dimensions.
Some threats affect all travel agents, others affect your particular competitive situation.
Factors affecting the general desire to travel
- Terrorism – the reluctance to travel after the September 11th atrocities was understandable as aeroplanes were used as a terribly destructive weapon.
- Economic decline – less disposable income means an inevitable reduction in either the number of trips individuals will take, the length of the trip or indulgence budget for the trip.
- Health epidemics – swine flu and Asian flu were two of the latest scares which made travellers reluctant to get on planes.
Factors affecting the specific reason to travel with your agency
- General affects that are specific to your niche. A terrorist attack, civil unrest or health scare in your specialist niche will impact you severely although there is a PR issue since threats can be magnified in the popular media. Movements in exchange rates can also make your territory much less attractive. Greece outside the Euro would be a cheap destination for UK travellers but the weakness of sterling makes the entire Euro zone expensive.
- A new competitor who either does what you do but does it cheaper or one who offers a more attractive value proposition/offer to customers.
- Damage to the reputation of your own agency or an important travel operator partner.
The Internet & Its Impact On Travel Agents
The development of the Internet has made many travel agents who were selling standard tours from the big agencies irrelevant because they weren’t adding enough customer value.
There’s no need to go into an High Street agent, wait for attention and then sit down and go through the booking process when you’ve already made up your mind where you want to go and when.
Instead you can do it direct by going to the tour operator’s website, filling in your details and entering your credit card number to pay. It’s usually easy, simple and quick. I did it myself a few weeks ago when I booked a Thomson trip to Italy.
Even worse the Internet with sites like TripAdvisor and the low cost airlines has made it much easier to put your own trips together. It’s what we used to do before my health got messed up but at the moment an “easy holiday” is a big plus.
The success of the Internet has reinforced two forces which threaten independent travel agents:
- Suppliers believe they don’t need intermediary travel agents since they can market direct to the public
- The public believe they don’t need intermediary travel agencies because they have direct access to the travel operators, airlines and hotels and a plentiful supply of information.
While the Internet favours the consolidators and the big name tour operators, it also gives the opportunity for specialist travel agents to flourish since it makes them available outside of the local community.
The Big Opportunity For Travel Agents
It’s easy to get gloomy about the travel agency industry and the number of high street travel agent stores that have closed in recent years.
But there is still one big plus factor.
People love to go on holiday and as probably their biggest annual expenditure outside of eating and a place to live, it’s important that they get to make the right decisions on their holidays – where to go, when to go, how to get there, what to do when they are there…
The financial collapse of various elements in the travel industry chain of supply and other emergencies help to highlight the benefit of working with a travel agency. As a traveller, it’s not your problem to get you back because that responsibility lies with the travel agent.
I was due to fly out to Majorca in 2010 just after the Icelandic volcano erupted and closed down air travel across Northern Europe. Fortunately the ban was lifted a couple of days before we flew but we went out with some trepidation as there was talk of an even bigger eruption.
Online bookings has grown fast in recent years but it’s not necessarily a great experience for customers.
“Satisfaction with online bookings is decreasing as only 49% of online bookers feel it’s enjoyable to book a trip online, down from 53% last year. 24% of people feel it’s more convenient to research travel offline, versus 20% last year”. survey
The role of travel agents is changing. As a customer it used to feel that it was very much the big operators pushing package tours out at consumers but the opportunity for agencies now lie in advising and helping customers to get the best holidays they can by using their expert knowledge, contacts and information sources.
What Value Can A Travel Agent Create For Customers Who Can Book Online?
Before really getting into the issue of how to differentiate your travel agency, lets take a good hard look at the business from the customer’s perspective.
This is essential because it’s the customer who will make the choice of going to a travel agent, of putting the holiday together entirely on their own or by buying a package holiday directly from a tour operator.
First there is a huge amount of information online for holiday makers but the sheer volume carries its own costs for the consumer:
- It can take a lot of time – and for information addicts, there is always more that can be researched. Planning a holiday and getting the fine details can start to feel like hard work.
- It can be confusing – there can be a lot of contradictory information. You can see that if you read the TripAdvisor reviews of even well known and well established hotels.
- You don’t know who to believe. I love TripAdvisor as an information source and have found it fairly reliable but we know that independent reviews get rigged, just like they do on Amazon. The difference is that a book which is duplicitly marketed may waste £20 pounds and a few hours before it’s discarded, a bad choice of hotel can waste thousands and use up precious weeks of annual holiday entitlement. Booking a holiday is a big decision and you want to get it right.
Searching for a holiday online is frustrating. I haven’t yet found a flight website that gives me the flexibility I want to make it easy to find my options and that’s before trying to link it to my preferred accommodation.
