Selling expertise the priority
An upheaval has been under way in the travel agency sector for several years. Airlines, in their search for cost cuts, have reduced the sales commission paid to travel agencies. Finnair discontinued the payment of sales commission in autumn last year and adopted the practice of net pricing in the pricing of flight tickets.
In the new model, a travel agency prices its services and the customer can easily compare the price-quality ratio of different travel agencies' services. In the travel agencies' earning model, the focus has shifted from sales commission to service fees charged from the customer. Travel agencies are now having to sell their expertise, which is consequently highlighted as a competitive factor.
In the area of business travel, the travel agencies have invested in developing and providing travel management services for companies. Through correctly implemented travel management, companies can achieve significant cost savings in their travel budget. In the leisure travel sector, the focus has moved from agent sales of simple packages to personalized travel arrangements.
Companies' price consciousness and their efforts to cut their travel costs have put the relationship between travel agencies and corporate customers under the spotlight. Travel is looked upon by companies as a production factor that must be optimized in order to achieve cost-effectiveness. Companies can outsource their travel management to a large extent, enabling the company-travel agency relationship to be based on a partnership from which both parties benefit. |