Travel agencies are encouraged to shift from price competition to value proposition.
- Hays Travel’s leadership emphasised the importance of margin growth at a recent conference.
- Delegates were informed of significant year-on-year growth in passenger numbers and sales.
- Cruise sales are highlighted as a key area for increased profitability.
- There’s a strategic push for agents to offer additional services like insurance.
In a strategic move to steer the travel industry towards sustainable profitability, the Hays Travel Independence Group (IG) has called upon its members to avoid engaging in price wars and instead focus on providing value through exceptional customer service. This directive was issued at the Hays IG domestic conference in Leeds, where Jonathon Woodall-Johnston, the Chief Operating Officer, emphasised the importance of recognising the distinctive value that travel agents offer beyond mere cost considerations.
Reportedly, around 130 delegates were present at this conference, which showcased impressive growth metrics—passenger numbers increased by 15.80% and gross sales by 22.25% over the period from May 1, 2023, to February 29, 2024. Such statistics were underscored to highlight the efficacy of a value-centric approach in contrast to aggressive discounting strategies.
Woodall-Johnston articulated the need for agents to prioritise higher-margin products, specifically pointing to the potential within the cruise sector, which currently constitutes nearly 17% of sales through IG members. This is a target for growth, as it trails behind the company’s retail division, which captures 25.29% of its business from cruises. The ambition is to see cruise sales accounting for 33% of all sales.
In a bid to further enhance profitability, it was recommended that agents aim to optimise the product mix by incorporating ancillary services and travel insurance at the point of booking. This approach not only boosts revenue but also enhances customer satisfaction by providing comprehensive travel solutions.
Moreover, the potential for increasing Sunday bookings was highlighted as a viable opportunity for agents to exploit further, suggesting a nuanced understanding of consumer behaviour and scheduling flexibility as additional advantages.
Focusing on value rather than discounts is essential for long-term profitability in the travel industry.
