Paul Davies Paul Davies

Be prepared for a downturn

Now is a good time for travel business owners to make sure they have the basics right and that they are prepared for any downturn in trade, says an accountant who specialises in the sector.

 

Paul Davies, director at TA Accounting, says that when people are making money reasonably easily and the economy is going well they can forget about the basics. ‘The good times may not feel like they are over, but people need to prepare for any kind of slow down now. I am not saying it is doom and gloom but nothing lasts forever. If a business is marginal it could easily turn into a loss situation if the right steps aren’t taken.’ Davies says travel business owners need to look internally at their own operations. ‘If you can’t do much about the market, look at becoming more efficient yourself. And that comes down to systems, systems and systems. ‘It’s going back to the basics, things like setting a budget, having productivity targets for staff and monitoring them regularly.’ He says the travel industry is one of the last sectors to feel a downturn because of the advance booking pattern. ‘In New Zealand there is also the factor of airfares being so cheap and highly competitive. ‘But regardless of how you are feeling, now is the time to refocus. Are you using the best phone system, booking system and accounting system? A lot of small businesses are not sure what to do and they are on systems that were developed 30 years ago. Converting to a smart system, written in the latest technology, can be 20% to 30% more efficient.’

 

Mobility the key
Being mobile is an important part of future proofing for travel business owners, says Paul Davies, of TA Accounting. ‘If bricks and mortar are not going to be so essential to the clients, then mobility is increasingly important. The GDS has to be mobile, the booking system and accounting systems have to be mobile.’ He says that agents relying on cheap airfares to stimulate business need to be aware that consumers are going to book direct and be increasingly online. ‘That’s not going to stop. So travel agents have to have something special. They have to look at packaging product as well as adding value and making it more personalised. ‘Clients want a no worries, no stress experience and look to agents to provide that.’

 

 

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