Holiday bookings often suffer from the precise problem – just like an accountant who tells you that you made a profit of £97,276.17 last year when £97k or even, “just under £100k” are the numbers your mind can deal with.
When I’m booking a holiday I know approximately where I want to fly to – but often the region rather than a specific airport in the region – approximately where I want to fly from – think of expanding circles going out from my home in terms of travel time – where I want to stay or visit – but if it’s a tour, not necessarily in what order – and approximately when I want to go.
That’s a lot of vagueness and uncertainty which falls flat with Internet websites but works OK when I can brief a travel agent with something along the lines of “I want to tour the Garden Route in South Africa for two weeks-ish starting in the second of third week of September, flying from a Midlands airport, Manchester or Heathrow with a couple of nights at Boulders Beach and at least four nights game watching for a budget of about £2,500 per person and I don’t want to go back to Shamwari.”
That brief makes perfect sense to me and explains why I’ve used to same specialist travel agent for six trips to Southern Africa in the last ten years. Sometimes my briefings have been even vaguer along the lines of “I don’t mind when or where we go except we can’t travel the first week of the month but we want to have a great chance to see cheetah, bat eared foxes and plenty of elephants and it’s always nice to see more leopards.”
Back comes a proposal and I may quibble about the occasional suggestion but overall the holidays have been FABULOUS.
A good travel agent helps you out if you get into trouble.
Staying on the theme of my Southern Africa holidays, the first time we went, my back went into spasms and I could barely move and this was coming up to the game watching section – the big reason why we wanted to go to South Africa. With one phone call we were able to change our itinerary, stay at the one place longer until I was able to travel and then extend the next place which was near and ditch the more onerous travel including a flight to a wilderness safari.
Another time our flight from Heathrow was cancelled and we didn’t get to our first destination until 24 hours later than expected. While we couldn’t get our time back, the hassle of letting everyone know and keeping the hire car rental etc was done for us.
A third time, floods caused the Crocodile River to overflow and closed one of the entrances to Kruger and we were able to switch accommodation around so we didn’t have to waste hours travelling.
A good travel agent puts specialist knowledge to work for the benefit of clients.
A bad travel agent can mislead you by providing false information (to make sales) either deliberately or by accident or can add as little value to the holiday as the shop assistant who scans your purchases and takes the money.
Customers Get The Travel Agents They Deserve – Travel Agents Get The Customers They Deserve
I haven’t delved deep in Zen philosophies but I do believe that what goes around, comes around.
If you as the travel agent treat your customers as commodities – as fodder with the cash to give you some money then don’t be surprised if those same customers don’t appreciate the services you provide and treat you as just another travel agent.
In contrast a client who involves you deeply in the planning of their precious holiday and values your advice deserves the best you can give. Your expertise adds value to the client and they appreciate it.
How To Differentiate Your Travel Agency
I use the 7 big questions of business success to help create business differentiation and they apply to all kinds of companies.
These questions are who, what, where, when, how, why and how many.
Let’s take a look at how they apply to differentiating one travel agent from another although I won’t be able to go into the full complexities of the process.
Differentiating Your Travel Agent By Who
Who can apply to the travel agent owner, the staff of the agency or the type of customer you want to attract. It can also refer to any exclusive arrangements you might have with particular tour operators.
The first who to focus on is the who of your customer.
Are you appealing to a particular type of customer or a customer with a particular interest?
The rich and affluent are always a good market to target because they’ve got the money to spend. One parent families or families with disabled members will have special needs which make it much more difficult to get the right help, advice and support from normal travel agents.
Are you acknowledged as an expert or a campaigner in a particular field? People are attracted to celebrities – Neil Armstrong trips to the moon would resonate with me because I know he’s been there.
Are your staff specialists and passionate about what you sell? If you specialise in skiing and mountaineering holidays then if your staff are experienced mountaineers and skiers, they will quickly build rapport with your target customers, pass on tips and be very credible.
An important element of differentiating by who is based on building up trusted relationships so it’s important that there is consistency. A high staff turnover will destroy this trust factor or concentrate client attention on you, the owner.
Differentiating Your Travel Agency By What
Closely related to differentiation by who is differentiation by what in terms of specialist positioning.
You have four combinations:
- general who and general what – all types of holidays for anybody who has the money to buy
- general who and specialised what – mountain adventure holidays for all types of customers
- specialised who and general what – trips for the affluent all around the world
- specialised who and specialised what – holidays for patients on kidney dialysis – I found myself investigating these organisations in 2010 when I had acute kidney failure and was on dialysis three times each week. Fortunately, my kidneys have recovered enough to come off dialysis but it looked like I needed a very specialist travel agency service.
