By Wren Ludlow
Change is hard. It requires a borderline obsessive effort to spark, strategise, and implement business changes when the status quo feels comfortable. Take travel agencies as an example. While margins remain thin and competition fierce, the travel business has proven adaptive, resilient, and abounding with opportunity for those willing to seize it. In 2016, for instance, international air travel was up nearly 7 percent and airline profits were more than $35 billion.
Business Lifecycles Shorten
With business and leisure travellers thirsting for great travel experiences, why would successful agencies do anything except enjoy the ride? History provides some dire warnings about the dangers of complacency.
Since 2000, over half of all Fortune 500 companies – hardly a collection of slackers – have either gone bankrupt, been acquired or ceased to exist.
That boom-bust cycle among even high achieving, sophisticated, and generally innovative companies is accelerating. Half a century ago the life expectancy of a Fortune 500 company was 75 years. Today, it’s less than 15 years, and declining.
Balancing external threats and available opportunities is an important principle to adopt. But more than anything, what separates agencies that are able to seize growth possibilities and those that will struggle to keep pace is the commitment to continuously adapt, evolve, and improve. In earlier blogs, we have discussed how revenue optimization meshes with that quest for continuous improvement. Grasping revenue opportunities requires agencies of all sizes and sophistication to constantly revisit how they make money and what strategies and changes are required to earn the most with each and every booking.
Data Drives Insight
In a new Sabre white paper, “The Optimization Method: How Travel Agencies Can Improve Their Revenue,” we provide a blueprint for agencies to drive insights and improvements that optimize their revenue. The paper underscores the need for agencies to commit to continuous business transformation, which means embracing the reality that change can sometimes require new investments in people and technology and will inevitably involve bouts of frustration. The paper is designed to be straightforward and practical, and provides tips across main revenue areas: service fees, commissions, and mark-ups. By following these principles and enacting changes, agencies will be best positioned to realise incremental value.
Most agencies are actively considering how to harness data to change internal processes and strategies to reap more revenue. This paper provides a guide to help agencies – no matter where they are on the revenue optimization maturity curve – take concrete steps to improve. Success is not dependent on the number of employees an agency has or its ability to capture and analyse customer and marketplace data. What matters most is the commitment to change and evolve to always be in a position to seize revenue opportunities.
Click here to read the white paper.