These Are Some Exciting Times For The Travel Agencies!
Times are changing for travel agencies. A more competitive environment and discerning customer is forcing them to up their game and offer a more proactive business model. One of the key areas many experts believe the industry should be looking at is merchandising.
Why Is This Happening?
This has already delivered terrific dividends for the airlines who have wholeheartedly embraced merchandising. Research in 2014 showed at merchandising accounted for more than $17 in incremental revenue per passenger. A few years ago in 2007, ancillary fees accounted for 16.2% but in 2014 that had risen to almost 40%. The numbers are impressive, but until now travel agencies have stayed away.
According to the recent ‘Think Like a Retailer’ report opportunities exist right the way through the passenger journey. What’s more as they become more discerning they like providers who offer these opportunities. It’s a win/win situation.
The example of the airlines has paved the way for agencies to become far more proactive in the way in which they adopt their business. Those which are first to the mark will secure a crucial advantage in what is already an incredibly competitive market.
In addition, the travel market is also picking up more generally. After several years of sluggish growth after the economic crisis of 2008, traveller numbers are now finally reaching and surpassing their pre-2008 levels.
These Opportunities Can Also Brings Challenges
The amount of money passing through travel agencies is set to expand rapidly. With such large transaction volumes the ability to accept credit cards – particularly over the web – is a must-have for agencies. The trouble is, when it comes to finding a merchant account provider, many are finding it more difficult than they might imagine.
The problem stems in the type of business they are engaged in. This is one which is viewed as high risk for many banks and merchant account providers. It doesn’t matter how well you run your business, or how good your transaction history – for some you’ll still represent too much of a risk.
There are, of course, options out there. Although they can be difficult to find, merchant account providers with an appetite for risk, are available who can cater specifically to the travel agency market.
This Can Come at a Price
The search can be long and arduous and the business terms may not be favourable. Higher fees and more restrictive terms can impact on the bottom line. Profitability takes a hit and cash flow can be stymied. For small and emerging business whose cash flow can be critical at the best of times, this can easily become a serious threat.
The selection of partner, therefore, is a critical issue. There is significant variation between the available parties in the quality of services they provide. Some will be more suitable than others for your business – the difficulty is finding the best ones for your requirements.
This is one of the services we provide. Wading through the possible options can be expensive and time consuming. We’ve done all that for you. We have contacts with some of the best merchant account providers for travel agencies and can work to find the best ones for you. Get in touch to see what we can do for you and your business.