Travel Reference
In-Depth Information
Range of products and services
Dynamic packaging
By offering a wider range of products and services than
its competitors, a travel agency can attract extra custom,
thereby gaining a competitive advantage. Multiple travel
agency chains have strict guidelines on which products
they promote and sell. Independent agents have more
freedom to promote a wider range of specialist holidays
and travel products. Some independent agents offer
their own escorted tours as a way of increasing income
and gaining an edge over the competition.
'Dynamic packaging' is when travellers use the internet
to research their holidays and make their own travel
arrangements direct with airlines, hotels, car hire
companies, etc. It offers people greater fl exibility than
buying standard holidays from a travel agency. Dynamic
packaging is a serious threat to travel agencies as they
stand to lose business to these 'DIY travellers'. Many
agencies are fi ghting back by offering customers a
more 'tailor made experience', using new web-based
technologies. In effect, the travel agents are themselves
getting involved in dynamic packaging on behalf
of their clients, thereby hoping to gain competitive
advantage.
Add-on sales and ancillary
products/services
Integrated organisations
As profi t margins on the sale of holidays can be very low,
travel agents are always keen to persuade customers to
buy add-ons to their holiday and ancillary products and
services, such as airport car parking, travel insurance,
foreign currency and car hire. Percentage commission
on these products is often much higher than for
package holidays themselves, so staff are encouraged
to offer them to clients at every opportunity.
We saw earlier in this unit when discussing integration
that the multiple travel agencies are part of much bigger
travel groups, which own tour operating businesses and
even airlines. Travel companies become integrated to
improve their competitive position in the marketplace
and increase their market share by having more control
and benefi ting from 'economies of scale', e.g. when a
travel agency and tour operator are owned by the same
organisation, company functions such as purchasing,
fi nance and human resource management can be
carried out by fewer staff, thereby reducing costs.
FOCUS ON INDUSTRY
HOLIDAY EXTRAS
Holiday Extras was the fi rst company to offer UK
travel agents an airport hotels and car parking service
back in 1983. Today, the company is the market
leader in holiday extras - airport hotels, car parking,
travel accessories, car hire, travel insurance, etc.
With an annual turnover of £100+ million, it makes
arrangements for around 3.5 million passengers per
year from its call centre and website. The company
is used extensively by travel agents who earn
commission on sales and extra incentives such as
prize draws and high street shop vouchers. It is still
independently owned by its founder Gerry Pack.
Activity 9.9
Explain how an independent travel agent and a
multiple agent use techniques to seek to gain
competitive advantage. Compare the effectiveness
of the techniques used by the two retail agents to
gain a competitive advantage. Recommend the use
of alternative techniques to gain further competitive
advantage for the two agents.
This activity is designed to provide evidence for P3, M3
and D2.
Weblink
Check out this website for more
information on Holiday Extras.
www.holidayextras.co.uk
