When budgets are tight, it pays to spend money on training. Nic Paton reports
Given that we’re just a few weeks away from the fourth anniversary of the Asian tsunami, former Federal Reserve chairman Alan Greenspan’s recent description of the current economic and financial meltdown as a ‘credit tsunami’ was perhaps not the most tactful choice of words.
But he’s not far wrong. And with Bank of England governor Mervyn King using the ‘R word’ – recession – for the first time when talking about the UK economy, it is not going to be an easy year ahead for travel agents.
Historically, in a downturn or a recession, one of the first things to get the red pencil treatment is the training budget. Talk to training and development specialists and, it is clear this downturn is looking no different to any other in this respect.
As far back as July, a poll by leadership development firm Common Purpose found nearly half of firms intended to curb their spending on training, while earlier in October two management training firms, MTD Training and Beyond the Box, both said a substantial majority of firms they had polled were either freezing or cutting their training budgets.
But while such a move might superficially seem a relatively painless way to rein in spending, in the case of travel agents, it can be very much a case of cutting off your nose to spite your face.
In fact, in a downturn, it is arguably even more important to be focusing on developing and nurturing the skills of your workforce to ensure you are best placed to ride out the slowdown and come out the other end a stronger business.
“A lot of companies are looking at their training needs and resources,” conceded Gaynor Golding, learning and development manager at The Co-operative Travel. “But we are continuing as normal because we see it as hugely important to be supporting the development of our people and making sure we enhance their skills.”
To this end, The Co-operative Travel is bringing more than 200 agents to World Travel Market precisely because it is such a good platform for learning about new products, getting advice on best practice and building up the knowledge and confidence of agents.
In fact, since September, the company has been running a succession of two-day courses – called internally ‘The Wow Factor’ – for managers on areas such as customer relationship management, sales processes and coaching of staff. So far, 400 managers have been through the training.
Another reason for not cutting back on training is that, behind all the doom-and-gloom headlines, there may actually be some cause for optimism for agents.
Back in April, Supranational Hotels managing director Niels Pederson predicted the downturn might lead to a revival in visits to travel agents as customers, with less money to spend turn to agents for advice on the best deals and security of booking rather than going the DIY, online route.
“The high street has started to have a bit of a renaissance recently. What agents need in this environment is product knowledge and great customer service,” said The Co-operative Travel’s Golding.
A Travel Weekly round-table debate (October 22) concluded that agents will have to sell more holiday extras and improve customer service to survive tough trading conditions next year.
With margins being squeezed, it will be a case of agents having to work harder to retain clients. They will be forced to discount more commission to compete and find new ways to generate revenue such as selling more add-ons.
Similarly, a Travel Weekly poll last month suggested that luxury, cruise and other specialist products are likely future areas for growth. But all these are product areas where, if you want to keep and grow business, you need to have knowledgeable, motivated, customer-focused staff.
It is the agents who can deploy these specialist skills to attract and keep custom who will do well in this tough environment, suggests Flo Powell, executive director of The Tourism Society.
The society will be holding an event looking at training and how to climb the career ladder at WTM today, with speakers from training body People 1st, the Tourism Management Institute, Travel Uni and the Accredited Travel Professional scheme.
A key element will be looking at the need for agents to put in place continuing professional development schemes to help staff keep up to date in a fast-changing industry.
“People should be investing in staff training at this time. It is about customer service, destination training and language skills,” Powell stressed.
It may be hard for the industry to raise its eyes from the current downturn but agents need to look ahead and think about how they are going to maximise the opportunity of the 2012 Olympics.
“It is something that needs to change rapidly before 2012. People returning from Beijing said everyone dealing with tourists, from taxi drivers to front-of-house, spoke more than just Mandarin and sometimes more than English too.
People were able to speak French and German and other languages to make sure that everyone who came to the games had a good experience,” Powell added.
It’s important at all times to ensure you are hanging on to repeat business and building loyalty. But in a tougher climate, where new business may be harder to come by, this is even more the case.
One of the key reasons customers come back is not just price but the quality of the booking experience and the relationship they have with staff.
Again this all comes back to good training, argued Simon Pratten, managing director of consultancy service Transitions.
“Training enables people to stand back from the day-to-day routine and just think about what is happening to the business and what they need to focus on,” he said.
“You need to be looking at your existing customers, understanding their buying habits, why they are buying and what they are buying. People are no longer booking six months ahead, it’s much later, so the buying cycle is changing,” he added.
“Good training is about getting people to look at what sort of business they are offering and whether it is the right product or the right service.
“What makes people buy from a travel firm, and what is often taken for granted, is the way they are looked after,” he added.
A central element of The Co-operative Travel’s The Wow Factor programme is to recognise that, even if you are promoting a standardised approach, it needs to be tailored to the needs of the individual branch on the ground, said Golding.
This is particularly the case when agents are going back to a tough high-street environment where every sale can make a difference.
“It is looking at subjects such as closing the sale, offering good service and utilising our local knowledge,” Golding explained.
Another good reason for not cutting back on training is the motivational boost it can give to managers and agents alike, she said.
Leisure, hospitality and tourism historically has one of the highest staff turnover rates of any industry sector – around 30% according to Travel Weekly’s sister publication Personnel Today.
While in a downturn it might be assumed that people are more likely to hunker down and stay put, in fact one of the realities of a downturn is that people are more likely to jump ship because they are anxious about their job security.
So what can happen, if you’re not careful, is that the good people you want to keep end up walking out the door along with the ones you need to get rid of.
But offering training and development – in essence just showing you are committed to those hard at work at the sharp end – can make a big difference.
“It is a great motivational tool. There is no doubt that, when people get some training, they feel more motivated,” said Golding.
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