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May 20, 2022

Direct booking could make small offline tour operators redundant in the future

In recent years many tourism companies such as British Airways, IHG Hotels & Resorts and National Express have introduced attractive schemes to drive direct bookings.

By Globaldata Travel and Tourism

Direct booking is the most user-friendly method in the digital age, where one can easily book travel services directly via an online portal, smartphone app or a short phone call. Due to these technological developments many small offline tour operators are becoming redundant, particularly in more developed countries where online adoption is high.

Direct booking is more popular

Consumers are booking directly with the service providers like airlines, hotels, transport and tours. Over many years, these services have become ever more present online, making it more convenient and efficient for customers to book directly rather than traveling to an offline tour operator store or travel agent. In recent years many tourism companies such as British Airways, IHG Hotels & Resorts and National Express have introduced attractive schemes to drive direct bookings. These include enhanced loyalty programs, complementary services and lowest price guarantees. According to a Q4 2021 GlobalData Consumer Survey, when asked “Which of the following did you use the last time you booked a holiday?” 28% of global respondents said they book directly and only 7% respondents said that they booked a holiday “In-store face-to-face with a travel agent”. This shows there is a growing dependency on direct booking by various means such as online portal, smartphone app or a phone call.

Offline tour operators must adapt to the online trend

According to GlobalData’s Macroeconomic data, there were 4.9 billion of internet users in the world in 2021 which was up by 6.5% from 4.6 billion in 2020 and is expected to increase 6.1% by the end of 2022, reaching up to 5.2 billion. This necessitates the presence of offline business to establish or extend their online presence.

Many travel operators who do not have knowledge of getting online or are just more reluctant to do so, have been facing low sales growth. These companies should hire an IT specialist or contact the IT service provider to help them take their business online. This would help in improving their company’s image and also reduce the operational cost as providing online services will reduce the need for more customer service staff. The internet will also allow them to showcase their travel products without the need for sales support teams, cutting back on salaries and commission payments.

Offline tour operators need to act fast

Due to the growing middle class in countries like India and China, the demand for tourism related products has been increasing, as they have more disposable income to travel. Similarly, the increasing number of internet users in these countries also suggests the dependency on online service providers will grow. These factors show that the offline tour operators must act fast to move with the trend and to make sure their businesses survive in the not-too-distant future.

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