Brick-and-mortar travel agents still have a future – if they adapt
With today’s digital age and millennial generation, thriving as a brick-and-mortar travel agents has been challenging, but possible, says global travel technology company Amadeus.
Amadeus Asia Pacific senior VP of retail in travel channels Ramona Bohwongprasert told Inside Retail Asia “there is still a lot of opportunity for travel agents with physical retail spaces, but it’s critical that they change their operating models and how they use their stores”.
She recommends physical travel agencies use augmented reality (AR) and virtual reality (VR) technologies to make their stores immersive and experiential, offering that online booking engines can’t.
She cites Japanese travel agents JTB and HIS as examples, which pioneered the concept of Hawaii-themed stores in Tokyo and Osaka and provided VR headsets for customers to engage with the destination using 360-degree video content.
“This type of experience is especially attractive to millennial travelers, a segment that retail travel agencies have been losing to online travel sites,” added Bohwongprasert.
She believes brick-and-mortar travel agents can still compete with online travel vendors by making the most of their human element, which still appeals to Generation Xers, who are likely to use online-only stores or brands. She stressed, however, that in order to stay competitive, “travel agents must adopt an omni-channel strategy to ensure they are present wherever and whenever the traveler needs them”.
“An omni-channel business model allows travel agents to have customer touchpoints wherever they are, via whatever channel they choose, and for whatever purpose they need. To provide this experience, travel agencies, who have traditionally focused on the human touch, must now look at combining the physical, digital, and human experiences, and their success hinges on their ability to integrate the right technology to power this,” she said.
Pacific Asia Travel Association (Pata) CEO Dr Mario Hardy seconds the belief that brick-and-mortar travel agents are not doomed yet, saying “there is still a place for them”.
However, a business-model transformation is necessary to make it in what he describes as a cut-throat industry.
“I imagine we will see an increase in private-travel membership clubs that can offer uniquely personal services. Actual physical spaces will be transformed into lounges where a destination can be experienced in different ways such as through virtual reality, food-and-wine tasting, and decor and ambience,” said Hardy.
In Asia Pacific, the travel market will continue to grow, with China and India accounting for most of that growth. In its report The Future of Retail Travel in Asia Pacific, Amadeus said that China already accounts for more than half of travel expenditure from the region. And it predicts that by 2025, the spending power of Chinese travellers will be equivalent to that of Europe or the Americas.
Meanwhile, Indian travellers are expected to spend more than US$450 billion annually by 2025 and by 2024, its young and vibrant population is expected to overtake China’s.
The report described these travellers as diverse in terms of needs, wants and preferences, and recommends travel agents customise their offers to meet their expectations.
Image: AR – seen here being used to demonstrate a motor vehicle in a car dealership – can be used to engage customers of travel agencies.