travel tech insights

Is anyone in the industry paying attention to the topic of travel agency cost control? It doesn’t seem like it. There are articles on travel trends, mobile apps, emerging destinations and changing markets – but not much on the subject of how to improve travel agency profitability. So perhaps this is the right time to share thoughts and hopefully start some conversations on effective ways to control costs.

If asked to name industries most affected by the Internet since the 1990’s, most people would think of online retailers like Amazon – draining sales away from small and large store-based retailers; or perhaps the music industry – careening from vinyl to CD’s, CD’s to mp3s and ultimately to Spotify.  Both are good answers. Another answer might be storefront travel agencies; certainly the widespread acceptance of online travel agencies (OTA) transformed the agency business model.  However, the ultimate fate of the traditional agency remains an open question. Ironically, technology – which crippled the travel agency twenty years ago – may be the very thing that saves them in the 21^st century.   

Some travel trends are difficult to discern; millennial behavior, for example. What is that generation really thinking? We know what they reveal in surveys, but the information can be contradictory or speculative and getting hard data on behaviors can be challenging.

It’s tempting to look back on 2015 for clues of what lies ahead for the travel industry in 2016, and there is some value in that approach.  Certainly technology will continue to impact how people purchase and experience travel; distribution channels will continue to evolve and the industry as a whole will continue to grow. But there’s a limit to what clues from the prior year can tell us and also a point at which trying to read tea leaves  from the past amounts to a distraction more than anything else.

There are very few people who haven’t heard the refrain, “I know half my marketing expenditure is a waste of money, I just don’t know which half.” One reason for this saying’s longevity is that it contains a kernel of truth; every travel company would love to know exactly what turns a visitor into a customer – so it could only spend money on what makes that happen.