At least once a year, a survey of TAMS members drills down on issues such as service fees, health care and other industry and business matters. In our most recent survey, the response to one question was crystal clear:
How viable from a profit perspective do you believe the following business models will be in five years?
Of the seven choices offered, responses to three stand out.
BUSINESS MODEL Not at Somewhat Very
All Viable Viable Viable
Generalist without specializations 47.8% 50.7% 1.4%
Generalist with specializations 0% 50.7% 49.3%
Specialized or niche positioning 0% 4.3% 95.7%
Five years! Within that time period, according to nearly half of respondents, an agency that does not have a specialization will be “not at all viable” in terms of profitability. Only a tiny minority, slightly more than 1%, see the generalist business model as “very viable.”
Specialization is a huge boost
Look at the change in opinion about expected viability when generalist business model includes specializations. About 51% see this model as “somewhat viable” and 49% as “very viable.”
Profitability expectations rise even more dramatically when a business has a specialization or niche positioning as its core business strategy. Nearly 96% see this as “very viable.”
You need to change course
The key question is this: If you see an iceberg on the horizon are you making any investments in changing course? (The generalist business model would be the iceberg.)
Five years will be here before you know it, and the ability of your business model to shift directions on a dime is very questionable. Are you investing now in the future you already see?
There certainly are opportunities, and the Well-Being and Medical Travel Conference being held in my hometown of Scottsdale on June 20 and 21 may be one of the best.
Medical travel has big potential
No, I am not pandering to one of the sponsors, Travel Market Report. Let me tell you why I think you, or a key management employee, should think seriously about attending this conference.
• The great age wave of baby boomers is dramatically expanding the ranks of the retired and nearly retired every single day. While not the only market, baby boomers represent a huge potential market for both well-being and medical travel.
• One of the great business advantages of specialization and niche strategies is that they deal with types of travel that are relatively immune to mass market commoditization and the level of price competition this brings. What could require more personalization than well-being and medical travel? What could be more difficult to commoditize?
• There is mounting evidence that while the U.S. has the most expensive health care system in the world, it isn’t always the best. As a result, there is a growing trend of seeking affordable, quality medical care outside the U.S., and that means more lucrative international travel.
• Last but not least, the kind of travelers this niche attracts generally have the time and money to travel. While they may come to you initially for your expertise in well-being and medical travel, this gives you an opportunity to build a personal relationship as an entree to their other travel purchases.
Well-being and medical travel is certainly just one among a range of specializations and niches – your choices are limited only by your imagination – but it will be a good one for many of today’s travel agencies.
Your biggest risk is not changing
All of us, myself included, spend a majority of our time and energy coping with the challenges and opportunities currently confronting us.
But, if we truly believe that our business environment will look different five years down the road, none of us can afford to put off investing in a future where today’s business model will no longer be relevant.
I have been a consultant for many years, and one of the most important things I have learned is that remaining the same when change is all around does not avoid risk. Remaining the same is the biggest risk of all.
Dr. Robert W. Joselyn, CTC, is president and CEO of Joselyn, Tepper & Associates, Inc., a travel agency consulting firm, and of TAMS, LLC (Travel Agency Management Solutions), a travel agency financial analysis, benchmarking and networking organization with 120 members in North America.
Well-Being and Medical Travel Conference 2012. Co-sponsored by Travel Market Report and Well-Being Travel, the conference takes place June 20 to 21 at the Phoenician resort in Scottsdale, Ariz. http://www.well-beingtravelconference.com/
The program features in-depth education for agents about all aspects of selling to and servicing medical travelers, including how to tap the market.
Registration for agents is $199.