The Case for Bricks-and-Mortar in Travel Retail
Since the end of the 50s, the commercialisation of mass air travel opened the doors to an ever-growing travel retail sector. The market has lived through many shifts, but none quite as disruptive as the online revolution that’s happening now.
A handful of online travel agents or OTAs, aggregators (comparison sites) and mobile apps increasingly dominate the travel retail scene leaving little breathing room for traditional bricks-and-mortar venues. The online market continues to grow, and acquisition in the market is at a high. More and more travel agents now work remotely, as an increasing number of bricks-and-mortar venues are being replaced by host agencies who support home based agents.
The emergence of OTAs such as Expedia two decades ago, placed consumers at the heart of the supply chain—which prior to the digital shift they were at the end of. Needless to say, bricks-and-mortar was displaced, and its relevancy in turn became questionable.
Consumers’ draw to online sites is foremost the promise of getting a good deal, followed by the convenience and speed of comparing flights and accommodation. Online agents initially took off with a millennial audience, who appreciated the convenience, speed, and ownership of planning their own trips and taking it into their own hands to find a good deal.
Yet, it seems that bricks-and-mortar still stands a strong chance. Consumer dissatisfaction from hidden fees on online sites and their inability to offer high quality service or cement a relationship of trust has put bricks-and-mortar back on the map at least for now.
Online travel giants might have lost their shine with consumers who have come to the realisation that searching through multiple sites is too time consuming, and find their inability to personalise search results or offer specialist information frustrating. You only have to scroll through these online titans’ Facebook pages to see that customers are less than happy with the service they receive. Reliability and service are obstacles that the online market would have to overcome if they were to completely take over travel retail.
Bricks-and-mortar would not survive without an online presence without doubt, but they could gain an upper hand on OTAs whose biggest selling point is cost so far, rather than experience or quality of service.
Online shouldn’t be ruled out, but instead embraced. The potential for online booking is huge, while it means that traditional retailers go head-to-head with online travel titans who currently command the scene.
Online shouldn’t be ruled out, but instead embraced.
Specialisation could be one route to survival for bricks-and-mortar travel retailers amidst the digital shift. This could take the form of specialised teams or packages that cater to particular audiences and events, such as cruise or graduation trips. Leveraging a traditional retailers’ offline experience and in-person relationships alongside specialisation is key—widening its appeal to a variety of audiences across both physical and digital platforms.
Differentiation is yet another route. Travel agents can do what online sites can’t—offering an exceptional service, experience and an ability to tailor holidays to individuals. More often than not when booking online, hidden costs become clear only at checkout after a time consuming series of searches. Agents have the ability to hand-pick excursions and add-ons tailored to each individual, the cost of which when compared to hefty hidden fees on online sites become inconsequential in comparison. More importantly, the fact that consumers can rely on bricks-and-mortar agents even when unforeseen occasions arise should be capitalised on.
Targeting niche sectors could also prove rewarding. Perhaps the bricks-and-mortar retailers that have survived thus far are still around because they already cater to niche markets, but there are always emerging niches that present new opportunities for new products. For example, both physical and online retailers have found a niche for religious breaks in the past decade and more recently in adventure holidays. If a traditional agent could cater to a niche that generates enough traction to prosper, but not so much as to attract competition from big players, then they would succeed in providing consumers with a unique and differentiated offering.
If bricks-and-mortar travel agents want to survive the digital revolution, they should differentiate and specialise. Most importantly, their tactics should be underpinned by a celebration of their rich experience and quality of service. Far from neglecting their online presence, they should embrace online and digital platforms which equip them with not only the technology to compete with online retailers, but also reach new audiences in a changing landscape.