5 minute read
Perspectives on current trends in the flight sector
Kit Sananwathananont
The peak year for the global travel trade was 2019. Records were being broken everywhere – sales, number of passengers, flight schedules. Therefore the COVID-19 pandemic stunned the unprepared industry. It was the utmost stress test. What began as a short travel break stretched into a long and painful rollercoaster ride with every outbreak of a new strain. Fortunately, the sector has proven its resilience and is now racing back to recovery.
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However, in the case of G.M. Tour & Travel (GM), a wholesale and corporate travel agency in Thailand, the situation has not been quite so serious as the company has managed to adapt throughout the COVID-19 pandemic with determined faith and since June 2022 has increased sales to pre-pandemic level. These are the critical trends that we see.
TRAVEL IS HERE TO STAY, WITH OR WITHOUT COVID
It is known that humans crave to explore and interact with each other physically, not through social distance or isolation. Accordingly, global tourism grew 60% in 2022 and is set to grow 30% in 2023, although it has yet to reach pre-pandemic levels. The Russia-Ukraine war and China’s zero-COVID restrictions are delaying recovery progress, particularly in markets such as Thailand, which received 11 million inbound tourists, 25% of whom were from China, in 2019.
KEY FACTORS DETERMINE THE TRAVEL RATE OF GROWTH
When cooperative destinations eased entry restrictions, GM saw bookings explode overnight. This was exacerbated by pent-up demand and the revival of group and religious travel, corporate events and leisure happenings like the FIFA World Cup. With it came higher ticket prices due to labour shortages, limited flight availability and inflation. GM anticipates continuous growth before a potential dip in demand in the second and third quarters of 2023. By then, everyone will have satisfied their travel desire, and there will also be increased consumer price elasticity in travel. Low-Cost Carriers (LCCs) are positioned to take advantage of this dip, as they already recorded 60% of 2022’s January to September passenger movement in Thailand.
TRAVEL BEHAVIOUR HAS BEEN TRANSFORMED
Businesses now allow working from home, leisure (business-leisure) trips and video calls for short meetings. In turn, when business travel does occur, those involved tend to stay longer and spend more. Technology continues to drive key innovations and shift more processes online – from search and booking tools, to keyless check-in and biometric gates.
Sustainability, ecotourism and climate change are beginning to influence trip decisions, and GM expects this trend to gain momentum. In the meantime, wellness, experiential and luxury travel are also set to increase their share of audience. Thailand faces challenges and opportunities in every topic mentioned.
THE TRAVEL TRADE HAS SURVIVED AND ADAPTED
Given the trends mentioned above, travel trade businesses have had to devise shortand long-term survival strategies. Some have adapted slightly, while others have completely reinvented themselves. Almost all were faced with the dilemma of when and how many layoffs were appropriate. There are travel agencies who are looking to exit business after their recuperation growth, and there are those that have simply closed shop due to the recession and drained resources. On the other hand, national airlines and hotel giants with strong finances affirmed have their commitment to flexibility, refundability, safety and cleanliness in the effort to retain trust. Today we are beginning to see how each strategy is panning out.
GM’S COVID STRATEGY WAS STICKING TO THE COMPANY’S CORE PILLARS
Our initial reaction to the pandemic was initially defensive. With massive refund orders flooding in, we had to devise ways to systematically process the travel tickets with the same manpower. As the refunds died down and no new ticket sales, GM then buckled down and operated business with no clear visibility. Obvious cost-cutting measures and work-from-home policies were put in place. As the long wait extended, we had time to concentrate on our core pillars.
Content
As a wholesaler, our customers come to us for competitive content and the latest product coverage. We have ensured that this expectation has been met by sourcing content through the travel trade’s latest channels, i.e., new Application Programming Interface (API) connections and New Distribution Capability (NDC) fare sourcing and servicing capabilities.
Service
With the hefty travel regulations for different countries and airlines, customers are flooded with information. GM’s job is to provide filtered, relevant information key to their travel plans. This has meant 300-400% more customer interactions with no revenue. Operations have run as normal for 365 days until now. Fortunately, GM staff have been willing to take pay cuts which allows GM to retain its manpower and skillset. This has been pivotal to our swift recovery.
Technology
Lack of visibility meant resource planning was less accurate. Shifting GM infrastructure entirely to cloud gave us the scalability and cost-cutting ability for the bumpy ride. This also provided added cyber security, compliance with personal data regulations and footing for long-term growth. Today, travel bookers can now search corporate, negotiated and flexible fares without complicated and costly implementation, and can choose to enjoy travel booking and support with our staff, 24/7.
By retaining our customers' trust and the backing of key airlines, GM is marching into 2023 with optimism and resilience for upcoming challenges. The company is ready to put COVID behind and tackle other significant issues such as sustainability, human rights and destination development.
Kit Sananwathananont, Managing Director
Contact details: Napapat Kiengsri Account Executive | Corporate Travel |G.M. Tour & Travel Co., Ltd. | Tel: +66 (0) 2838-1555 ext. 866 |napapat@gmtour.com |https://th.gmtour.com/
