Steve Banks is chief commercial officer of UK-based travel management company Agiito
As we approach the summer season, travel and hospitality are in the news for all the wrong reasons. While we embrace the second half of the year with a sense of elation that the appetite for travel has not been dulled during the pandemic, it is tempered by challenges across the sector that are impacting travellers in terms of value for money, customer satisfaction and in having the confidence to travel more.
From a leisure perspective, the joys of restriction-free travel and a perceived frictionless experience have been replaced by challenges and anecdotes all too often repeated in the media – airport delays, flight cancellations and a shortage of staff – all compounding an environment where a desire to travel both at home and abroad continues to increase.
In the corporate travel arena, the drain of talent and a reluctance to enter – or re-enter – the market has been coupled with an accelerated return of business trips, resulting in a negative impact on the customer experience and turnaround times.
The perfect storm
After a couple of false starts in late 2021 and early 2022, TMCs worked hard to understand future demand from customers and from different sectors, factoring in different products and a renewed take-up of online booking tools. Ultimately, the scale and pace of return, certainly of the domestic market, probably accelerated two or three months earlier than expected as a result of pent-up demand and a desire to reconnect in person.
The pace of recovery inevitably had an impact on the sector, as did other challenges. As well as a widespread shortage of staff – in hotels, among taxi drivers and at airports – there have been post-Brexit-related challenges too, all of which have exacerbated the situation. The upshot has been an inconsistent user and traveller experience, as well as a far from ‘frictionless’ travel experience.
A new normal is beginning to form, but is it new and is it normal? Hotel rate caps need reviewing due to unprecedented demand in some areas. Airlines, routes, properties and venues that were once preferred partners may no longer be viable.
Challenges further down the supply chain around the availability of car hire, the reliability of taxi providers, or the response of airline contact centres, as well as the all-round shortage of resource in the sector, all combine to produce a slower turnaround and a less-than-perfect customer experience.
So, you may ask, what is the industry and agents doing about it? Well, the answer is that there is no silver bullet. While we all strive to increase headcount and efficiency, we’re keeping a close eye on a number of influencing factors present with us now and on the horizon.
In the coming weeks and months we’ll get a better idea of the impact on consumer confidence, of passenger numbers on the trains, of how airlines and airports accommodate an increase in demand during the summer months, and how the ever-looming shadow of new and emerging variants of Covid-19 may or may not impact the ability and willingness to travel in the future.
People power
As an industry we continue to recognise and value that our people are our biggest asset, so retention and wellbeing is number one on the agenda. Secondly, as we look to boost our numbers, it remains an employees’ market with wages rising at this time of accelerated inflation and rising costs.
From our TMC perspective, it comes down to simple maths. Incoming calls are up 30 per cent against usual demand, with the average call handling time having more than doubled, while more time is needed to contact suppliers and venues as appropriate. We have an excellent resource management team positioning and repositioning staff based on customer demand, known trends and anticipated types of calls, but it’s not an exact science.
Meanwhile, we are seeing a significant return to the utilisation of online booking tools, though some people are understandably a little ‘rusty’, leading to mistakes or the need to phone us more.
Changing habits
With indeterminable demand on our resource, even with the best projections, we really don’t know who will phone us, when and for how long. Maybe this is the time to review traditional commercial models, especially the transaction fee model the industry has found so prevalent?
We are seeing growing demand for ‘ring fenced’ resource through management fees, an increasing interest in subscription fees, and ‘fixed’ expenditure on agency fees, which ultimately can be very positive with a guaranteed income for TMCs irrespective of variable volumes allowing continued investment in people and customers solutions.
In addition to having a successful partnership with our customers, corporates are perhaps wary of changing agents at a time of varying volumes, a potential change in purchasing scope, and inconclusive travel trends. For us, the positive effect is that we are seeing an average increase in the contract term of renewals.
We’re all passionate about this sector and the role travel management companies play in supporting customers’ travel, meetings and events needs, but we must all recognise how the lack of talent across the sector is impacting the user experience.
Let’s hope for all our sakes that the work we are all doing across the sector has a positive impact over the coming months as we play our part in the travel industry’s increasing recovery. Above all, let’s be mindful of the various challenges we are all facing as individuals and as organisations in the current climate.