Tough time for Travel Businesses - Steps you need to take
The outbreak of COVID19 has made a huge impact on the world economy, and due to the lockdown on various areas of several countries, it has become one of the toughest times for all travel businesses. From Hotels to Airlines to Cruise operators, to travel agencies to tour operators, every business is disrupted. No need to say why? you know the public health concern and the advisory issues are encouraging people not to travel. That is the need for the current situation.
To give you a rough idea, the IATA body estimates the total loss to the industry in a range of about USD100 bn. Travel Industry, which employs 1 in every 10 people when it comes to jobs, generates USD 5tn+ in revenues.
Why are travel agents at the front end of Potential Risk?
Looking at the current situation, the industry has been at risk due to the imposed travel restrictions; that resulted in the cancellations of travel plans in both business and leisure travel segments. The fundamental thing to consider here is that it is just the beginning; there is uncertainty looming in the future and we don’t know when it is going to end.
As a major impact of Novel CORONAVirus (COVID19), Travel agencies are flooded with requests for cancellations, refunds, and rescheduling in case of no refunds. Unfortunately with many of the travel itineraries being nonrefundable in nature and cash flow issues at the supplier's end, the middle man is facing most of the heat, especially where the bookings were done by the Travel Agents on credit.
Both International and Domestic travel restrictions might result in some of the players shutting shop or temporary suspension of the operations. It would be a huge challenge for the medium level player to continue paying salaries on time to the team, especially when no future business is happening.
“We do not know how long this situation will persist and cannot foresee when things will improve,” One of the customers I spoke to, who had plans to invest in the technology big time. However, one of the interesting things which we observed during discussions is that any of the investments done in the past of the digital transformation or process automation are paying off now because it helped them operate with full efficiency during the cover outbreak and during the lockdown.
Steps businesses need to take During Covid19
Based on the discussions with a few customers, we have created a checklist for our travel community to survive and excel during the tough time of COVID19.
Plan Digital Transformation- It’s time to be visionary, and plan for the future, see how you can innovate and improve Sitting up Process, Process Automation, control on the workflow, Online bookings, CRM tools, etc.
Though this is a global impact, it might look easier to accept that everything came to stand still but assume a situation if it had been a problem only with your native location (i.e. your customers and international locations open to travel/commute, etc), would you in a position to survive and manage your business. If not, what setup would have been necessary?
Just to recall, during the biggest crisis of 2008 (Lehman brothers crisis), the world's best startups(Uber, Airbnb, Slack, Pinterest, WhatsApp) have been started. Think about what change you can bring!!
2. Bring Back your customers. Over the past few months/years, if you had situations where you lost customers to OTA/other players, this is a golden time to win them back. Especially if they are stranded and helpless. Advise Customers that you are here to support them in this tough time when OTA and Airlines have their handful and are not in a position to help them, offer them a no-obligation helping hand.
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