Travel Agencies: Evolving to Survive

The rise of the Internet as a means of organizing and booking travel is generating headaches for companies in the sector, which agree that the strategy should be to focus on marketing complete packages in very specific market niches.

Thursday, January 16, 2020

The difficult financial situation that the agency Viajes Colon is going through in Costa Rica is just one example of the problems that have affected travel agencies for several years.

As a result of the fall in its income, Viajes Colón has been making an adjustment to its operations since the second half of 2019. The measures include obtaining funds, through the sale of part of its assets, to cover its tax debts, outstanding contributions to the Costa Rican Social Security Fund (CCSS) and delays in the payment of last year's Christmas bonuses.

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This situation is reported shortly after the closure of Destinos TV, which was announced by the firm in mid-May 2019, when a bankruptcy petition was filed with the San José Bankruptcy Court.

Decades ago the business model was profitable with the sale of airline tickets, however, that has changed. Regarding current trends, Rónald Álvarez, explained to that "... on a global scale, if you look in magazines and news at an international level, in the East and Europe many people go back to the agencies. There was a sort of 'I do it alone' trend and now it has been reversed."

According to Federico Solano, marketing director of Horizontes, the situation is "... difficult because the traditional value chain (travel agency, wholesalers, hotel and other services) has changed, now with online platforms direct business is done and customers themselves come to them. But the vision of adapting to the market is what keeps you going."

There is a market niche, which is a large percentage of tourists, who require the services of a specialist to put together their trips, says Solano.

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