How can travel SMEs compete with the big players?

How can small and medium enterprises in travel compete with the big players?

The SMEs from the travel industry face on a daily basis several challenges with human resources, efficiency and most important with their competition.

George Dumitru, wbe.travel’s CEO and Co-Founder presented some of the modern challenges that SMEs encounter and the potential solutions in overcoming them, using robust technology. The presentation was held during EMERCE Travel Conference in Amsterdam at the beginning of June.

 

The evolution of demand and the necessity of technology

About 15 years ago technology was mainly available to companies able to invest in software development and project management. In time more and more software companies developed products around market requirements and technology became a must and not a “nice to have”.

10 year ago wbe.travel launched the first version of its product series, after 2 years of great work, research, and dedication. Since then, we have assisted small and medium-sized companies into making relevant technology partner decisions with regards to Find, Select and Purchase activities.

 

The major challenges and common needs

Although most travel companies are somehow unique in the way they do business, they do share similar challenges. When preparing to invest in software development, travel SMEs tend to think first at their limited budget and resources. Moreover, the lack of IT knowledge can also be a barrier in deciding which software house is the perfect fit for their needs and for achieving their big dreams.

What we’ve discovered over the years is that all travel companies need to be efficient. To do that they have to invest in the automation of processes. To surpass the problem of the small or limited budget they need to find an affordable but feature-rich system. The consulting and the support, both technical and functional are at the top of the list when it comes to little or no IT knowledge.

But how can a travel SME overcome the challenges and fulfill the needs? The answer is pretty simple – using technology and more specific a cloud-based standard system with market core features. The cloud solution offers stability, security, rapidity and most important it gives 24/7 online access to real-time information.

Let’s dig a little deeper in finding out the common question of travel SMEs when it comes to travel technology.

 

1. Why should you choose a ready-made software solution instead of developing your own, that would best fit your requirements?

First, let’s think of the number one challenge – the budget. When building new software, you need to have in mind that the development needs an extensive budget and a long period of time. All IT developments require qualified, well-prepared resources, ideally with great knowledge in the industry. All IT buildouts have constantly technical challenges and the teams need to know how to handle them FAST. An experienced team can easily solve a technical issue in a clean, rapid manner.

Second focus would be on innovation and trends. The travel industry is constantly changing, the technology is ever evolving, shifting according to the market changes and requirements. In order for your business to be up to date, you will need a dedicated team for research and development. They would need to be present at all the travel technology shows, travel conferences, and events. This is a solution in which you avoid having a stagnant system but you invest a lot of time and efforts. So it takes us back to the initial challenge – the limited budget. A software house has a dedicated team to study the market changes and requirements and implement them in the existing systems, without altering the quality or the speed of the response.

Let’s not disregard the option of building your own system, because, besides the large financial and human resource investment it can also bring you some great advantages. Some of those are independence, flexibility and a tailored system with the best fit of functionalities, custom-made to your style of working. The only major risk would be that in the end, you could end up focusing more on technology than on travel services.

 

2. Why selecting a vendor management solution in the Cloud and not one installed onsite, on your servers and managed by your team?

The in-house hosting solution can bring you a great set of benefits such as independence, security as per your standards. Moreover, you can have a secured, controlled access to the environment by externals but you will also need additional budgets. Those sums will be allocated to human resources with a specific set of skills, to handle the technical processes of managing the in-house servers. In order to have a resource to handle the servers you will need first to acquire them so again we are going back to the first problem – the budget.

The investment doesn’t end here. You’ll need to think about the costs of relocating or changing the hosting provider. In the situation where you have an existing system built by a software house when you decide to make the movement for the hosting, keep in mind that the maintenance and the support will also require additional work from the building team side. Extra work transforms into extra charges.

Again, focusing more on infrastructure management can lead to a lack of attention to your business profile, the travel services.

 

3. Security comes in mind. If you choose a cloud-based license, how do you protect your data?

To be sure that you chose the right partner for technology you must go through a strict checklist to ensure your business safety, in the long run:

• The contract must specify data ownership and confidentiality
• Chose a vendor that has security protocols in place
• TRUST your selected Vendor’s data confidentiality
• Request backups and mirroring services
• Make sure you can download your data anytime from the system

 

4. If you choose to install a cloud-based license what would be the best setup for this option?

A shared environment can help you downgrade your costs. You share the environment with the other companies, you share the overall cost.

After the business evolves and when you want to share your API with your clients, you should consider moving to your own cloud. This is the way in which other travel companies can get integrated with your system and automatically be connected to your travel inventory. This will be the best time for you to get your own cloud distribution, so your activity stays the same and doesn’t affect the others.

 

5. Comparison is key. With so many similar software products on the market, how do you choose the right one?

When you’re trying to differentiate two or more options you should definitely make a checklist and analyze it:

• Cost vs functionality (value for money)
• Quality, reliability, speed of response
• Modern look and feel on UI (user interface)
• An open system in constant development
• Meet the Vendors team
• Include your team opinions in the evaluation process
• Select a modular system
• Don’t look for “all in one” platform
• Select flexibility in customizations
• Choose the right vendor for your business
  – Gather Vendor references
  – Ensure Vendor is able to support your growth
  – Trust your vendor

When beginning a new project trust is essential. Although we’ve listed it last the TRUST is one of the most important aspects, so start your new project only after you trust your partner.

When asked about what other criteria can help in the process of choosing the right provider, Mr. George Dumitru responded that reviews can be an additional useful tool of verifying the quality of services through the eyes of those who have used and tested it. But keep in mind that sometimes a positive review is there because the platform works very well for that particular travel business. This is not a guarantee that it will mould in the same way to your business model.

 

6. If you’re already using technology but you need an upgrade, how do you proceed?

Before everything you should ensure that the new technology can be easily integrated with the existing one. If your existing technology works very well for your business in some important aspects, you should keep it. Think of it as a base structure, where you add all the needed new layers.

So don’t focus on changing what is working. Try to see if you can complete it with other modules. Even for this you will need to work with multiple vendors.

It will be hard to find the software house to have all the products as desired. So try to be flexible and work with multiple software houses, to use each one for their strengths. This is the way to achieve the perfect ecosystem, tailored to your business needs.

 

Next steps

After you chose the solution, familiarize your team with the experience and make the most of it. Try taking it slow, with a step by step approach to ensure that all resources understand the workflow.

Keep in mind that the bookings and the sales  should be done by your team. Even the best platform in the world or the most expensive one will not guarantee you the bookings.

In dynamic, competitive environments, rates and content are crucial. So browse and select the right partner for content. Renegotiate the rates with your partners to have the needed competitive advantage. Add mark-up on top of those rates and distribute them on a larger scale.

Marketing is also important alongside the sales, that actually keep all the cash flow going. So invest in human resources, management tools, online advertising.

For more information do not hesitate to contact us at sales@wbe.travel