Some times it pays to have an incredibly tight niche, other times it pays to concentrate on the who or the what. Ideally you want to design your travel agency so that it a) has repeat clients and b) generates referrals to take the pressure off having to find new customers all the time.
In helping you differentiate your travel agency business, I’m speaking from the position of an expert in differentiation with an interest in travel agents. A competitor may be an expert in the travel agency marketing with an interest in differentiation.
A really specialist combination would be a differentiation expert who specialises in travel agents although that is often a contradiction since it can lead to industry recipe solutions.
The appeal of a specialist is very high so what can you specialise your agency on?
What also refers to what you do?
For examples do you sell package tours, put together customised itineraries or even act as a tour operator and create packages for clients?
Using Where To Differentiate Your Travel Agents
In my differentiation process, where usually relates to where you are, where the customers are, where you can find customers and whether customers come to you, or you go to customers or whether data can be communicated digitally.
With travel agents, where can also relate to where you customers want to travel to.
Location is a very obvious way to niche and in many ways belongs as another factor in the who and what combinations.
You can specialise in all type of holidays for all types of people going to one destination e.g. Australia
Or a very tight definition – safari holidays for disabled travellers in South Africa – if there are enough people looking for holidays in the niche.
Differentiating Your Travel Agency By How
How refers to the processes you use and what you require clients to do.
You could have a highly customisable website that spits out options or you could offer a very tailored solution.
Because people are focused on their own self interest, clients and customers don’t care about how you do something until you make it relevant and meaningful to them. Saying you use the XYZ booking system is irrelevant until you say that you’re the only travel agent authorised to use the XYZ in your area and it guarantees that your clients will pay the lowest price or we’ll give you back three times the difference.
Differentiation of Your Travel Agency By When
One of the big attractions in booking holidays by the Internet is that it is open 24/7 while a high street travel agent may only be open from 10:00 am to 5:00 pm which isn’t very convenient for the holiday makers who have to go to work.
When can apply to extended opening hours – from noon to 8:00 pm may be much more convenient for many employees.
When can also refer to the time between booking and the holiday. Your travel agents could specialise in late bookings for the urgent needs and for those who can’t plan ahead with any certainty.
Have A Strong Why To Differentiate Your Agency
Why do you own and manage a travel agency and why does it do what it does?
People are attracted to businesses with a strong purpose e.g. The Body Shop which had very different views on the way beauty products should be tested and sold.
This sense of mission or crusade can create excitement and passion that moves from you to your staff and then to your customers.
Your purpose can be to promote the good (the wonders of nature) or to stop the bad (tourism may save the tiger and the orangutan from extinction in the wild by bringing in much needed tourist money.)
Or you could link your business to a wider charitable cause e.g. holidays for orphaned children.
Differentiating By How Many
The purpose of differentiating is to shift focus away from the lowest price and towards better value for money.
That can often be interpreted as a better product or something unique but it can also be more quantity. The example I often give is the bottomless cup of coffee.
There is an economics issue with this “how many” concept which you need to be careful of. One positioning could be “the agency that gives you eight nights away on holiday for the price of seven.” If you carry the cost of the extra night’s accommodation, it will be expensive but what if you can talk your preferred hotels into supporting the promotion because their occupancy rates are low on the eight night. I realise the idea does work for the package tour operator which needs to work like clockwork – same things each week at the same time – but it could work for more personalised markets.
The 7 Big Questions Of Differentiating Your Travel Agency
I’ve given you a few ideas based on the 7 big questions – how, what, where, when, why, how, how many – and you can see that there are plenty of ways to differentiate your travel agent from your competitors.
Your Differentiation Can Be Shallow Or Deep
This is an important concept because some see differentiating and finding your USP (unique selling proposition) as a marketing issue.
I think it’s much more important than that. Unless you’re very lucky, your differentiation strategy needs to run through everything you do.
It’s the difference between having your agency differentiation shallow or deep. Shallow differentiation is based on a marketing promise that sounds good and different and creates buyer preference but…
and it’s a BIG but…
it’s not backed up by the underlying business. While clients may be attracted to the idea of a specialist travel agency, it doesn’t mean that they’ll stay happy if they don’t benefit from the expert knowledge you and your staff should have.
What Makes A Travel Agent Special To You?
It would be great if you could share your thoughts on what differentiates travel agents from each other.
Do you have a really close relationship with one travel agent like I do with my South Africa agency – thanks Ginny and all at Cedarberg. They are not perfect but they have found some amazing holidays for me that will live in my memory forever.