As it is pointed out, the crisis is always an opportunity, and what is quite clear is a great opportunity for all countries, including most industries, to reset, organize development strategies, accelerate development, and above all accelerate digitalization.
The tourism sector has always been among the first industries to follow trends and all market demands, and it is quite certain that tourism will embrace this opportunity and further accelerate the process of digitalization in all spheres of tourism.
Travel agencies will be one of the leaders in the new digital evolution in the tourism industry. It was on this topic that I spoke with Ozren Bjelogrlić from Lemax, Croatian company that is a global player and has become a reputation when it comes to digitalization of travel agencies.
By the way, the company Lemax is a Croatian IT company founded in 1990 and is the initiator of the transformation and automation of the global tourism industry through a comprehensive software solution. They employ over 100 employees, and interestingly develop only one product, but which is globally competitive, and is intended for all business needs of travel agencies and tour operators. Today, Lemax is one of the world's leading software solutions in the travel industry (not only in Croatia, but in the world) that automates the business of 120 clients worldwide.
Precisely because of primarily global partners, I was interested in how travel agencies and tour operators are currently preparing for the day after the coronavirus, what is happening on the global stage and where they see an opportunity for new growth, when of course the global tourism market is activated.
When asked how the travel agencies reacted to the new situation, Bjelogrlić pointed out that one of the first and quickest reactions of travel agencies on a global level was the transfer of reservations to later dates or for 2021.
Thus, travel vouchers for travel agencies appeared, which ensured short-term security and the continuation of travel to travel agencies, as well as a certain security for customers to perform the service or refund. In particular, the traveler has the right to postpone the trip for 180 days, and if he decides to refund and does not want to use the previously paid and booked trip, after 180 days he receives a full refund. Most travel agencies in Europe have introduced tourist vouchers, but while in Croatia the deadline is 180 days in some European countries the deadline is up to 12 months.
The reason for this was that the agencies, in addition to the new booking and the inflow of any funds in complete delay, could not even get funds for already booked trips because the money has already been forwarded to others in the package chain such as airlines and hotels. this moment brought into even greater problems the travel agency i.e. certain doom. This is how a win-win situation was found through vouchers, both for travel agencies, hotels and other partners, as well as for travelers.
The same principle has been applied by travel agencies, except in Europe, and in the world all under the communication #dontcancelpostpone, but as Bjelogrlić points out, they are very worried that there are too many unknowns about travel options in the next few months, which greatly complicates any planning. “Travel agencies need to be conservative with operating costs as they have no revenue. A number of them decided to lay off their workers, and a number activated government measures. Since they are not actively working on reservations at the moment, they are researching what they can do at the moment, and for the vast majority it comes down to investing in marketing, improving the offer and researching technological solutions that can help them achieve operational savings and increase future sales."
The million kuna question that everyone is wondering, of course, is when the global tourism market will finally be activated. A question to which no one has an answer, yet the situation is becoming more stable day by day in most countries. “Appropriate security measures are increasingly being introduced to protect travelers and residents of tourist destinations from the possibility of coronavirus infection, thus increasing the likelihood of travel in the near future. Examples of this are agreements between EU members on the opening of passenger corridors, rapid testing at airports led by the leader of the aviation industry, Emirates, and investments in travel insurance. During the crisis, the importance of domestic guests and how much they will be able to contribute this season is increasingly mentioned. " Bjelogrlić points out.
When asked what the reaction of their clients is, what they expect and how much the current situation will affect the long-term business or survival of many small and medium-sized agencies, Bjelogrlic said that their clients, like most businesses, found themselves in an unenviable situation. enacted certain measures to help overcome the temporary period. “It is difficult to predict who will survive, but what the market tells us is that small entrepreneurs are in a state of "hibernation", or dormancy, and with such an approach can withstand more than medium-sized entrepreneurs. Enough of the announcement that states will help rescue large companies like big airlines or at least those that have found themselves in a dead end situation. In the whole story, medium-sized entrepreneurs could suffer the most because they are not able to put their business on hold, and the help itself may not be adequate. We at Lemax talk to clients from all continents and for now most of them do not take drastic measures . They understand that certain competitors will fail, giving them the opportunity for greater market share. The market will gradually return to normal and will need to meet all customer requirements. Our clients understand that they need to achieve operational success to meet new requirements, and they realize that they can only do so with technological advances and the digitalization of their processes. ”
What is certain is that the tourism sector, at least in the coming years, will certainly no longer be the same, and various changes will occur in the habits of tourists and the way they travel. According to Bjelogrlić, the focus will be on domestic travel. “Differences within the tourism sector will be visible in several different fields. A much greater focus will be on domestic travel compared to before and certain countries like France, USA, Spain will be able to take quite advantage of this as they are traditionally known for domestic travel. As already mentioned, certain large companies will receive strategic assistance, while medium-sized entrepreneurs could be in the biggest problem of survival. In addition, markets around the world will react differently to the exposure of a particular mode of transport, such as Australia or New Zealand, which can only be reached by plane. Given that Croatia is in a very favorable location within the EU, there may be a greater focus on shorter trips to the Adriatic by our closest neighbors. " says Bjelogrlić and adds that despite everything, tourism will recover and people will continue to travel. “According to a WTTO (World Travel & Tourism Council) survey, tourism creates 1 in 10 jobs and many other industries and communities around the world depend on it, so it is in everyone's interest for tourism to recover as soon as possible. " Bjelogrlić emphasizes.
Many travel agencies and tour operators still rely on manual labor or outdated technologies in conducting their business processes
It is certainly clear to everyone how the digitalisation of both the entire country and the entire tourism sector will now accelerate. It is in this field that Lemax has the most experience. Technology can and should certainly help tourism recover, Bjelogrlic believes, adding: "It is very questionable in what condition the company from the tourism sector will continue to operate when the economy and society return to normal. An increasing number of them are realizing that they will have to become more agile and significantly more operationally efficient. The digitalization of business processes has affected every industry, so tourism is no exception, and this crisis will be a catalyst for changes in technological terms that will enable them to be agile and better efficient. Those companies from the tourism sector that already have high technological awareness and implemented systems will be able to respond faster to market demands and a possible increase in business volume, given that a number of competitors will not be able to continue doing business.
Many travel agencies and tour operators still rely on manual work or outdated technologies in performing their business processes, Bjelogrlić emphasizes, and sees this crisis as an opportunity for accelerated digitalization of both the tourism sector and especially travel agencies.
"This significantly slows down their business and progress because they have the challenge to respond to customer requests in a timely and adequate manner. On the other hand, digitized travel agencies have much higher operational efficiency and a faster sales process. This is also an important advantage over the competition because travel companies that do not go through digitalization will not be able to remain competitive in the market in the future. ”
From the outside, it looks easy for the customer - in one place he can see the offer of content and travel packages and buy them immediately. Everything is stored in one digital place, it follows the whole process, it has direct communication with partners, while on the other hand the agency thus gets a lot more than is seen at first. The heart of digitization is in backend.
"Lemax enables the digital transformation of the business of tour operators and travel agencies through end-to-end integrated processes of automation of sales, marketing, operations and finance. In particular, Lemax enables travel agencies and tour operators to speed up and automate their sales process and to simultaneously monitor communication and activities with both customers and suppliers in a single system. An additional advantage of the system is that it provides improved opportunities for marketing activities (CRM), operations, finance and online sales through the use of B2B and B2C portals. This not only enables the modernization of the overall business of agencies and tour operators, but also increases their scalability in the market.”Concludes Bjelogrlić.
Cover photo: Markus Spiske, Pexels / Illustration: HrTurizam