Traditionally, travel agencies have applied sheer effort with some planning to make a profit at the end of the year. But, this is not ideal. In today’s world, embracing strategies and tools that will help maximize revenue at its various sources is a more straightforward path to success.
This is the new reality of the ultracompetitive travel industry — strategic planning and thinking must be paired with the smart use of technology for lasting success. After all, with margins already squeezed tight, and earnings from commissions and fees diminishing, agencies that don’t have a strategy to improve revenue risk going the way of history.
Define your strategy
To be clear, devising and executing an effective revenue strategy is not simple — you can’t just purchase it out of a box — and it often requires your agency change how employees think and act, from the C-suite all the way to the consultant. But the upside in increased revenue, competitiveness, and future opportunities makes it well worth the effort.
Indeed, the right strategy paired with the right technology can lead to revenue increases of millions of dollars annually, if not more. At a greater scale, large international agencies can see increases in the tens of millions. A continuous cycle of revenue optimization amplifies that monetary increase – and already has for some early adopters.
Measure your performance
The good news is that a revenue strategy can start in small, manageable steps. The best way to launch any new effort to boost revenue is first understanding your current performance. What are you selling today? How near are you to your revenue goals?
With that baseline understanding as a starting point — along with a commitment to monitoring ongoing performance — it is possible to identify straightforward steps to capture additional revenue in a way that supports the traveler’s experience. Examples of this are tracking the performance of commission overrides, identifying your top converting fare content, and assessing the effectiveness of your service fees.
Don’t leave money on the table
The most immediate way to boost your revenue is by making sure that your agency isn’t leaving relatively easy to capture money on the table with existing customers. From there you can expand and begin capturing revenue that isn’t available to your agency today. In our next blog, we’ll show you what a revenue strategy aided by some powerful data collection and analysis tools looks like.
Sabre offers a suite of tools to inform your revenue strategy, and, more importantly, our tools empower agencies to optimize and iteratively improve their revenue and performance. This blog is the first in a series detailing the fundamentals of revenue optimization and why it is crucial for your business and its growth.