Personalisation for good measure

Growing demand for personalisation in travel has put DMCs and travel operators’ expertise into sharper focus, but at the same time the tailor-made wave has opened up new concerns for players and even put traditional industry relations under question.

Gone are the days where travel agents are needed to plan and book simple beach vacations or run-of-the-mill packages, a trend that DMCs and tour operators are only too keenly aware of.

But the earlier prediction of travel agents going obsolete with the rise of the Internet and OTAs did not entirely come true. While some agents died out, quite a few remain in business and offer a stronger value proposition than before.

The growing demand for immersive, authentic experiences tailor-made to individual liking and preferences actually bodes well for travel expert, driving many tour operators to carve our clearer positionings and niche segments for themselves, anything from VIP services and expert-led itineraries to bona fide, once-in-a-lifetime voyages of discovery.

David Kevan of UK-based Chic Locations believes that “there is still good scope for tour operators but (they) cannot be all things to everybody”.

“For Chic Locations, independent experience-led touring holidays is the way to go, combining at least three different places and maybe using three different airlines – things that clients have neither the confidence or expertise to arrange themselves,” said Kevan.

The ability to curate and “find gems that (clients) can’t find on the Internet” is precisely how Asie Voyages’ Philippe Roussel sees his strengths as a French tour operator specialising in the Far East.

Particularly in South-east Asia, it’s “not easy to find gems” without guidance from a travel expert, he is quick to point out.

That is where the local destination knowledge and expertise of DMCs come in, said Stephan Roemer, CEO of Diethelm Travel Group.

“We cannot sell (standardised tours) anymore,” he said. “But what I can sell is a simple noodle shop, where locals sit on stools for lunch. It’s an authentic experience and (our clients) love it. It’s our job to find the best noodle shop (in a destination)… and that’s how we make a difference and create added value.”

Personalisation: harder work, but greater profitability
Travel players speak of the greater dividends found in customising tours, an area where many companies have devoted attention and efforts to.

Even though classic tours still make up business “volume” for Go Vacation Thailand, the demand for classic group series and SIT tours have declined over the years, shared business development director Tobias Fischer.

Growing demand for personalised travel has put a spotlight on the expertise of travel agents

In place, Fischer sees a clear pivot towards private group tours as traveller can better dictate what they want in their itineraries and elements adjusted to their liking.

Along with “bigger profit margins” that tour customisation has brought is “more work”, admitted Fischer, who added that Go Vacation has a tailor-made department to cater to such requests.

“But that’s precisely where the future of DMCs and travel agents lie. It’s the future of what the market wants, especially for repeaters,” he emphasised.

Likewise, Nicola Scaramuzzino, country manager of Panorama Destination (Thailand) noted that the tailor-made market, which is characterised by organic growth, has yet to deliver volume for the company. In the mean time, he asserted DMCs still need both segments to stay viable, with group series generating quicker cashflow while tailor-made tours offer bigger opportunities in profitability.

Complexity in ‘fitting puzzles’
The growing demand for customised travel has opened up several concerns for travel experts, including greater time, effort and knowledge needed to draw up a value proposition for their clients.

Creating a customised programme requires strong industry knowledge as well as interpersonal skills, pointed out Scaramuzzino, as travel designers “need to know the psychology of customers and ask a lot of questions in order to provide correct products”. “It’s like putting pieces of a puzzle together,” he opined.

At the same time, the growing tailor-made wave has opened up a more “interesting” career path for reservations staff, noted Scaramuzzino. As reservations staff acquire industry knowledge and hone their skills by “learning tricks to create the right package for the right people”, they can eventually rise up to become travel designers.

“You cannot be a chef without learning to chop onions,” he added, drawing the analogy to a professional kitchen.

Travel experts also spoke of constraints in delivering quotations for a customised itinerary within a short turnaround time, the result of consumers having constant access to information and their mobile devices in a hyperconnected world.

Said Scaramuzzino: “(In an age) when booking flights take longer than five seconds, replying (to clients) within 24 hours is considered a long time.”

The ever-shortening response time expected of travel agents is something Roussel is all too familiar with. “But a la carte tours don’t happen with clicks, it would take more time (for us) to get back (to requests),” he stressed. “(Furthermore), it takes about 10-15 requests to translate into one booking.”

That said, travel experts told TTG Asia said that totally fresh demands that require conceptualisation from scratch are far and in between, with most customised requests falling in an area where existing itineraries can be used and adjusted to customers’ preferences.

Scaramuzzino shared: “Anyone requesting for something entirely new are very few. You can classify customers into a few broad profiles – nature, beach and culinary – and from there send them sample standard programmes (according to their profile types) to gauge interest.

“There’s usually a 50-50 chance of acceptance,” he said.

Wither the DMC-tour operator relationship?
As more tourism players get into the personalisation game, the supplier-DMC-tour operator-retail agent-travel customer chain also comes under greater scrutiny.

Kevan argues that the need for a DMC is now lesser in a mainstream destination like Thailand, which has a high repeat visit factor and where clients’ itineraries  are generally less complex – characterised by longer average length of stay, fewer stops and local sightseeing booked on the spur of the moment – than ‘newer’ destinations the likes of Vietnam and Sri Lanka.

“If you are established in (a destination), you probably have a direct rapport with your main hotel partners, so from a financial and operational view you have more control of the booking, which in turn leads to a better (and more seamless) experience for the clients,” said Kevan.

He added: “Most DMCs work to set office hours and (outside of that are) contactable via an emergency number, but that would not include booking tours. By contrast, the hotel concierge is available at least 18 hours a day and can arrange something totally personalised within 30 minutes.”

But hotels’ encroachment into offering personalised travel services could pose existential concerns to tour operators too, Kevan acknowledged, while stressing that competition is not new in the travel sector.

“The days of tour operators working in tight collaboration with airlines and hotels are gone; in many ways we are competing against each other,” he remarked.

While tour operators worth their salt would have built up personal relations with hotels and have some kind of data protection agreements in place to limit the scope that hotels can approach clients directly” the reality is that many of the hotels want direct bookings, he opined.

Ultimately, the best form of insurance for business survival will be “added value”, stressed Roemer.

“Any link in the value chain has to provide visible additional value, and that goes from the travel agent to the DMC and the provider. The client can nowadays book his hotel and transportation directly without travel agent. The added value however makes the difference and has to prove its value for money.”

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