Improving profitability through hotel bookings
How would you as a travel agency like to increase the profitability of your travel bookings by 50 per cent in 30 seconds? Of course you would. Ark Travel in Gävle are among those who have improved their profit margins by investing in hotel bookings.
Added value is a natural reflex throughout the sales profession. With one simple question you can convince the customer to buy a tie to a shirt or a Coca-Cola to a hot dog. Generally speaking that is, because it does not quite work that way in the travel sector, even if developments are heading in the right direction. This was the findings of a recent survey into Scandinavian travel agents conducted by Amadeus. The survey showed that only 3 out of 10 travel sellers ask the customer if they would like to book a hotel room as well.
“Unfortunately, travel sellers are traditionally very poor with regard to added value. The same procedure as last year is the order of the day in this sector. As long as a profit is being made there is no motive for developing sales and finding new sources of revenue,” says Thomas Ivarsson, Manager at Ark Travel in Gävle.
He and his colleagues are the exception to the rule. This can partly be explained by Ark Travel’s many government customers who are covered by a government framework agreement called FMLOG, through which government employees book hotels with their trips to a much greater extent than other customers. This has become a natural part of the procedures at Ark Travel’s Gävle office.
“Yes, our government customers have undoubtedly influenced our procedures, but we also work consciously on hotel bookings for our other customers, and it has paid off. It takes no longer than 30 seconds to ask the question and book a hotel. Those seconds improve the profitability of that trip by up to 50 per cent. We book nearly all our domestic hotels through the Amadeus system,” explains Thomas Ivarsson.
One great advantage according to Thomas Ivarsson is that the flight and hotel booking information go straight into the financial system together, which greatly simplifies invoicing.
The Amadeus GDS system now contains more than 75,000 hotel rooms throughout the world in a whole new hotel booking platform to be launched in February. The new platform greatly simplifies searching. According to Markus Pehrsson, Content Manager at Amadeus, business travel agents are showing an increased interest:
“More and more business travel agents are realising that they have to work night and day on improving their service in order to keep their customers. The entire sector is undergoing positive change and the best business travel agents have taken on a more consultative role. This is where hotel bookings come into the equation. Today one in five hotel bookings are made online, which is one of the main reasons that we are focusing on further developing the system.”
