October 22, 2015

Top Challenges Facing Travel Agencies

by Malek Murison

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Travel agents are facing increasing challenges to keep their businesses alive
Travel agents are facing increasing challenges to keep their businesses alive

These are hard times for small-sized travel agencies. They are also pretty tough for those just beginning with a view to getting started in the travel industry. The traditional reasons you would approach an agency are growing less meaningful every year. Why go to your local agency to ask questions about some faraway destination when Google can answer those for you? Why rely on a third party agency when you can, through the internet, find the accommodation or service that you’re looking for and book directly? Any why remain loyal to a particular agent when there are thousands at your fingertips?

These are just a few of reasons why today’s travel agencies need to evolve to stay relevant. Travellers are getting smarter, so you need to be too.

Here are just a few of the challenges faced by modern day travel agencies…

  • More Choice Than Ever

Potential travellers are certainly not short of options when it comes to researching and arranging their trips. With more deals, agencies and service offerings than you could ever fully consider, shopping for travel services has become about cutting through the noise rather than discovering something authentic.

  • Increasing Price Transparency

Travellers aren’t naïve when it comes to pricing their trip. They’re sensible enough to shop around and find the best deal, and they certainly won’t be fooled into paying over the odds when they know how many potential options there are. This has made an already competitive market even more competitive, meaning that current agencies need to stand out in less obvious ways than just undercutting their rivals.

  • Greater Traveller Independence

In certain parts of the world travellers are keen to get out and explore with a little independence. They are savvy enough to know what they want and how to get it, and no longer need to have everything arranged for them. Whilst this attitude can be leveraged to say, offer self-drive tours, the general reliance on travel services providers has lessened.

  • Decreasing Customer Loyalty

With more holiday bargains on the internet than you can imagine, along with a host of small agencies and big hitters vying the attention of potential travellers, loyalty is a rare thing in today’s market. If you’re not offering something original, authentic and worth returning to, customers will have no problem taking their business elsewhere.

  • The Rise of the Sharing Economy

The rise of the Sharing Economy has left many travel agencies in the lurch, wondering how they can tap into a trend that deliberately leaves them out of the equation. Huge competition in the travel industry has been the catalyst for many bold claims, and it may well be that travellers appreciate the authenticity of peer to peer services more.

  • A Few Players Dominate the Market

A handful of companies which don’t need to be named here (they get enough publicity as it is!) have a stranglehold on the industry. They pull in more online traffic than anyone else, sucking the life out of smaller competitors and agencies only just getting started.

  • Travel Isn’t as Mysterious as it Used to Be

Gone are the days when you would head down to your local travel agent to ask questions about an exotic land far away. We get our information from elsewhere now. Travel services companies need to adapt and offer something more insightful than the generic information which can be found all over the internet.

So there you have it - just a few of the challenges facing the industry at the moment. But if you’re keen on starting up in the world of travel services, don’t fear! Many of these challenges can be turned on their head and into opportunities.

For starters, the industry continues to grow, and that means an ever growing customer base for you to plug into. Second, whilst it’s certainly true that people know what they want more than ever, this has opened the door to many travel agencies becoming more specialised, offering tailored trips to customers keen on a something precisely to their tastes.

Technical Challenges

The way that tourists discover, book and organise trips is changing. In an increasingly digital world, travel agencies have to adapt to offer a seamless online experience. Fail to do that and you'll be quickly overlooked and left behind.

This means having the ability to modify product availability in real-time, to adjust your inventory with the touch of a button, and to edit pricing information to cater to market fluctuations, offers and promotions.

It also means having a database and platform that can give curious tourists what they want: comprehensive and curated search results. This is a vital step in retaining customers and keeping people on your platform.

Then there's the booking stage. If that isn't seamless, or if at any stage your platform is unconvincing, clumsy or confusing, alternatives are just a click away. You will lose business. Central to success is having an optimized booking management system.

All of these technical challenges are far removed from the traditional tourism industry. Efficiency, skill and software expertise are suddenly priorities for travel startups.

The Role of Travel Agencies is Changing

Traditionally, an agent would be a one-stop shop for tourist information and bookings. Everything would be sorted between the two parties. Now, agents still provide the information, but travellers are free to take that knowledge elsewhere. That relationship has shifted, but it doesn't mean that travel agents are obsolete.

The world is changing and the political landscape is uneasy at best. If you read Skift, you will have come across the term Permanxiety. What better setting for travel agents to flourish? The key to is adapt, join forces with others and play to your strengths. That's what we help our partners do. Read more in the links below...

Travelshift: How Our Unique Solution Helps You Face These Challenges

Keen to find out more about how Travelshift's marketplace software can help your travel business?

You can also check out the following articles for more information:

We've also put together a range of features looking at how to build and grow a successful travel marketplace - which is something we know more than a little about: