Traditional distribution will still thrive

PEEK INTO THE FUTURE: In this section, Raini Hamdi asks industry leaders to pen their thoughts on what the future will bring. Here is Brett Tollman, CEO, The Travel Corporation on the future of traditional distribution

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Brett Tollman (second from right), his parents Bea and Stanley Tollman (centre), with Robin Yap (right) and team in the Singapore office.

We are often asked and challenged about The Travel Corporation’s long-standing, dedicated engagement and reliance on the traditional travel agency distribution model. We consistently repeat our belief, as follows:

Leisure travel has certainly evolved and changed significantly over the past 40 years, everywhere. However, when a customer is looking to buy a great holiday which has added value, is an enriching experience and matches their expectations, a very good travel agency is still the best way to ensure these objectives are met or even exceeded in many cases. This is as valid today as it was in the past. So many potential customers today are time poor despite their excellent multi-tasking skills, have overloaded work schedules, are connected almost 24/7 yet are still trying to lead a relatively good work-life balance. I can personally validate this and I use a great travel agency in Los Angeles for ALL of my personal and family travel plans.

The Travel Corporation today is relatively complex and diverse, operating 30 brands in over 60 countries, with 38 offices globally. In each of our ‘selling’ markets, we work closely to support and engage our travel trade partners. We have evolved our traditional, original ‘tour operating’ model to immersive, curated life-changing experiences, be they guided holidays on Trafalgar and Insight, luxury river cruises with Uniworld, or independent soft adventure travel with Adventure World, to name a few. All of our brands and products still need great travel agency professionals to promote, explain and book via our call centres around the world. In fact, we are now moving to a 24/7 ‘follow the sun’ policy to provide our agency partners with an ‘always open’ call centre solution, recognising that many of them work at home today, and early or late.

The future is very bright too: WTTC, UNWTO and Oxford Economics predict massive growth in travel over the next 10 years, especially out of and around Asia. So this is an industry that will enjoy continued success in the future. Technology will keep evolving, to both benefit and challenge our industry. Google Glass and other mobile device adoption creating new connected travellers to online predictive search, and dynamic packaging by the OTAs, will continue to challenge the traditional agency model.

Attracting, hiring, training and retaining a new generation of agency staff is critical – we as an industry still have to do more to ensure this happens. That for me is the biggest challenge we face together, something WTTC is working hard on with its global members through its Tourism for Tomorrow working group focusing on our industry’s future human resource scarcity issues.

Those who will succeed and endure in the future are those companies that get this, and are also able to master the opportunities of Big Data and other such tools to better understand, engage and communicate one-on-one with their customer database. One has to be agile, adapt and change as needed while still providing the same fundamentals of any successful business: giving great customer service, working hard and being a good employer.

I was impressed when I recently saw the Dynasty Travel Singapore’s tablet developed for its consultants to go to time-poor customers’ offices and homes, engage them and book their travel where they want to be. This highly competitive, dynamic, fast-changing landscape is everywhere – whether in Asia, North America, or Southern Africa, where we ourselves operate a growing retail agency business, Pen Travel. We have to keep sharing, learning from each other and helping each other to succeed, to ensure our businesses are sustainable.

Recent research in the US validates the importance and future of the traditional retail agency. The 2014 American Automobile Association (AAA) survey (below) confirms that while most people are comfortable with and reliant on their own online research, when it comes to booking their holiday, especially those other than a basic airline booking, car rental or standalone hotel booking, they place their highest confidence in a professional travel agency to book (59 per cent for AAA-branded travel agencies and non-AAA branded travel agencies combined). It is also exciting to see our next generation of travellers validating the importance of a professional travel agency for booking, after friends and family, with the older generation highly recommending an agency in many cases.

US adults place the most confidence in the accuracy of travel planning information from ‘family and friends’ (39%). Respondents who are 18-34 years of age place more confidence in the accuracy of travel planning information from ‘family and friends’ than respondents who are 65+ years of age (42% vs 32%).

The travel information services US adults have most confidence in after ‘family and friends’ are ‘providers of professional ratings such as AAA’ (33%) and ‘travel agency’ (26%).

Women are more likely than men to place confidence in the accuracy of ‘providers of professional ratings such as AAA’ (41% vs 25%), ‘travel agency’ (30% vs 22%) and ‘social media sites such as Facebook and Twitter’ (16% vs 9%).

Households with less than US$35,000 annual income place more confidence in the accuracy of ‘online travel agency such as Expedia, Priceline or Hotwire’ and ‘social media sites such as Facebook and Twitter’ than households with income of US$75,000 or more.

So our collective future remains bright and we remain very dedicated and focused on the traditional travel distribution model. We will continue to work hard to ensure as many travel agencies as possible are highly profitable. With a strong price integrity model, when agencies book our brands, they make great money in working closely with us.

Travel Planning
Sources
% of US Adults Most Confident (“Top Box”) n=1,006
Family and friends 39%
Providers of professional
ratings such as AAA
33%
Travel agency 26%
Online travel agency such as Expedia, Priceline or Hotwire 21%
Company websites for hotels, cruiselines or airlines 18%
Online consumer review sites
such as TripAdvisor
14%
Social media sites such as
Facebook and Twitter
12%

Source: American Automobile Association (AAA)

By Brett Tollman, CEO, The Travel Corporation

This article was first published in TTG Asia, August 8, 2014 issue, on page 10. To read more, please view our digital edition or click here to subscribe.

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