When I joined Nezasa in September 2022, my first action was to go and speak to as many of our customers as possible. I wanted to hear from them directly about their challenges bouncing back from the pandemic, their primary business goals for the year, and how Nezasa can better support them. So with a combination of many short-haul flights and video calls, I embarked on a listening tour of 30 customers in 60 days.
These meetings offered me an opportunity to quickly build relationships with our key customers and begin crafting a hypothesis about the Customer Experience department’s 2023 plan. But most importantly, this tour offered me a clear view of the challenges facing the leisure travel sector and how technology like TripBuilder and TripOptimizer has such an important role to play. Based on these conversations, I’ve landed on the most important challenges facing our industry today which I’ll share in a series of blog posts – here’s part 1.
Notes on Pandemic Recovery
Travel is clearly back. Many of our customers operated their Q4 tours at 85%+ of pre-pandemic levels, but consumer behaviour is not so similar to pre-pandemic patterns. In mid-2022, travellers waited until the last minute, only booking their trips 1-2 weeks before the departure date. This has now also normalised somewhat – our customers tell us travellers are booking around 2-3 months before departure, but the pre-pandemic 5-6 months before departure seems like it may take some time to return.
This rapid rebound has squeezed the supply of hotels and rental cars, drastically increasing prices. So while revenue is nearly back to pre-pandemic levels, travel costs are higher. This may be why in the European market, long-haul pandemic travel hotspots like the Dominican Republic or Mexico are already declining, and cheaper short-haul sun and beach destinations are back – travellers are staying closer to home to try to offset some of the price increases.
The way to push forward
With such rapid changes in the market, tour operators and travel agents that have embraced technology will fare far better. Agile yield management that can flex pricing and margin as supply and demand change will ensure higher competitiveness and booking conversion. Negotiated rate integration will almost always be better than generic bedbank supply. The same way that flight route optimisation is set to reduce the cost of the lowest margin items of a tour: flights.
Due to the rebounding demand, prices are much higher than before the pandemic, but if that is now combined with the current prices of fuel and the looming cost of living crisis, the big bounceback may be short-lived. Forward thinking tour operators are already curating cheaper and shorter tours closer to home, allowing travellers to save money while enjoying a holiday. For example, self-drive tours in destinations closer to home are increasing in popularity. Offering additional flexibility so that travellers can change their itinerary to stay, for instance, in cheaper hotels along their road trip route instead of the city centre, also helps address these potential headwinds.
Stay tuned for what’s to come
Welcome to “30 Customers in 60 Days”! Starting today, we’re following Alex Farmer, Nezasa’s CCO, around the world, to get the most insightful updates from our customers.
In this multi-part series, we’ll explore how travel brands are navigating their journey to increase digitalisation to grow their business with the help of Nezasa. You’ll read first-hand testimonials on the main challenges and how we’re partnering with our customers to overcome them.
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