OPERATING a travel agency has become more challenging than ever in recent years, as online holiday and flight bookings undercut traditional client relationships and put pressure on the bottom line.
OPERATING a travel agency has become more challenging than ever in recent years, as online holiday and flight bookings undercut traditional client relationships and put pressure on the bottom line.
Add to that the pressure of adjusting to a new way of doing business in her new home of Australia and it seems Judy Martin has worked hard to grow her Travelworld business from a $1.6 million turnover to $4.6 million since buying it seven years ago.
Before buying the business in 2003, Ms Martin owned a travel agency in Zimbabwe. She said the changes in the travel industry, including in pricing structures, since she moved to her adopted country have been a challenge.
“We used to carry the 1 per cent credit card fee, but now we have to charge the clients that fee because we are getting 5 per cent [revenue on bookings] and you can’t run a business at 4 per cent. We have to be running at 11 per cent and all the airlines are giving you is five, so you have to subsidise it some other way,” Ms Martin said.
With airlines having removed the commissions paid to travel agents for booking flights in an effort to entice travellers to book directly with the carrier, the agents’ role has become even tougher.
“All the airlines are trying to cut their commissions. The travel agents have had to introduce service fees. Of course you are going to find it more and more that travel agents will implement service fees for everything,” she said.
The new pricing structure has introduced a number of challenges.
While some customers walk away when they see Travelworld charges a service fee, it is the ‘service’ part of the fee Ms Martin believes clients should focus on.
“When the volcano [Eyjafjallajökull, in Iceland] happened, all the people who made their bookings on the internet were stranded; they couldn’t phone anyone. But our business was operating at midnight, getting people back via New Zealand,” Ms Martin said.
The level of service she and her staff offered their clients maked the difference for their business.
“Every travel agent will tell you their point of difference is their service; everyone is going to say the same, of course they are, but mine is proved with the increase in turnover,” she said.
While the growth in online ticketing had been a major setback for the traditional travel agent model, Ms Martin remains positive about the future.
“The baby boomers are starting to drop off [in their travel needs]. They are the ones who book more because they don’t know the internet so well. You have got your generation Y coming up and generation Z, they are taking over and they are more internet savvy,” she said.
“When people tell me what price they got [online] I say ‘we could have done that, and you would have got service. The internet can be a worry, but as agents you are offering your professional service,” Ms Martin said.
There may be some unchartered territory so far as the future direction of the travel industry is concerned, but Ms Martin sought out familiar ground when she arrived in Australia, focusing on building her networks, joining the same networking group she was a part of in Zimbabwe.
“When I first got here I knew no-one, I belonged to a networking club, a travel club. That helped me because it is only managers and owners that have been members for three years,” she said.
“When I got there, the head of Qantas was there, Malaysian, Thai and head of Burswood, so when I had a problem with one client, I couldn’t get them out of a country, I phoned the head of Qantas.”
She has also worked on promoting her service among her contacts within the Zimbabwean expatriate community in Perth.
“All my Zimbabwean friends have supported me, everyone goes back to Africa all the time,” she said.
