Travel Industry Insight

Five challenges facing tour operators in 2017

International tourism continues to be one of the fastest growing economic sectors in the world, as evidenced by demand remaining robust throughout 2016 with international tourist arrivals growing by 3.9% and totalling over a billion.

Although highly sensitive to both actual and perceived risk, the industry has experienced seven consecutive years of uninterrupted and sustained growth, something which hasn’t happened since the 1960s.

The primary driver of global tourism continues to be the significance it holds on a social, cultural, and political level. For the traveller, it’s easier now than ever before to book trips online with more choice and more booking platforms, but although there are plenty of online travel giants to choose from, specialised and personalised services that provide unique customer experiences aren’t always offered. As a result, offering an enhanced travel experience has become a niche market for tour operators.

This lack of personalised services is also the primary reason why experts believe that almost half of all travel agency bookings will still come through offline channels by 2020 but despite this, the tourism sector is under enormous pressure to keep up with technological advancements to efficiently manage client expectations.shutterstock_128236091

That being said, travel companies don’t invest in the latest innovative technology which means that specialist tour operators aren’t taking advantage of available tools like automation of repetitive tasks and online booking. In fact, 83% of companies in the travel industry still utilize traditional methods to manage daily operations. This, in turn, can make them invisible to the digital customer who is looking for what they are offering online.

Let’s take a look at five of the key challenges faced by tour operators today.

1. Lack of Brand Awareness

The emergence of the internet has changed the travel marketplace forever. Today, the industry is dominated by a handful of large players such as Booking.com, Expedia , TripAdvisor , Kayak, and Skyscanner.

These companies have managed to build a huge brand presence and continue to invest in brand awareness and reinforcement. With deep investment in promoting their brand across a variety of channels, these companies are succeeding in luring in customers while increasing brand preference and loyalty.

But there is plenty of room for everyone as only about 53% of all bookings came through online channels. For tour operators to establish and maintain their brand recall value and compete with other tour operators, there has to be some investment in digital technology like customer relationship management solutions to enhance their online presence and manage their reputation while providing a personalised service.

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2. Digitisation Leads to Enhanced User Experience (UX)

Online travel industry giants are great at personalising their promotions and services to the customer on their websites (by taking advantage of the latest technology). Furthermore, they are also known to invest heavily in UX to provide a complete end-to-end shopping experience. This means that these travel websites are able to do the following:

  • Configure a trip (based on choice of activity, interest, or destination)
  • Automate follow-up emails (confirmation, pre-trip email, and post-trip survey)

The majority of boutique operators are still sending quotations in a traditional manner (such as a PDF attachment to an email). This process can be both labour-intensive and time-consuming if, for example, itineraries need to be copied or retyped or prices need to be looked up because they don’t have a system that can generate both. Furthermore, once the booking is made, they also have to diarise or remember to carry out the follow-up tasks. p2 Taking advantage of technology doesn’t mean that tour operators should build mobile apps to sustain their business. Investment would be difficult to justify here as approximately 76% of apps that are downloaded aren’t used after the first day, but it is important that the company’s website is mobile-ready to ensure that a quality experience is preserved on a smaller screen. Whether it’s customising an itinerary, selling a prepackaged tour, or creating and promoting their own holiday packages, digitization is a smart investment. Not only can it significantly enhance productivity and efficiency, it can also help retain current customers.

3. Customer Engagement & Retention

Due to their personalised service and first-hand knowledge of hotels, regions, and experiences of a destination, tour operators normally have a very loyal customer base. However, their client base can be very limited if they rely solely on email campaigns and website traffic.

Staying competitive in this industry requires continuous creativity to find innovative ways to attract new customers. This is where an active presence on social media can help as you can create brand awareness cost-effectively while engaging with the target audience.

Being active on social media can also pay off as 84% of Facebook users stated that their travel plans were influenced by friends on the platform. But to attract this audience, you will need a well-thought out social media strategy that’s coupled with a Customer Relationship Management (CRM) platform.

When done efficiently, tour operators will be able to create appropriate content that will appeal to their customer base by sticking to a schedule that matches the reading habits of the target market. But a lack of investment in appropriate technology means that many tour companies aren’t taking advantage of these innovative tools.

For example, although email newsletters are an easy way to cheaply conduct outbound marketing, it offers very little value if you don’t have an extensive database or if you can’t get past the spam guard.

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4. Building Credibility & Trust

The travel industry is an extremely tough business to build trust and credibility. Mistakes can be made if tour operators don’t take advantage of technology that can help eliminate human error. For example, there is a higher probability to make a mistake when manually entering the customer’s details and requirements in an Excel sheet. There might also be situations where some sales representatives use an outdated price book which can lead to inconsistencies between quotes.

Re-keying errors can often create mistrust and could also lead to lost sales. This is the primary reason why salespeople spend 23% of their time fixing mistakes (which can add up to three months of the year), searching for information, and reading out the itinerary over the phone.

Additionally, if there isn’t a CRM system in place, there won’t be any access to the customer’s history (including conversations with colleagues) which can help team members understand the customer and their requirements quickly. w1

Credibility can also be lost if tour operators take too long to manually customize a trip to generate a quote. This process can also lead to sales representatives spending more time on administrative tasks than directly helping customers to plan their holidays. If tour operators are too slow when it comes to generating quotes, they will lose the sale to a competitor who has incorporated a robust CRM system.

Poor credibility can quickly lead to negative reviews and testimonies that can have a significant impact on sales. According to research, reviews increase visitor browsing time on travel sites between 50 and 100%, so it’s important for tour companies to stay on top of this in real-time. Furthermore, if the reviews and ratings look curated or are only available on the company’s website, it can also lead to questions about the credibility of these reviews.

5. Working with Multiple Systems

Boutique tour operators can suffer from using multiple systems that aren’t necessarily fully integrated. For example, they might use one platform for booking, another for CRM, and yet another platform for client payments.

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Switching between platforms means more work and this can lead to delays in providing quick and accurate information to the customer. Multiple systems can also create a situation where an agent, back-office, and management team will spend time jumping between multiple systems without being able to process and track the data from which they would be able to derive valuable insights.

So what is the best solution?

What can essentially improve the performance and consequently boost the sales of tour operators is a new generation booking and CRM platform.

Best of Class Solution for the Travel Industry 

Incorporating a new generation booking and CRM platform like Kaptio Travel will help travel companies work efficiently by automating repetitive tasks, maintaining accuracy and working smarter, while enabling the management of products, prices, suppliers, and business accounts all in one system. Tailored specifically for the needs of travel service providers, everything from managing transactions history to producing complex processes can be achieved within minutes.

The ability to manage all core business functions, including Configuration, Price, Quote (CPQ) on one platform has the added value of automatically providing statistical analysis. This means that tour operators will have an accurate view of the health of their business and will also be able to identify areas that need improvement (and respond quickly).

What’s even better is that the Kaptio Travel API can be incorporated into a tour company’s website easily and cost-effectively. This, in turn, will give your customers real-time online access to the latest deals and pricing, while keeping track of their search history in the CRM system.

All of the Kaptio Travel tools together will enable interactive outputs to customers, voucher generation, up to date pricing, supplier management, itinerary customization, and operations management.

What’s more, as it’s built on top of Salesforce’s robust CRM system, tour operators can now efficiently respond to business challenges in real-time.

Want to find out how Kaptio Travel can enhance your business? Request a demo right now!

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