Travel firms will emerge from the COVID-19 crisis smaller but more creative and leaner than they went in, Steve Endacott of Rebound Consulting told an international online conference yesterday.
Speaking in a panel session on the impact on travel in Europe, Endacott, who set up the consultancy with former MyTravel colleagues Seamus Conlon and Will Waggott to offer advice to travel firms, said companies will need to adopt a start-up mentality.
Endacott said with many firms in hibernation having taken advantage of the UK’s furlough scheme and government-backed loans, the danger for many is going bust when trading starts again.
“In a time when you’re not trading there’s lots of reasons not to go bust. But as soon as you start trading again, those hotels you haven’t paid have to be paid, you need to pay those advertising companies like Google.
“So, basically, no company can afford to not come out of this leaner, to come out the same size that they went in. They got to be meaner, smaller, nastier and more creative. It’s basically a re-set it’s ground zero.
“You need to start up mentality to say what are the opportunities and how do we make our businesses as flexible as possible, because there’s further disruption to come.”
Endacott said all travel companies throughout Europe are facing the same situation as the lockdown continues but that those companies that were struggling beforehand are being exposed the most. Where people were short of cash, they’re running out of cash quicker.
“You don’t see who’s not wearing swimming trunks until the tide goes out and the tide has well and truly gone out and we’re starting to see who didn’t have any swimming trunks on.
“Now is a time when you’ve got to preserve what you can, but there were lots of things going wrong already in the industry before this crisis. We saw Thomas Cook fail last year and we saw lots of businesses who were struggling already.
“We’re operating quite an old fashioned model in a digital environment and that problem has just been accelerated and I think it’s time to take stock and come out all guns blazing, but smaller nimbler more automated, and not fat. The worst thing you can possibly be at this stage is obese.”
“The key thing you need is brand, because it all comes down to who’s got the lowest cost of customer acquisition. If you have to go back to Google and start again, you’re dead.”
Andy Owen-Jones, co-founder and chief executive of dnata Travel-owned bd4trave, said he expects to a change in the model of travel companies who will have to take more control of their inventory, curate offers for customers and move away from “pile it high” strategies.
“A lot of people have followed a model of taking all the inventory they possibly can, from whatever channel they possibly can, and then presenting it to the customer,” he said.
“And I think being in control of what inventory you have, understanding what’s there, and being able to push things in the right way, no longer just for margin but also for safety and for availability is going to become much more important than it was.
“A lot of websites are not really structured to do that very effectively, and I think what we need to do is move away from showing everything to everyone, and have a much more real time ability to take product and put it in front of the right person and that means a bit of a different approach.
“So instead of a shop windowing everything we need to really understand what the customer demand is, and then also work out what’s available but do that in real time. Timescales have to be much shorter you can’t contract for a season.
“You’ve got to have not just real time availability, but real time knowledge of what’s going on, and that means a different skill set, a different type of person who is going to operate in this. It’s not just people who can get great contracts for a season, it’s people who’ve got real time understanding of what’s going on in the destination and are able to feed that through.
“Hotel purchasing is going to need a different attitude and a different mindset as well as a different technology.”
Owen-Jones said firms will have to rebuild their brands based on storytelling offering curated content that has been tailored to the needs of the customer.
“The classic reaction to a crisis is either fight or flight, but actually the third reaction that humans have that we never talked about is telling stories. We make sense of the world by telling stories.
“And I think what you’ve seen over the last few years with companies like Secret Escapes or Holiday Pirates is people curating content and telling you a great story about it.
“Instead of just showing people things and getting them to filter we have to make a persuasive case of why a destination is good now. The quality of our storytelling and the precision of our storytelling is going to be much more important and that’s not really been a feature of most online travel sites, and it’s going to have to become much more so.”