Travel then and now: what’s in store for retail travel agencies?

August 21, 2019

Last updated: March 10, 2022

3 min read

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Historically, as an industry, we have always thought about how we book. The unstoppable digital transformation across travel made us focus on how we search. Now, I think the question for travel agencies is slightly different: how do we inspire?

With evolving technology and increasingly demanding customers, it is time for retail travel agencies to embark on a journey of transformation which will keep travelers coming back for more.

Before the internet came to be, people would either visit a physical travel agency or call an agent to make travel arrangements. The digital revolution profoundly changed things enabling people to book airline tickets, hotels, car rentals and other services online.

As more travel agencies started providing services on the internet, the consumer who enjoyed lower prices and on-demand convenience gave into the ‘magic’ of online booking. Travelers could access rich content, efficient platforms and innovative technologies which is how global online travel agencies were born.

However, amid the industry undergoing digital transformation, retail travel agencies continued to provide face-to-face consultation, personalized trip planning, assisted travel booking and attentive customer service.

Their value proposition was to help consumers book complex travel itineraries that required a high degree of knowledge and expertise. They also catered to the niche segments who valued quality services provided by the travel agents. The humanized customer experience was an important reason behind their success.

Looking at how retail travel agencies were successful in their business and customers were ready to pay a premium for a great experience, large online travel agencies started exploring the value of humanized customer experience. For example, Ctrip, the largest online travel agency in China and the second largest globally, changed its strategy and began opening physical retail outlets across China. These stores allowed travel agents to provide personalized planning and booking services. Overall, the move led to the strengthening of the Ctrip brand through superior customer services.

While retail travel agencies build an emotional connection, the customer always has an option to receive free travel consultation and book elsewhere. Needless to say that is one of their biggest challenges.

But the retail travel industry is beginning to change its business model. In our latest research paper,‘Digitize the predictable, humanize the experiential’ , we looked at how these agencies, known for their human touch, are addressing change across the Asia Pacific region through digitization.

For instance, the JTB Group from Japan has announced a pricing policy which is designed to compensate travel agencies for delivering value-add services as part of overall customer experience. Once successfully implemented, it will encourage more retail travel agencies to follow suit and improve the retail customer experience further.

As mentioned, it is also time for these agencies to focus on taking the customer experience to the next level. Today’s travelers crave personalized, memorable and frictionless experiences and it’s up to players across the ecosystem to let them choose how to engage their services whilst ensuring all service touchpoints are readily available and seamlessly integrated. This can be achieved by providing an omnichannel retail experience through a mix of automated processes and humanized interactions, enabled across all customer touchpoints.

Technology enablers like real-time online booking with cloud computing allow customers to make online bookings, manage reservations and change travel plans from anywhere in the world. On the other hand, cloud computing can lead to reduced IT costs and greater system efficiency for these agencies.

Other enablers such as on-demand mobile connectivity, augmented and virtual reality, big data analytics and artificial intelligence can help gather and interpret large volumes of customer data. That, in turn, can assist retail travel agencies in identifying customer needs, chalk out experiences and prioritize resources.

In an earlier blog, we spoke about how technology is not designed to replace human beings, rather digitize the predictable and humanize the experiential. If retail travel agencies combine technology and human intelligence in a way that creates a convenient and cohesive environment for the consumer, they will meet and exceed traveler’s expectations through a variety of experiences.

For more detailed insights on the future of retail travel in the Asia Pacific region, download our reporthere .

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