Reality Training’s Bob Morrell outlines the major issues facing the industry and how companies can overcome them
Travel Weekly has run several stories recently on inflation affecting the UK’s desire to travel and the decline in activity in travel due to the cost-of-living crisis.
The news is worrying, and rightly so. We’re hearing about £5k bills for energy, inflation at 18+% and interest rates going up to 7-8% to keep it down.
Most of us have no memory of rates at this level, and if you do, it was unlikely to be positive. Most of us have low borrowing and mortgage interest rates which for years has allowed us to find money for holidays.
The travel industry has been thrown into a busy summer without the staff or resources to keep up with demand all while the entire economy is suffering from rocketing inflationary pressures and we have the effects of a war in Europe, the realignment of the world after Covid, and the reality the UK faces as a country that is no longer within the EU.
Over 1.5 million people over 50 have left the jobs market forever. Where’s the experience to replace that? Where are your best-sellers now?
Where is the knowledge and experience you need? How can we possibly afford the level of talent we need when they will demand 10% more money?
To meet our demand for travel we need new, good people. Not just new people. We need good quality communicators and salespeople.
An enthusiastic apprentice is wonderful, but they are years off their potential. A new team of average communicators will never match the performance of one or two great communicators. How do we find them, and afford them?
When you drill down into the main hurdles the industry has to overcome, the size of the task that lies ahead becomes apparent.
Brexit
There is proportionally very little media coverage devoted to this. So, let’s just speak from personal experience. Our removal of simple travel conditions and rules on passports (a UK choice btw) and our positioning as a country outside the EU, means we will face travel issues, occasionally, when going to Europe.
At the least, maybe a brief wait at Passport Control, at worst, the delaying and cancelling of flights and crossings because airlines and airports etc. cannot cope with the demand from a travel-mad population, whilst they try and catch-up after the pandemic, and are struggling to recruit staff and deliver the right level of service.
I’ve twice been severely delayed at Gatwick recently simply because there was no-one to drive the buses to take us to the planes. So, in order to avoid this, we get in our cars, as I have for 3 years now, and drive on holiday, reducing reliance on travel expertise. The true fall-out of this choice is now being felt and until a better deal is done it won’t improve much.
Desire to Travel
For me, of the many things we have freely allowed ourselves to give up, the ability to travel, live and work across Europe is one of the biggest. How often do you go on holiday and think, ‘I wonder how much it costs to buy a house here?’ or ‘Wouldn’t it be lovely to retire here?’ That desire, to live for some, or all of a year, in a warmer climate like Spain or Greece, has now been shot in the foot.
Ninety days in any 180 day period is now a maximum stay for non-residents in EU countries. This realisation is flooding the market with rentals and property sales because that dream that was freely available, for so many people in the UK, no longer exists.
This change will also affect our desire to explore and travel in Europe. The Brexit stated aim that our vibrant economy meant we would easily be able to travel to other places beyond Europe, did not take into account a pandemic or a cost of living crisis, so for many, Europe will still be the best holiday option we have. We still want to travel, but we’ve been left with a few less economic motivators and options to do so.
Energy and inflation
Our bills are rocketing and as they do so will mortgage interest rates to try and stop us spending, and this will mean every household, virtually, will have to reconsider their spending. If I allocated £5k per year for holidays before, I won’t be doing that now.
If I ate in a restaurant, or went to the theatre or the cinema, or if I indulged in shopping for clothes and technology, all of those things will now be re-assessed against lower wages, higher prices and energy bills that will soon rival mortgage payments. Plus, we watch as our EU neighbours cap their increases for energy at 4%, whilst our go through the roof. Incidentally, whilst it would be easy to be political here, I don’t need to be, these are the facts.
None of this means we won’t travel of course. We will simply need to shift our spending patterns. If we have an income, then we will look at that against outgoings, make savings where we can, and try and work out where we can find that money for holidays, and luxuries, the things that make life worth living.
How to react?
As a salesperson or travel agent, whilst facing all of these issues ourselves, we must also create a positive level of confidence for our customers. Many of us must think of ourselves as financial advisors to customers as we suggest ways to help them afford and pay for their trips. In the end, that’s their choice, how they do it.
Our job is to understand that if they’re interested in travel, then that’s a hugely valuable enquiry. They wouldn’t be enquiring if they hadn’t worked out how they could afford their trip, even if it’s on the back of a fag packet. Our job is not to make it cheaper for them – but to make it valuable to them, so that the investment they’ve decided to make is repaid with the outcome they want.
We are currently working with a major travel brand on their marketing and sales processes, and other retailers in other markets who recognise that importance of converting a higher percentage of their enquiries. This is really the secret for all businesses in tougher times.
If your conversion rate is 25%-30% currently, then without any changes, I guarantee that it will soon drop to a sub 20% figure. Plus, you’ll be getting fewer enquiries anyway. What strategies can you employ, without cutting prices, that will increase that conversion rate? How could you raise it to 40% +? What does that rate need to be for the next 2 years to see you through this (hopefully) temporary inflationary period?
If you’ve never used a training company, that’s your choice – so how confident are you that your people, can increase conversion enough? If you won’t use a training company then please make a note of this, my biggest tip: follow up. The Achilles heel of travel.
If you’re not effectively following up your quotes and proposals then you’re adversely affecting your conversion. For the next two years it will be far less about what you are selling – it will be more about how you are selling it.