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Mon 9 Feb 2009 04:00 AM

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Beating the bear

Arabian Travel News asks industry experts for their views on the best ways for travel agents to stay afloat during the current bearish economic conditions.

Arabian Travel News asks industry experts for their views on the best ways for travel agents to stay afloat during the current bearish economic conditions.

All things being equal, the first thing that generally happens during any crisis, particularly a financial one, is blind panic with everyone running screaming for the exits.

Now is the time for some agencies that have been giving too much credit and discounts to maybe correct a little bit.

Former US President John F Kennedy famously remarked: "The Chinese use two brush strokes to write the word ‘crisis'. One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger - but recognise the opportunity."

As the region's travel trade braces itself for the effects of the economic downturn, ATN seeks top tips from industry experts on how to stay calm and safely navigate through this period of uncertainty.

Quality comforts

"I've said it before, but what agents in this region have to do is provide a quality of service and transparency with their clients," said Dubai Travel and Tourism Group (DTTAG) general manager Leo Fewtrell.

"That way they can start looking to make money rather than just giving it away. The last thing the industry needs is discount wars; agencies need to show value, that is what will make the difference."

In a nutshell, if travel agencies try to discount to attract more sales in the short term,  they will miss out in the long term to agencies that focus on providing quality of service.

"Now is the time for some agencies that have been giving too much credit and discounts to maybe correct a little bit," added Alpha Holidays general manager Fabian Fernandes.

"We are always quite strict on credit, but we will make sure that our quality of service remains as high as ever and that is the best thing to do in the market at this time."

Sometimes adding value to a service can be as simple as making the customer feel valued, according to Piers Bracher, the clients director at UK-based marketing firm, Diamond Advertising.

"Losing a customer or a sale is the easiest thing in the world to do," he said. "You must make them feel happy and involved; a happy customer is not a price-conscious one."

Customer retention

The one thing that no travel agency can afford to do when times are tough is to lose its grip on its existing customer base.

"It's fair to say that retaining clients is usually cheaper than acquiring new customers," said Deloitte & Touche director corporate finance advisory Deborah Griffin. "So that should definitely be a focus area."

Bracher takes the point a step further, claiming that retention of existing clients is "vital in a downturn".

"If you don't have a strategy in place for this you're in trouble because one of your competitors will - and then they will take your customers too," he said.

Both Deloitte & Touche's Griffin and Diamond's Bracher concurred that strategies for retaining customers need not be complex or time consuming.

"Do email marketing," suggested Griffin. "It's a very cheap way of getting in front of your customers - and it works."

"Agencies could be original and try to do follow up calls to customers without actually trying to sell something," added Bracher.

"That extra attention travel agents pay to their customers will be pivotal to retaining their business - and it's a very straightforward process."

Know your product

One key survival strategy, regardless of the state of the market, is ensuring travel agents boost their product knowledge.

"The more you know about your product, the smarter you can market it to your clients," Griffin pointed out. "In turn, that means your marketing is more focused and so becomes less expensive."

DTTAG's Fewtrell added: "If you don't know your product, it's guaranteed that staff will be wasting a lot of time on things that aren't bringing in revenue.

"The more you know a product the better you can present it, package it and sell it. Taking the time to get that knowledge isn't a luxury, it's an essential."

Bracher echoed Fewtrell's comments: "When the market changes as drastically as we've seen it change globally over the last few months, consumer buying patterns change with it," he said.

"Sometimes in a downturn you see companies panic and try something different, rather than stick to their strengths - it's a case of some people saying there's a niche in the market, but no one checks if there's a market in the niche. The agencies that know their customers and know their product will be fine."

Staff solution

It's no good having a good plan without the means to carry it out and getting the right staff on board and retaining them is essential, particularly during a downturn.

"As in most travel businesses, the knowledge and quality of your staff can mean the difference [between survival and failure," said Deloitte's Griffin.

"So keeping hold of good staff when there's a downturn becomes doubly important."

Bracher added: "Staff need to be properly incentivised to promote what they are selling. I would even go so far as to say that staff should be better rewarded for retaining clients than making new acquisitions. It would be quite a new game for this region, but it's definitely one worth pursuing."

The thinking seems to be a good quality staff will pay dividends long term, ensuring the agency secures customer loyalty.

"Is sounds obvious, but having a good quality of staff and treating them well so they stay with you makes such a difference to your business," enthused Prime Travel (Dubai) general manager Richard Evans.

"We incentivise our staff every way we can and it really pays off. That way your staff stays with you for longer so they know their jobs better and it benefits the business and your customers, because they can deal with the same people over a longer period of time; it creates a level of comfort and security."

DTTAG's Fewtrell warned that if staff are not properly trained, agencies will suffer.

"Treat staff well, manage their time well and train them and it will be beneficial in the long run," he said.

Bracher said it was worth some agencies in the region re-training their staff to meet the new challenge of the economic downturn.

"A lot of staff in this region in the travel industry are probably used to being reactive because there has always been such a high demand," he mused.

"It's time to find ways to encourage them to proactively generate interest and sales. If you have staff that can do that then you're already halfway there."

Don't panic

"What the travel trade can't afford to do is shut down its marketing altogether," said Bracher. "Sometimes when money is tight, that's what companies do and all it does is lose them customers."

Deloitte's Griffin echoed his sentiments: "Understanding what your customers want and being able to market that to them is probably as important as knowing your product," she explained. "Market smart; every dollar spent should be an expensive dollar, but make sure you do still market."

This period called for a time for reflection, said Fewtrell.

"It's a time for agencies to look at themselves and see what they can improve," he said.

"Bigger agencies can learn from smaller agencies in terms of being more personable and smaller agencies can learn from bigger agencies in terms of successful strategies. That way they will think things through before cutting prices in a panic."

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