I read with interest the JTG reassessment of its agency business.
Travel Counsellors now operates in seven countries and in each of these countries, to some degree, there is a realisation that times are changing and that the agency model must adapt.
Immediately the industry looks to a home based model as one of the solutions. The savings on rent, business taxes and other fixed costs are attractive. But without exception, the home based model is misunderstood for if it was only a question of cost-saving, the short term advantage would eventually disappear and our model would not have shown the resilience of expanding every year since its inception over 19 years ago.
The real answer is more fundamental, the customer has a choice between having the very cheapest price or the very best value. The internet with its constant paring of costs and margin will deliver the cheapest price and many customers are attracted to this new found ability to book their own travel. In 2000 33.8% of the population of Australia, mainly businesses, were internet users and last year this increased to 88.8% of the population. Now customers have a path to product that was once exclusive to agents.
However, many customers choose to seek the best value, 24 hour support, financial protection and more importantly, validation of choice in the suitability of their holiday for their specific requirements. Tripadvisor, Facebook and many other social media apps have tried to satisfy this growing need for validation and advice but are increasingly doubted because of bogus and less than impartial advice.
To compete in this new world of customer empowerment, those who choose to be either transactional or relational will not have enough to offer the customer. An agency which operates and bases their offer on discounting and price can never compete with the internet, and the internet will find it difficult to bring an impartial, caring relationship to a sale that has its roots in emotion.
The industry must choose either to be super-relational or super-transactional, anything in between has no future. It’s this dilemma of choice that is the challenge that the industry now faces. Good Agents need to charge for the value they offer, the care, reassurance and impartiality. The customer experience was once called service – it is now a trusted friendship. So agents must ditch the language of transaction, email, price and discount. Many will hanker to give all of this and still be the cheapest price, but that is not possible.
Society is changing and every industry must adapt. Not every person will want the value a travel agent offers but similarly, neither will many want the uncertainty of transaction. There is a rebirth of the true, trusting and knowledgeable agent. There is a future for the trusted agent as in every walk of life, customers seek to trust. The one thing that computers will never deliver is emotion and a holiday is an emotional buy.
Agents can be bricks and mortar or home-based but that is just irrelevant. The issue is, are they super-transactional or super-relational? That is the choice that the industry and the agent must make.