Consumers may be planning to increase leisure and business travel this year, but that doesn’t mean the travel agent industry will benefit from the increased spending. The traditional business model for travel agents has been disrupted as more consumers use online resources to plan and book their vacations and business trips. The new operating environment means travel agents must find and market new services and many are turning to ancillary services to fill the revenue gap.
A new report from Amadeus-Forrester predicts that profits from the sale of ancillary services are set to soar through 2015. Currently, ancillary service comprise 12% of revenue but that figure may jump to 18% by 2015. These third-party services offered by travel agents will increase the number of touch points with end consumers and increase revenue potential before, during and after a trip. These efforts on the part of travel agents will require them to shift marketing channels. Instead of working exclusively via telephone or snail mail, agents will need to beef up websites to cross-sell products and roll out mobile services to meet the needs of clients when they are on location during a trip.
The most popular third-party services are insurance, car rental and hotel room sales. But industry analysts see travel agents preparing to offer ‘extreme’ ancillary services:
- Digital virtual reality tours of airports, hotels and cruise ships before booking or arrival
- Digital concierges to assist with in-hotel or airport needs
- In-journey spa treatment bookings
- Entertainment ticket sales
Travel firms will need to become more retail-oriented to achieve sales growth in the competitive market. They’ll also likely increase their mobile marketing and be looking for marketing partners to improve their business prospects.[Sources: Cross-Sell Your Way to Profit. Amadeus.com. 18 Jan. 2011. Web. 7 Feb. 2011; Dooley, George. Expect Cross-Selling to Grow as Key to Travel Agent Profits. 18 Jan. 2011. Web. 7 Feb. 2011]