Agents fighting fit to take on challenges of 2010
Abacus says investments in technology and online space have paid off for agents with more wanting to embrace new channel.
It appears that the year of “Tough Love” may have been good for travel agencies in Asia, putting them in better shape to take on the challenges ahead, particularly in the online space.
According to an Abacus Asia Travel Sentiment Survey of around 200 leading travel agents across the region, 92.3% said that the changes they have adopted during the economic downturn have strengthened the business and put them in better shape for 2010.
The number one change cited by the majority of agents was the sale of ancillary products.
Abacus’ president and CEO Robert Bailey says: “We found that almost 60% of the agents indicated that the sale of ancillary products such as hotels, travel insurance and other non-air products had helped sustain their business revenues.”
The second change ranked by around 40% of the agents was the launch of promotional deals and packages.
The third change was allocating more resources to online channels tied with technology investments with 30% of the travel agents saying that these investments have brought improvements to their businesses.
“We expect to see continuing investments in innovation and technology as agencies start to see the value that these changes have brought to their business models,” explains Bailey.
Abacus ended 2009 with a 1% decline in overall bookings – a “better than expected” result – and is forecasting 3-5% growth in travel bookings for the first half of 2010.
Abacus tips that emerging markets – one of the green shoots seen during the economic crisis – will continue to drive travel bookings up with IndoChina and Central Asia as key growth regions. Several other markets such as Nepal, Bangladesh and South Korea had also contributed to Abacus’ better-than-expected business results.
One bright spot was the online space, says Bailey. “Abacus’ overall figures for 2009 showed a much higher-than-expected growth of more than 15% and although it was amidst harsh market conditions, we made further in-roads in the online segment of markets such as Indonesia, Philippines, Vietnam and China.
“Higher internet penetration and rising incomes from the emerging markets will bring forth an increased dependence on this channel for travel consumption.”
He said that Initiating or expanding an online plan has become one of the key pillars in a company’s rebuilding efforts as this channel has proven its strength in the face of challenging economic conditions.
“Overall, we are forecasting 20% industry growth in 2010 as technology adoption across the region continues to increase.”
Travel agents across Asia have ranked this channel as one of the top items in their wish list for the year according to the Abacus survey.
Of the travel agencies that have no existing online business component, 71.3% said that they are planning to develop one and more than half said they will have the website ready within the next six months.
In addition, the survey found that online bookings contributed up to 15% of revenue for 42.6% of the agencies last year while another 35.6% said it contributed 15 – 30% of their revenue.
These responses from the ground clearly show the gradual shift that market players are taking in embracing the online platform as one of the core revenue streams in the new decade, says Abacus.
Abacus says investments in technology and online space have paid off for agents with more wanting to embrace new channels.
It appears that the year of “Tough Love” certainly may have been good for travel agencies in Asia, putting them in better shape to take on the challenges ahead, particularly in the online space.
According to an Abacus Asia Travel Sentiment Survey of around 200 leading travel agents across the region, 92.3% said that the changes they have adopted during the economic downturn have strengthened the business and put them in better shape for 2010.
The number one change cited by the majority of agents was the sale of ancillary products.
Abacus’ president and CEO Robert Bailey says: “We found that almost 60% of the agents indicated that the sale of ancillary products such as hotels, travel insurance and other non-air products had helped sustain their business revenues.”
The second change ranked by around 40% of the agents was the launch of promotional deals and packages.
The third change was allocating more resources to online channels tied with technology investments with 30% of the travel agents saying that these investments have brought improvements to their businesses.
“We expect to see continuing investments in innovation and technology as agencies start to see the value that these changes have brought to their business models,” explains Bailey.
Abacus ended 2009 with a 1% decline in overall bookings – a “better than expected” result – and is forecasting 3-5% growth in travel bookings for the first half of 2010.
Abacus tips that emerging markets – one of the green shoots seen during the economic crisis – will continue to drive travel bookings up with IndoChina and Central Asia as key growth regions. Several other markets such as Nepal, Bangladesh and South Korea had also contributed to Abacus’ better-than-expected business results.
One bright spot was the online space, says Bailey.
“Abacus’ overall figures for 2009 showed a much higher-than-expected growth of more than 15% and although it was amidst harsh market conditions, we made further in-roads in the online segment of markets such as Indonesia, Philippines, Vietnam and China.
“Higher internet penetration and rising incomes from the emerging markets will bring forth an increased dependence on this channel for travel consumption.”
He adds that initiating or expanding an online plan has become one of the key pillars in a company’s rebuilding efforts as this channel has proven its strength in the face of challenging economic conditions.
“Overall, we are forecasting 20% industry growth in 2010 as technology adoption across the region continues to increase.”
Travel agents across Asia have ranked this channel as one of the top items in their wish list for the year according to the Abacus survey.
Of the travel agencies that have no existing online business component, 71.3% said that they are planning to develop one and more than half said they will have the website ready within the next six months.
In addition, the survey found that online bookings contributed up to 15% of revenue for 42.6% of the agencies last year while another 35.6% said it contributed 15 – 30% of their revenue.
These responses from the ground clearly show the gradual shift that market players are taking in embracing the online platform as one of the core revenue streams in the new decade, says Abacus.