Travel agents are still relevant despite online competition
In today's online information age, the brick-and-mortar travel agent still remains relevant, says a leading industry expert.
However, in order to capitalise on the regional travel growth, they will need to find ways to create extra value for the customer, especially when traveller markets start to mature.
Industry expert Don Birch, president and chief executive officer of Abacus International, says the explosion of travel-related information on the Internet has not diminished the relevancy of travel agents.
"Travellers today still adopt the BoBo - browse online, book offline approach. They do broad-scoped research on the internet, but only as a reference base, very much less as a transaction base. After that, they still go to an expert and ask: "So how do you do this?"
"No website has hacked it yet. Various sites are trying to amalgate data, but the ones I have seen just make it worse. Instead of discriminating data, they just throw everything at you. This doesn't help," Mr Birch, the head of one of Asia Pacific's leading travel facilitators, tells AsiaOne.
However he cautions that travel agencies must not be complacent and should continue to find inventive ways to create value for the traveller.
"Traditionally, travel agents create value because of the complexity of the task. Twenty years ago, for example, ordering a ticket, communicating with the airline or the hotel, dealing with foreign currency and payment system resulted in a lot of overheads.
"As a result, the travel company did quite well. But as all those processes got easier and easier, where's the value? And that's why in places like Singapore, there's no commission and customers only pay agents for the services rendered." he says.
As an example of creating value, he cites the case of a travel agent in Mumbai, India, who records down the contact numbers of his customers' family members, and sends them mobile phone messages to provide updates of the traveller's status - when they have arrived at key destinations or when there are delays.
"This travel agent has created value through a keen understanding of his customer market. As most know, the Indian travellers are fairly new in the market, and are concerned about safety," he says.
"By providing such a service, which is not very complex technologically, he gives assurance to both traveller and family, by establishing a communication link between the two."
Mr Birch comments that such inventive ways of creating value is what will be increasingly sought after by customers when they decide on which travel agent to use.
Creating value will also become increasingly pertinent as travel markets grow and mature, something Mr Birch sees evolving right before our eyes in the Asian context.
Based on his company's research, Asia's robust growth has a predictive "tailwind" effect on the region's travel industry.
"Depending on the respective economy, a country's outbound travel will increase at a rate of one to two times the economic growth. Like in Vietnam, whose economic growth is around eight to nine per cent, and has a 30 per cent increase in outgoing travellers", says Mr Birch
"People in Asia travel as soon as they have some extra money in their pocket, and the last two to three years have dramatically increased the amount of disposable income for many people," he adds.
However, as traveller markets mature, they will progressively move from a "destination checklist" style of travel to one which demands more fulfilling and meaningful experiences.
He says one area which travel agents should focus is the SMERFs - a new diverse breed of travellers which traverses the social, military, education, religious and fraternity reasons for travel.
"This seemingly diverse group is united by a willingness to travel despite the economic cycle, to go off-peak and even off the beaten track if that's what it takes," he says.
He breaks down the SMERF market into the:
Social - People who travel for dedicated pursuits, which spans sports, cultural activities and other special interests. Some examples would be football fan societies, or car clubs, who often travel as an organised entity to pursue their interests.
Military - According to an online report by Asia Travel Tips, Asia has some 32 million soldiers, a large proportion of which are frequent travellers around the region for training and R&R (rest and recreation). Key destinations in this market are Taiwan, Thailand and Singapore.
Education - This ranges from short-term exposure programmes to long-term studies, but there is a high growth potential as parents and schools continually desire a more comprehensive educational experience.
Mr Birch emphasises on the peculiarities of this market, and says, "Operators need to be aware of the challenges inherent - Parent's expectations, differences in cultural understanding, and catering for homesick students are just some of the issues."
Religious - Countries like China, India, Sri Lanka, Taiwan and the Philippines are steeped in rich cultural heritage of the major religions, and tour groups are gradually capitalising on organised tours in addition to the religious pilgrimages to these areas. For Christians, there are also the mission trips for purposes of evangelism and medical aid.
Fratenity - Though not as substantial as the other reasons, a growing number of civil associations and groups, like the Rotary International and the Lions Club International are looking towards Asia as possible destinations for their international gatherings. The former held its international convention in Singapore in 1999, and in Japan in 2004, and the latter its annual meeting in Hong Kong in 2005.
The SMERF market, which is well established in the West, is just sprouting its roots in Asia, but as travellers start to 'mature', it will become increasingly relevant as to how travel agents must adapt and evolve their services.
"A rough figure shows the current annual value of this market to be already worth at US$1.7 billion in Hong Kong, Thailand and Singapore alone."
Mr Don Birch will further explore the topic "Tourism and Travel - Making the Most of Asia's Economic Tailwind" during the "Gearing Up for Evolutions & Leadership Challenges in the Travel, Tourism and Hospitality Management (TTHM) Industry in Asia" conference held on March 5, 2007 at the Fullerton Hotel Ballroom, Singapore.
Organised by the MDIS' School of Tourism, the conference aims to bring together prominent players from the TTHM industry and other key stakeholders. It will provide an opportunity for gathering information/data, analysing and learning from industry heavyweights on their business issues based on real-business life case studies and overcoming them.
Keynote speeches from industry leaders like Dr Robin Yap, Chairman, Activities Pacific Asia Travel Association (PATA) - Singapore Chapter, Mr Frederic Meyer, Director of South East Asia & India, French Tourist Office and Dr. Goh Jin Hian, CEO, Gleneagles Hospital.
