Travel agency Konsortium Express and Tours, which specializes in train trips to Malaysia, has suddenly closed down. In a Be Aware posted on the door of all its workplaces, the company apologized for the unexpected closure, pronouncing it has long passed into an “economic disaster and will quit operation on all services with an instant effect.”
The office was shut on Thursday (Feb 22), and the door handles displayed a lock and chain.
Affected passengers need to file a claim with their travel coverage provider or approach the small claims tribunal the enterprise brought. “We are deeply apologetic for the unexpected closure, and we search for forgiveness,” said the notice, which has also been published on the company’s website. Konsortium’s license has when you consider that, been revoked, stated the Singapore Tourism Board (STB).
It suggested that affected clients who sold journey coverage before the closure technique their insurance carriers for help. “Consumers who aren’t protected with the aid of travel insurance can seek the assistance of the Consumers Association of Singapore (CASE) or the Small Claims Tribunal wherein appropriate,” STB brought. Other journey corporations were short of jumping into the void left because of Konsortium’s unexpected closure. A committee of the National Association of Travel Agents (NATAS) is rallying neighborhood shipping operators to take over affected bookings if important, stated STB.
Meanwhile, Chan Brothers Travel stated it might aim to assist affected customers.
“While unexpected enterprise closure isn’t always odd best to the tour enterprise, Chan Brothers Travel targets to help affected clients of Konsortium Express and Tours mitigate their losses and resume their travel plans,” the employer stated in an e-mail to the media. It brought that Chan Brothers Travel could be extending a “goodwill discount” of 10 according to cent off package deal excursions booked from now until Mar four for affected clients.
The last decade has seen major changes in the travel distribution landscape. First, the Internet started a revolution and forever changed how the travel industry operates. This online boom, followed by a subsequent economic slowdown, has created new dynamics in travel distribution. The proliferation of smartphones and social media has further created chaos and new opportunities. While opening up new avenues for growth, these developments have created new operational challenges.
Challenges faced by the travel distribution industry
Dynamic Demand
One key nature of the travel industry is that the travel demand is highly seasonal and cyclic. This challenges any operations manager regarding capacity planning and right-sizing of the IT support infrastructure. Planning for peak size can result in underutilization and lead to higher marginal costs. On the other hand, not planning for peak load runs the risk of lost transaction opportunities, unsatisfied customers, and business losses. This is one of the primary reasons most travel distribution players have higher IT infrastructure costs and lower operating margins.
Increased Search Volume
Increased travel portals and a changing pattern of travelers’ booking behavior have resulted in a huge surge in the ‘look to book’ ratio. This increased number of availability requests per booking now runs into thousands from a mere single-digit number a few years back, putting enormous pressure on existing IT infrastructure. According to Pegasus Solutions, the global processor of hotel transactions through the GDS and ADS channels, the look-to-book ratio soared to around +60% over 2009 and is expected to rise further. Today’s common look-to-book ratio is almost 2,500 -3,000 to 1 -primarily due to a growth of online reservations and the changing consumer behavior of those looking for ‘value for money’ deals. Travel shoppers use multiple avenues, such as search engines, referral sites, websites, mobile applications, and social media.
Business Disruptions
Before the recession, online travel booking soared to all-time highs, attracting further IT infrastructure investments in anticipation of demand. However, discretionary travel was one of the first expenditures cut down during the slowdown. This caused a severe strain on financials, and travel companies had to rethink their models.
Increase in the number of sales channels.
The popularity of smartphones has persuaded travel players to embrace mobility as a medium to manage bookings and provide other experiences to increase customer stickiness. Simultaneously, social media sites have also become very popular, and travel portals are trying to utilize this trend by integrating different social media components with their sites. Of course, the number of channels also increases complexities in product management.
Cloud computing from a travel distribution perspective
The cloud helps enterprises have a dynamically scalable abstracted computing infrastructure available on a demand and pay-per-use basis. This model saves the IT teams from investing heavily in infrastructure and shields them from the intricacies involved in infrastructure setup and management. Besides providing the on-demand IT infrastructure, cloud service providers typically provide interfaces for related IT management services. To understand cloud computing applications in the travel industry, availability searching or shopping is probably the best example; it is the biggest resource for consumers in a typical travel process. In today’s circumstances, travel enterprises that run their entire travel application on a single infrastructure platform put unnecessary stress on operational budgets.
One of the probable solutions to this problem is to decouple the availability search functionality from the traditional CRS system and transfer it to an infrastructure that can support flexible demand. It seems a complex and upheaval task at the onset, creating operational challenges such as latency. However, these challenges can be handled through a cloud-based solution that offers higher scalability using modern architecture patterns. On the other hand, mobility is witnessing unprecedented growth in demand – another area where a cloud strategy can bring in competitive advantages for travel organizations. The key challenges that travel enterprises face today regarding mobile and social media channels are manifold, viz.,
- With the advancements in mobile devices such as iPhone, iPad, Android, Symbian, and Blackberry, travel enterprises need to invest in leveraging these to further their distribution and fulfillment channels.
- As a rapidly evolving technology, mobility is difficult to predict in terms of short-term and long-term demand. Due to this, travel enterprises face a challenge in scoping the required infrastructure for supporting mobility channels.
- Travel enterprises need to create a business model that measures the increase in revenue and profit against the costs incurred on mobility and social media investments.
