It doesn't pay to be bulky and slow in lean times. Uniglobe Travel Partners spent much of 2019 shedding some of its heft and may see its efforts pay off just as the travel industry rides out the initial wave of the Covid-19 pandemic.
Mount Arlington, N.J.-based Uniglobe, No. 44 on the 2020 Power List, is both a host agency and a direct seller of travel products to leisure and corporate clients. A member of the Uniglobe Travel International umbrella organization, Uniglobe Travel Partners recorded travel sales of $215.4 million in 2019 and ARC sales of $81.2 million.
According to CEO Marie Magliano, finding inefficiencies and removing nonworking parts is key to the company's success. An annual study refreshes workflows as the company adds new technology and eliminates redundancies.
"Actually, this year, we also included an in-depth analysis of margins by product category as well as where our expertise lies," Magliano said. "These results helped us make the proper decision regarding the sale of certain assets that were not compatible with our future vision."
Ideally, these moves improve efficiency, customer service and personnel training methods. Uniglobe Travel Partners relies on its mobile application to simplify the broad selection of third-party offerings for customers while continuously improving technology within its own operations. The company is in regular contact with European counterparts about New Distribution Capability and the use of new agency and client booking tools. Both cuts and enhanced technology strengthened Uniglobe Travel Partners' bottom line and increased its cash reserves for 2020.
That came in handy once the coronavirus appeared in the U.S.
"From an operational perspective, because we have the right processes and technology in place, we were able to handle the massive work of managing our clients cancellations, credits and refunds," Magliano said. "It was still a challenge because we'd simply never faced that type of workload, but we managed it well."
Meanwhile, a strong balance sheet bolstered by the reserves it built in 2019 helped Uniglobe Travel Partners assist suppliers, vendors and customers. With virtually no new revenue, the company can still focus on helping clients through what it views as a three-phase process. The industry is now mostly through Phase 1: handling the cancellations and flight changes.
"Obviously, some of that is still ongoing, and we're constantly checking supplier policies around credits and refunds to ensure that they have the flexibility they are entitled to," Magliano said.
Phase 2 will involve consulting with clients and determining what the new travel environment will look like. They'll have to work together on policy changes and communication with travelers as they prepare for Phase 3: When travel starts to ramp up again. That involves implementing new policy with constant review and adjustment to ensure its working for all the stakeholders. It also requires managing all the outstanding travel credits being applied to new trips.
"What became evident to us very early on was that this was going to have a dramatic change on the future of travel," Magliano said. "Corporate travel policies will change to account for a new set of criteria [to determine]if a trip should be taken, where it's permissible to go and how a traveler gets there."
For example, there will likely be a premium and a preference placed on nonstop flights that will impact policies around lowest logical fare. It will similarly impact airline pricing and possibly airline routes and business models.
"Companies are also going to have to deal with an increase in traveler anxiety, particularly in the first six to 12 months after the economy starts to open up," Magliano said.
Uniglobe Travel Partners will approach that future not only with new policies and strategies but with a new identity. Uniglobe Travel International decided to revamp the global brand and took Uniglobe Travel Partners' feedback on some of the upcoming changes.
The parent company wanted to emphasize its focus on innovation, professionalism and quality as the travel industry enters a period of uncertainty. However, the new branding still tries to convey the friendliness, caring and dependability that the company says its clients have come to love about the brand.
"Uniglobe's purpose moving forward is to continue to drive our client's success through better travel and an elevated service experience," said Chiyoko Kakino, vice president of marketing for Uniglobe Travel International.