TRN continues to share with its readers the opinions of market experts on current events. We present to you a commentary from Ilya Kostrikin, director of the tour operator "Travel Store."
In his opinion, tour operators have overestimated this season demand for the product.
"Large tour operators have long had a well-established system of working with prepayment. They take fixed hotel blocks, pre-pay for charter flights, or block seats on scheduled flights. And then, if there's no demand, the operator ends up with a huge loss.
This season, tour operators appear to have overestimated demand for their product, and now partners and lenders are no longer willing to provide them with loans or work on credit.
Although the tour operator "Travel Magazine" has been operating for 20 years, it has always built its relationships with partners on a different principle. Without payment from tourists, we do not pay for partner services and do not use borrowed funds to grow our business.
Large operators have been unable to adapt to this operating model, but times and businesses are changing, and old models no longer work. The product and consumer have evolved, and many independent travelers have emerged. Therefore, operators need to offer the market a product that is either competitively priced or exclusive—one that tourists cannot assemble independently.
From the very beginning, we've been creating unique tourism products for Russians with average incomes. Therefore, we haven't seen a decline in demand, and trust in the company remains strong.
What other mistakes have large operators made in recent years? They reduce agent commissions or offer constant, huge discounts to direct clients. This is unacceptable, as the agency network is the backbone of sales and the industry as a whole.
And, of course, the 2014 crisis had an impact. Back then, many operators didn't quickly resolve their financial problems, but rather put them off until later, and now the inevitable has happened.
Overall, real incomes and purchasing power have declined recently. The crisis reached our industry slightly later than the main consumer markets, but it is nonetheless one of the reasons for the current situation.
So how can travel agencies survive now? We recommend that agencies build their product offerings so that they can offer tourists any type of vacation at any time: from an extended vacation to a one-day tour. When Turkey and Egypt were closed, many agencies left the market because they were selling only these destinations. The task of a travel agency owner is to encourage managers to transform the agency into a true "tourist supermarket," where knowledgeable consultants will help tourists in any situation. Managers often simply don't want to waste time on cheap tours with a small commission, and this is the key to success. When an agency manager understands the full range of products and is willing to sell budget tours to tourists, this is the solution if overall solvency is compromised. And that's exactly what's happening now.
The era of single-destination travel is long gone; tourists want a service that helps them select a tour that takes into account all possible options. Agencies that can't do this will lose tourists, and therefore, their business," he believes. Ilya Kostrikin.
Source: trn-news.ru