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Apr
16

“Change Or Die”

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Gravestone for a Travel Agency

This may seem to be an alarming headline, but for the independent travel agency, this is the message you absolutely need to understand.

The travel business has changed for ever! The internet is becoming ever more popular, and more and more travelers are being lured into the online booking environment.

Those travel agencies who are either not willing to or don’t know how to adapt the ways in which they do business will very soon find themselves being forced to close their doors forever.

We are here to offer you the tools, processes and knowledge that the independent travel agency requires in order to adapt to these imperative changes in business operations in order to survive this coming shake-up in the industry.

Categories : Problems
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Apr
12

Who Are We?

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John Kumm, Your Travel Marketer

Your Travel Marketer

Hi, My name is John Kumm, and I am Your Travel Marketer.

My wife Barbara and I have a combined 45 years of experience  in the travel industry, and are passionate about preventing the imminent collapse of many small independent travel agencies, where we personally believe the majority of expertise and experience in the industry currently reside.

In recent years, we have spent many thousands of hours (as well as dollars!) teaching and working with the latest developments in technology and marketing in order to provide the information that professionals in this industry need in order to turn around the impacts of  the current slump in turnover and profits.

Categories : Solutions
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Lady with computer booking her next tripThere has been a long held belief within the industry that within the Australian environment, online travel sales have remained significantly below that of other parts of the world, particularly the US of A.

Figures often quoted imply that in the US, online bookings account for some 50 to 60% of all travel bookings, whilst in Australia the corresponding figure is well under half of this.

Whilst a number of suppliers of booking services frequently do quote what seem like absurdly low rates of online accommodation bookings, one does wonder where these numbers originate.

Our personal experience with a small B&B in Tasmania was that some 80% of our bookings were achieved through online services. Whilst it would be reasonable to believe that the rates may be somewhat lower for the larger accommodation businesses and chains, nevertheless casual industry research implies a much higher rate than many of those quoted.

Evidence abounds that online accommodation sales rates are much, much higher. A recently released report on Australia’s accommodation booking trends has revealed that on average, some 40% of all accommodation bookings in Australia were sourced on the internet. This compares with figures well under 20% quoted in some media.

Whilst these figures are able to deliver an insight into the accommodation sector, it has been difficult to gather similarly accurate numbers for the general travel market.

It would be reasonable to assume a lower penetration rate, although it is quite likely that for travel activities of the type most often covered by travel agents, there is likely to be quite a significant variation.

Domestic flight bookings, for instance are likely to have a very high online penetration, particularly now that most of the carriers have introduced financial penalties for telephone bookings to the carriers themselves.

Online bookings for international flights are much more common with high capacity routes than with many of the less popular flights, perhaps since clients feel a little more comfortable about knowing what pricing and service options are likely to be available.

However, for round-the-world and ticketing involving multiple carriers, by far the majority of customers are still visiting their local travel agency.

To date, the travel agent is still the preferred source for bookings of cruises and package holidays. This is probably due to a much lower level of technology support and clarity of choice for such travel options.

However, it would be naive for travel agency owners and managers to believe that this state of affairs will remain indefinitely. Certainly, most consumers already visit the websites of those offering package holidays, even though they’ll still call in to the agency to finalise the booking.

We need to remain aware that many of the organisations running these websites are now beginning to put significant effort into improving the online “bookability” of their sites. Indeed, online sales figures for the US and Europe have already increased significantly.

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IATA Airline Preformance StudyA recent announcement released by IATA shows a much rosier future for many air carriers.

Although new forecasts indicate that the global industry will soar to a profit of nearly $US 9 billion in 2010 – compared to a loss of some $US 10 billion last year, projections for the UK market are less positive.

The report pointed out that the UK – Europe’s biggest air travel market – was lagging behind other parts of the world due to a weak economy, a number of significant strikes and the impact of increased passenger taxes.

Brian Pearce, the chief economist of IATA stated “The UK markets are pretty much the weakest in Europe . “We have not really seen much of a pick-up at all in passenger numbers, which is a reflection of the recession in Britain and perhaps higher travel costs because of air passenger duty.”

He indicated that, following the biggest fall in UK passenger numbers since records began, he did not expect the UK market to grow “much at all” this year.

The IATA report projected that two regions would provide most of the industry’s profits, forecasting a surplus of $3.5bn for North America and $5.2bn in the Asia-Pacific area.

The bounceback, in the US market in particular, has been driven by higher average fares – due to cuts in capacity that have spread demand across fewer seats.

However, the report warned to expect an impact next year as a backlog of aircraft orders drive down fares and profits. New equipment deliveries for 2011 will result in about a 6% increase in seats.

As a result, global profits are anticipated to fall next year to $US 5.3billion. Average fares across the industry are expected to be flat during this period.

Categories : industry trends
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Don't end up like him!

As you are aware, the travel industry is going through a major restructuring process right now.

While the growth in popularity of the internet is resulting in many more travelers booking both business trips and holiday excursions online, a number of operators with significantly greater resources than the average shop front agency have succeeded in offering a range of online travel booking services to their clients.

At the same time, many travel providers have decided to reduce their margins, and as a result, travel agencies need to increasingly book substantially more travel in order to receive the same level of commission income.

The Global Financial Crisis emerged over the recent months as yet another threat to the travel sector, as the disposable funds  available for holiday expenditure  by the average person suddenly plummeted.

Is it any wonder that many travel agencies around the world are finding the challenges of maintaining their turnover increasingly difficult.

Categories : Problems, Solutions
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