Agents see increased productivity as key path to absorbing recession shocks With the region’s travel agencies already feeling the pinch of a steep downturn in travel, many are now turning to a new frontier, productivity, in the battle to remain competitive. With so many factors in the external market outside their control, the agents are naturally turning to those factors that are more within their power to influence said Robert Bailey, President and CEO of Abacus International – the region’s largest travel…
Agents see increased productivity as key path to absorbing recession shocks With the region’s travel agencies already feeling the pinch of a steep downturn in travel, many are now turning to a new frontier, productivity, in the battle to remain competitive. With so many factors in the external market outside their control, the agents are naturally turning to those factors that are more within their power to influence said Robert Bailey, President and CEO of Abacus International – the region’s largest travel distributor, which manages over 50 million airline bookings annually.
“Historically, the travel industry has been saddled with an image of being labour-intensive with relatively low productivity when compared on a like-for-like basis with other industries. This is now beginning to change as the pressure comes on and travel agents reach for the arsenal of new tools the industry has developed to improve productivity,” Mr Bailey said.
Mr Bailey said the company’s most recent survey of more than 40 leading travel agents in the North Asia markets of China, Hong Kong, Korea and Taiwan showed almost 40% of these companies identifying ‘Business Process Automation’ as the single best way for global travel distributors such as Abacus to help their businesses ride out the current financial crisis. Business process automation is the industry’s jargon for the use of IT to automate many of the routine activities of the travel agency such as managing bookings, compiling reports, settling accounts and even routine marketing in order to improve the average productivity per employee.
“As well as reducing ongoing operating costs, the new generation of productivity tools enable the travel agency staff to focus on what’s really important – connecting person-to-person with the customer,” Mr Bailey said. This takes on added significance as the travel industry moves towards a reduced commission environment. Service fees and ancillary services will take-over as the main source of revenue, so travel agencies must deliver a consistent level of personalised and expert service to ensure they remain competitive.
“Going forward, those wanting to retain and win customers will have to work much harder on all aspects of client servicing to justify the fees they charge which is where the use of productivity tools to free up resources becomes important,” Mr Bailey said.
Travel agencies are not the only groups to benefit from the new generation of travel productivity tools as the end-user; particularly the corporate traveller increasingly has the tools for a more seamless and less stressful trip.
“The issue of productivity on the road is especially relevant today, when a global lifestyle means work is increasingly done on the plane, at an off-site conference location or in many other locations around the world. It becomes imperative to provide these highly mobile workers with the information to make their travel as seamless and stress-free as possible,” Mr Bailey said. Travel suppliers are increasingly attuned to traveller’s use of mobile devices. A few are starting to offer time-saving features such as flight check-in, virtual room keys using traveller’s mobile devices. Since September last year, KLM Royal Dutch Airlines’ passengers have been able to receive their boarding passes on their mobile phones. The carrier said this hassle-free service was introduced in recognition of customer’s scarce time and desire to be in control of how this time is used. Other carriers have announced similar trials.
Abacus believes that as mobile devices get more sophisticated and an increasing number of applications become available for smaller screens on these devices, airlines would expect passengers to want to use their smartphone or other similar gadgets for more services. These include re-booking an air ticket after a missed connection, making seat selections, checking standby status or seeking upgrades. The end result will be less unproductive time spent in long queues at airport counters which is the raison d’etre of Abacus’ own solution Abacus VirtuallyThere providing mobile itineraries and travel updates to the corporate traveller.
The pervasiveness of these devices as productivity tools is starting to extend into many aspects of travel. GPS devices in vehicles help to minimise travel time and help travellers reach their destinations quickly in unfamiliar cities. More sophisticated versions offer time-saving functions such as highlighting traffic jams and advising on alternative routes.
While investing in technology for employees to work on the go or facilitate interaction among staff in different locations can boost productivity, there are several issues to be considered. As travellers increasingly turn to their mobile devices for everything from booking flights to paying for their hotel charges, companies may have to consider integrating such usage into their corporate travel programmes. These devices are expected to impact how corporate travel is booked, managed and paid for. This may spell the need for a company’s IT, HR and travel departments to cooperate and articulate guidelines as well as set compliance standards.
Travel businesses
Reducing staff as a cost control measure is often the last resort business owners in the travel industry turn to when coping with the challenges of today. However, when left with a smaller workforce, productivity becomes a crucial factor if fewer pairs of hands are tasked to handle more work than they normally would have to. It is easy for staff morale to take a hit and business efficiency to be compromised if they are to
cope in such situations without the right tools.
“It is crucial to have the right technology and business processes in place so that clients do not notice or experience a lower level of service or slower response time as fewer staff cope with a higher volume of work,” said Abacus Vice President of Marketing, Mr Brett Henry. “Automating certain work functions and putting in place the right and reasonably-priced IT tools are ways to boost productivity despite lean staffing levels,” he added.
Understanding that travel agents are looking to technology to enable productivity, Abacus recently introduced three new ‘orchestrated web services’ on Abacus WebConnect. This helps agents maximise their websites and improve work efficiency as it combines multiple transactions intelligently into a single web service call. This can be up to 25 times faster than executing all service calls individually.
Technology is also having a positive impact in middle and back office workflow, where much of an agency’s time and resources have traditionally been committed. Responding to this, technology solutions such as the Abacus PowerSuite integrate the workflow with the front office activities, freeing staff from laborious and time-consuming paperwork and allowing staff to apply themselves to income-generating activities such as closing sales through attentive and fast service to customers.
Unique to this part of the world, net fares are the fares most used by the travel agents. These dynamic, fast-changing fares mean that travel agents must ensure they have the latest and most updated fares at their fingertips. Traditionally airlines and wholesalers have distributed net fare information via fax or email. These channels make keeping track of net fare changes a chore and often result in inaccurate fare quotes or misinterpretation of fare rules, leading to travel agents incurring Airline Debit Memos (ADMs). Apart from the considerable financial impact, airline debit memos can also be the cause of strained relationships between travel agencies and airlines.
By contrast travel agencies using Abacus FareX have reported productivity gains from their use of this net fares management and distribution solution, currently used by over 200 airline sales offices in Asia Pacific. The solution has also brought efficiencies in operations and distribution to participating airlines, online travel agents, wholesalers and Abacus-connected travel agencies. Airlines currently flying into strong economic headwinds, have continued investing in appropriate technology as a productivity enabler. A solution that has won them over is Abacus SmartPrice, an airfare pricing system that greatly increases the frequency and hence accuracy of these vital updates to travel agencies.
“The enhanced features of Abacus SmartPrice have definitely bolstered our operating efficiency and service offerings,“ said Mr Jimmy Cheng, Manager Pricing, Cathay Pacific. “With the builtin capacity to incorporate new updates, Abacus SmartPrice is an effective tool for accurate pricing and fare information.”
Travel agencies are also gaining efficiency from the solution. Abacus SmartPrice delivers more fare options while improving the efficiency of the fares and pricing process by over 50%. Staff productivity has increased and consequently morale has also improved. Mr Farid-uz-Zman, General Manager of Waljis Travel in Pakistan remarked, “Abacus SmartPrice has streamlined our agency work processes into simple and easy steps, boosting our team’s efficiency and confidence in delivering quality customer service.”
Over the past 20 years Abacus has invested over S$100 million to help its network of over 15,000 travel agency locations achieve productivity gains and cost reductions. “As the leading GDS in Asia, Abacus is acutely aware of the business pressures travel agents, and indeed all players in the travel distribution chain are facing today and committed to helping them address these,” Mr Bailey concluded.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
