For Agents, New Year Brings Familiar Challenges
by Robin Amster /Profitability, attracting new talent, ever-changing technology and defining the true role of the travel agent – these are among major challenges facing the agency community in 2014, according to top agency executives.
The staying power of these seemingly perennial issues reflects their significance.
Boosting profitability
“How do you continue to grow the margins? Younger agents coming into the business are looking to make money at a time when margins are shrinking. If we can’t grow the margin on individual products, then how do we add margin? How do you sell the fries with the cheeseburger? You have to sell the extras; enhance the experience and grow the bottom line.” – Alex Sharpe, CEO, Signature Travel Network
Cheap and fast – or experiential
“The difference between the transactional travel agent and the travel advisor is that travel advisors are more price-elastic. They call and talk to the client, so that client is going to invest in that relationship with every trip. All of these pressures to commoditize are constant on any business. Every industry is experiencing bifurcation between optimized experiential or optimized commodity – and death is in the middle. Either be the cheapest and fastest or something on the other side experientially.” – Matthew Upchurch, CEO, Virtuoso
Willing to spend but . . .
“Price sensitivity is the challenge. People are willing to spend the money on things that are important to them, but they are still watching what they spend it on. An even bigger challenge is that they are looking for the amenities, the perks, the value-adds. That’s why they belong to so many different loyalty programs and clubs. Trying to take advantage of all those extras gives them more without having to buy it. People want to make sure they’re getting the best value. [Agents need to] know where to find it and know what it’s all about so that, when a client asks, they’re not sitting there saying, ‘I don’t know. I never heard of that.’” – John Werner, president and CEO, MAST Vacation Planners
Bringing in new talent
“Everyone is talking about attracting new talent into the market, and that’s still a challenge. We’re seeing that our agencies that focus on niche markets are having an easier time attracting new and young talent. That’s because they [the agencies] are focusing on markets geared to younger clientele like romance, active and millennial travel. That’s an easier sell and an exciting sell for them [young talent].” – Nicole Mazza, chief marketing officer, TRAVELSAVERS
Caribbean capacity
“We’re seeing a lot of [cruise] capacity in the Caribbean. When there’s a lot more capacity, there’s more need for agents to deliver customers. That will be a shared challenge because if the agency community doesn’t do a great job of selling that, then cruise lines will be hard-pressed to bring pricing up to where everyone wants it to be. One of the challenges for agents and suppliers is to fill the capacity sooner. The Caribbean tends to be attractive for the value seekers, and when there’s a lot of capacity and a lot of promotions, even though they’re attractive to consumers, it’s confusing to keep on top of everything. Agents have to babysit their bookings to make sure they are still competitive.” – Jackie Friedman, president, Nexion
Keeping up with technology
“The first challenge is continued adjustment to the changes of technology. I see that as a challenge but one that, if we work at it, is only going to improve our ability to serve customers. It’s our overall ability to stay communicative with our customers throughout the entire process of their vacations.” – Bill Sutherland, vice president, travel services, AAA
More and more regulation
“There seem to be more and more federal regulations coming into play. Agents are responsible for providing disclosures on everything from code shares to baggage fees, so they have a lot of responsibility to see that consumers have that information.” – Jackie Friedman, Nexion