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As governments call time on coronavirus and wind down financial aid for furloughed workers, the jobs market is set to become flooded with corporate travel consultants and account managers.
As a result, industry observers predict a new type of so-called “micro agency” will appear — independent consultancies formed by laid-off corporate travel agency staff. They’ll embrace the work-from-home model, be well connected, and well placed to cater to those corporates downsizing their own travel programs.
“Micro agencies would be able to choose from a whole pool of talented staff to create their dream team,” said Judith Heinrich, managing director at Travelicity Consulting. “As long as they can offer relevant duty of care and technology products, there are no obstacles for this to move forward, especially since the independent consultant model is popular in the U.S.”
In the travel industry, relationships count, and many will have been cemented or strained during the crisis.
“Small and medium companies in the first instance have a relationship with their dedicated agent, and not necessarily with the travel management company they work for,” Heinrich added. “Moving forward, having personal contact that you can trust and the reassurance to be able to speak to a dedicated agent will be key, so I see more micro agencies emerging.”
The start of the pandemic proved the value of a corporate travel agency. Initially there was repatriation, followed by efforts to retrieve refunds from airlines — admittedly with varying degrees of success.
“How agencies have handled the existing challenges will drive the decision which way small and medium-sized companies are going forward in future,” said Heinrich. “It has certainly seen a blow for online agents that were not set up for the huge amount of personal interaction that is required.”
One franchise business, which was highly successful in its battle with airlines to collect customers’ cash, now expects a surge in recruitment.
“I feel we’re uniquely placed to come out in a strong position the other side of this,” Kieran Hartwell, managing director, corporate at Travel Counsellors, told Skift “A lot of talented frontline individuals, with a lot of sector expertise, may use this as an opportunity to reinvent themselves, and run their own business.”
Travel Counsellors has 1,900 independent travel business owners, including 800 corporate travel specialists, and Hartwell said they are already using the company’s infrastructure to create their own micro travel management companies.
“Lots of them work together in partnerships, and some are set up as limited companies that are hiring people in their own right. They’re looking after customers that place a high value on service, and personalization, and often have layers of complexity, for example specialize in oil and gas,” he added.
“It’s an entrepreneurial blank space — we provide a platform, brand, technology and marketing. The counsellors go out themselves and manage the relationship personally.”
He said the corporate travel business represents 35 percent of total turnover of the company, and up until March was growing at a rate of 20 percent year-on-year.
One investment banker, who wished to remain anonymous, told Skift the likes of Travel Counsellors stand to do well out of the current crisis.
“I really like the business model. All of their counsellors are effectively self employed, so they run their own book, and there are very little marketing costs,” they said. “In terms of Travel Counsellors’ own cash funding, Vitruvian are a big private equity house. You’d like to think that, in the same way as Cetares with American Express Global Business Travel, it will take the view that [travel] is going to come back.”
Another driver of new business will, unfortunately, likely come from corporates looking for new agencies due to a nervousness over their agency’s chances of survival.
“There will be a shift of customer accounts,” the investment banker added. “If the smaller agencies start struggling, there are going to be accounts looking for a new home.”
One major travel agency chain in the UK, Hays Travel, is currently on the lookout to acquire struggling businesses.
Another trend in the favour of the micro agency is the need for a personal touch to reassure employees it’s safe to travel again.
“Yes, people are shifting towards low-touch, online solutions,” Travel Counsellors’ Hartwell said. “But I would counter that organizations, regardless of size, will place a value on personal service, duty of care and knowledge, given the fact some of them will have had bad experiences dealing with online travel agents, or airlines directly, during the crisis.
“Having someone navigate that complexity for you will be more valuable coming out the other side of this.”
It’s not going to be all smooth sailing, however, as many corporates still select their agency partner based on technology. “In the small to medium-sized company space, there is the challenge of being aware of safety needs for their employees, as much as there is for their employees at larger counterparts,” Hartwell said.
“It’s about finding the ability to implement the appropriate technology solutions to support that. So duty of care, and traveler tracking, that a large multinational corporation would have in place to help monitor employees … we’re looking at ways we can provide those types of solutions to mirror that for smaller corporates.”
Many corporates will put an emphasis on using risk consultancies and International SOS told Skift it was exploring ways to ensure its travel preparedness, medical and security services technology was available to organizations of all sizes.
“There are many add-on tools available through us,” said Matthew Bradley, regional security director, Americas. “However some may not be available due to the size of the organization inquiring and potential administrative parameters. However, we are always innovating and working out solutions to help as many organizations as possible fulfil their duty of care needs.”
The future remains uncertain. In the UK, a recent poll revealed travel and hospitality businesses in the UK fear they will have to lay off up to 60 percent of their staff if a strict 14-day quarantine is introduced.
But for those consultants that, due to coronavirus, suddenly find themselves looking for their next challenge, there may be opportunities ahead — if they’re ready to think small, not big.