So this is what extinction looks like. When I came into this industry back in 1996, a financial advisor said that the industry’s days were numbered. When the commissions were cut—same deal. 911—yup. SARS—yup. Throw in a few wars, and an unending recession and surely we should have been extinct. Right?
Well, here we are in 2012 and while the industry is a bit bruised and battered, we are here and ready to tackle 2012. Of course the recession will be ongoing; but will 2012 bring us natural disasters, man-made ones, disease, or even another war? Perhaps, but if nothing else, we should be well prepared.
In addition to all the end of year planning I do, I have also done a great deal of crystal balling for 2012. If nothing else, the travel industry is rife with change and attempting to look into the future, I feel, helps you prepare you for the unexpected. So what pitfalls might come out of 2012? Here are my thoughts. Please let me know yours!
The Good Stuff
Less competition. Study after study shows that consumers are getting tired of the online travel agencies–certainly not enough to eschew them entirely; but enough to move a significant bit of market share back to the human side of the industry. I would not be surprised to see at least one of the big three agencies call it a day. But, that is not to say that the agency will not be around in a different form and much smaller.
Continued demand. People will travel. Even though times are tight, people will find a way to travel. It may not be as extravagant as it once was, but they will travel. Agencies have an opportunity here to fill that demand.
Better partnerships. Some suppliers will come to fully understand the value that agencies bring to the table. I think that 2012 will bring a bit more transparency to the industry with suppliers and agents sharing their unique and shared needs to work to true mutual success.
The Bad Stuff
Worse partnerships. And unfortunately, there will be some suppliers who will become worse partners for the agencies that represent them. You will see a more obvious push to direct to consumer sales, lower compensations, and less flexibility. To work with these suppliers, you will need to be on your “A Game” every day and hope that a favor is never needed.
Lower pricing. The worldwide recession has no obvious end in sight. It will ebb and flow for the foreseeable future and to remain in demand, suppliers will need to keep pricing down (and NCFs high) in order to meet their goals. While this makes for a challenging environment for an agency, there are opportunities here for ancillary revenue—insurance, sightseeing tours and shore excursions, service fees, destination guides, etc. Develop your additional value and bring it to the table.
And, if by chance the TSA does not stop the next terrorist attack on American soil—all bets are off!