Why Are Travel Businesses Outsourcing Their Business Processes?
Travel industry is one of the most dynamic and competitive industries in the world. It involves a lot of complex and time-consuming processes, such as travel booking, ticketing, customer service, accounting, marketing, and more. Managing these processes in house often becomes overwhelming for travel companies, which is why many are turning to outsourcing travel processes to stay competitive.
Why Are Travel Businesses Outsourcing Travel Processes?
Travel companies often find it challenging to handle all their operations in-house due to numerous factors, including:
- Availability of skilled resources: Certain business processes require the expertise of trained personnel to carry out duties in alignment with business needs.
- Limited bandwidth: Business processes require resources like time, money, and workforce to function.
- Domain knowledge expertise: Lack of domain expertise makes it cumbersome for the travel businesses at times to run the show, they need experts to do certain things, like for e.g. for issuing airline PNRs, you need to be well versed with IATA compliances and procedures.
- Excessive costs: In-house operations can be expensive, especially if they require specialized staff or equipment especially at regions like north America and Europe, where resources are very costly vs regions like Asia.
- Global market demands: The need to provide services across different time zones and languages can be better met through outsourcing.
- Scalability issues: It is easier to scale operations with an outsourcing partner during peak seasons or growth periods.
These factors drive travel companies to outsource certain processes to stay competitive and efficient in the dynamic travel industry.
What Travel Processes Can Be Outsourced?
- Reservation Management: This includes handling online and offline bookings, cancellations, modifications, confirmations, and payments for flights, hotels, car rentals, tours, and other travel products and services.
- Travel Customer Service: This involves providing 24/7 customer support via phone, email, chat, social media, and other channels. The service provider can answer queries, resolve issues, provide information, and ensure customer satisfaction and loyalty.
- Back-Office Support: This covers various administrative and operational tasks, such as data entry, data processing, data validation, invoicing, billing, reconciliation, reporting, and more.
- Marketing and Sales Support: This includes creating and executing marketing campaigns, generating leads, managing CRM, conducting market research, and increasing sales and revenue.
- Content Moderation: This involves reviewing and moderating user-generated content, such as reviews, ratings, photos, videos, and live streams, to ensure compliance with quality and safety standards.
- Technology Outsourcing: includes customer service, IT support, software development, and other back-office operations.
- Multichannel Communication Management: Managing various communication channels like calls, email, chat, and social media for seamless customer interaction
Why Outsource Travel Processes
Travel companies face intense competition and operational challenges, making outsourcing travel processes an effective strategy.
- Cost efficiency: Outsourcing can help travel companies save on staffing, infrastructure, technology, and other overhead expenses.
- Efficiency improvement: Outsourcing can help travel companies streamline and optimize their workflows, eliminate errors and redundancies, and enhance their productivity and performance. The service provider can also leverage the latest technology and tools, such as cloud computing, AI, automation, and analytics, to deliver faster and better results.
- Maximize output: By assigning tasks to a service provider that specializes and understands the business needs as per the travel business, they can drive more output and increase their overall productivity.
- Elevate customer experience: Outsourcing providers often have the expertise to provide stellar customer service, which is crucial in the travel industry.
- Increase business hours: With partners in different time zones, travel companies can offer services around the clock.
- Focus on core operations: with business processes outsourced, a travel firm can focus on their core operations and hence perform better overall in product development, business strategies, etc.
- Scalability and flexibility: Outsourcing can help travel companies adapt to the changing demands and trends in the travel industry, by allowing them to scale up or down their operations as needed. The service provider can also offer customized and tailored solutions based on the specific requirements and goals of the travel company.
- Regulatory compliance: Outsourcing firms can better handle the complexities of compliance with international regulations.
- Innovation: External providers can often bring in new ideas and innovative approaches to operations.
- Risk management: Outsourcing can help mitigate risks by sharing the responsibility with the external provider, especially in areas that are not the company’s core strength.
How to Successfully Outsource Travel Processes
To maximize the benefits of outsourcing travel processes, it’s essential to plan and execute effectively. Follow these steps for a successful outsourcing partnership:
- Define the scope and objectives: The first step is to identify the processes that need to be outsourced, and the expected outcomes and benefits. The travel company should also set clear and realistic expectations and communicate them to the service provider.
- Choose the service provider: The next step is to research and evaluate the potential service providers, based on their experience, expertise, reputation, quality, cost, and compatibility. The travel company should also conduct due diligence and check the references and testimonials of the service provider.
- Negotiate the contract: The third step is to negotiate and finalize the contract, which should include the scope, deliverables, timelines, milestones, service level agreements, key performance indicators, pricing, payment terms, and other terms and conditions. The contract should also specify the roles and responsibilities, communication channels, escalation procedures, and dispute resolution mechanisms.
- Transfer the processes: The fourth step is to transfer the processes to the service provider, which may involve training, documentation, testing, and migration. The travel company should also monitor and support the transition and ensure a smooth and seamless handover.
- Manage the relationship: The fifth step is to manage and maintain the relationship with the service provider, which involves regular communication, feedback, reporting, and review. The travel company should also track and measure the performance and results of the service provider and provide recognition and rewards for good work
Conclusion
Outsourcing travel processes can be a smart and strategic move for travel companies, as it can help them reduce costs, improve efficiency, focus on core competencies, enhance customer satisfaction, and achieve their business goals. However, outsourcing also requires careful planning, execution, and management, to ensure a successful and long-term partnership with the service provider.