How to compete in 2011 and beyond

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Brian TanBy all indicators, 2011 is going to be another year of solid bookings growth for the travel industry. I'm optimistic that travel agents will do well this year if they know how and where to compete in this ever-changing environment.

The competitive landscape is more complex than ever. That is especially true online, where consumers face choices and tools ranging from Expedia to Kayak, hotels' social-media specials and private-sale sites like Jetsetter, which are getting significant traction for discounted hotel deals.

Perhaps surprisingly, this growing complexity is actually creating an opportunity for travel agents that we haven't seen in more than a decade, for one simple reason: Consumers are confused by the array of choices.

According to a recent report from Forrester Research, the number of travelers who expressed interest in using a good travel agent jumped to 28% last year, compared with 23% in 2008.

Still, let's be clear: Online solutions are very good for certain segments of the market: for example, those taking simple trips (such as flights and a hotel for just a single city), or budget travel where the traveler is inclined to scour sites for the lowest price.

It's tough for a travel agent to compete in such markets. To achieve long-term success and viability, travel agents need to pick their battles -- which is to say, their markets -- carefully. They need to change the playing field. And they can.

Instead of trying to compete head-to-head with Expedia and other online DIY sites, agents should instead choose markets where the OTAs cannot compete with them. Here are the characteristics of such market segments:

• Trips that involve complexity (e.g., longer international trips) or complex decisions (e.g., cruises). Clients who try to use a self-service website for such trips waste a lot of time and incur headaches.

• Luxury trips. This is the segment that has more money than time and thus values the personalized service of a travel professional.

I like to cite the analogy of what has happened in the tax preparation market. For people with simple financial responsibilities (i.e., no mortgages, few investments, etc.), a DIY program such as TurboTax is an excellent, convenient solution. For those with a more complex financial portfolio or, say, high-net-worth individuals who would rather not spend the time, a certified public accountant is the answer.

The CPA is an expert who can diligently keep up with the latest tax laws and effectively and accurately deliver quality service in a timely manner. Because there will always be variances among complex financial portfolios, there will always be a demand for CPA services, no matter how many features TurboTax adds to its software.

Much like the demand for capable, trusted CPAs, there will also always be a demand for trusted travel agents. In fact, that demand might be increasing as more luxury travelers begin to place a premium on unique travel experiences.

In short, to do well, agents will need to provide what Expedia and other online sites cannot. This breaks down into three areas of service expertise:

• Personalized service. The ability to effectively know the client's preferences and accurately provide recommendations on travel experiences that are uniquely suited to that client. If you can convincingly help clients sort through all the noise of the thousands of choices available online, you've clearly differentiated yourself.

• Deep, specialized knowledge. Having expert knowledge about destinations or types of activities; knowing the best itineraries and unique authentic experiences; and being able to offer special, exclusive or VIP activities. Become a specialist, not a generalist trying to sell 50 different destinations.

• Excellent communication and relationship-building skills. While the above two points are crucial, to sell an emotional product like travel, it's ultimately all about communicating the value that you're bringing (always in a timely fashion, of course) and building that warm, fuzzy client relationship. Too often I see knowledgeable agents who lack these skills and lose the sale.

Additionally, you'll need to deliver good value.

Ever since the downturn, clients not only demand this but expect it. While it's not realistic to provide the lowest price on, say, hotels, you should always have a pulse on the market to get competitive rates. Either you or your inbound operator or wholesaler needs to have a good relationship with hotels so when there are special rates available (say, on a private sale site like Jetsetter), you, too, can have access to those rates.

On the other hand, it would be ineffective to position yourself as a source for deals. You simply cannot compete against all the online options. And, more importantly, it cheapens your brand as a professional who provides personalized service. I've seen too many travel agent websites that advertise deals and bargains, often with big flashing banners, sending the message that these agents are about selling low-priced deals (just like online self-service sites) rather than about expert personalized service.

Choose your markets wisely and provide personalized service at a good value. Focus on these strategies and skills, and you'll be well positioned to compete in 2011 and beyond.

Of course, this being 2011, you'll also need to have a good website and social media presence, but those are topics for another day.

Brian Tan, who holds a master's degree in electrical engineering and computer science from the Massachusetts Institute of Technology, is the founder and CEO of Zicasso.com, a luxury travel referral site that connects discerning travelers with the industry's top travel specialists.

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