Over the past 5 years operators in the Travel Agency & Tour Services industry have been adjusting and restructuring their models. The introduction of online booking platforms like Webjet, Expedia, Skyscanner & TripAdvisor saw changes to the way things worked. The traditional agencies like Flight Centre & Helloworld who operated bricks and mortar models made key changes to their operations.
- Reducing commissions in order to stay competitive in the market
- Acquisition of online travel agencies to quickly adapt to this new way of business
- Establishing their own online sites to tap into new revenue streams
Covid-19 reversed any gain accrued by these efforts.
Hit hard by the pandemic, the travel industry is predicted to drop by 28.9% 20/21 according to IBIS analysts.
Flight Centre & Helloworld made significant adjustments to preserve cash – particularly impacting their workforce of thousands through redundancy, stand downs & reduced hours.
Flight Centre Travel Group (FLT) sold its Melbourne head office & suspended sales/marketing expenditure.
Helloworld renegotiated rents & implemented pay cuts for senior execs and board members.
Tough times will continue for this industry until we overcome the uncertainty of COVID-19.
However, as we progress towards developing a COVID-19 vaccine and take control of the situation, the industry is expected to recover from the effects of COVID-19 over the five years ahead.
As we see an easing of social distancing restrictions, and interstate and international borders open up, businesses are anticipated to strongly rebound.
It is believed that this pent up consumer demand will push industry revenue to grow at an annualised 11.5% over the five years through 2025-26, to total $9.2 billion.
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