Time is our most valuable currency. Modern distribution giving the traveler or travelbooker additional ways to feel good about their purchase. It’s providing options, offering things at the right time, and catering to preferences. Our research shows travelers think this is what makes the buying experience meaningful, modern, and something they want to return to.

LEAN is a science with its origins in the automotive industry. It is a structure based on being able to provide your customers with better service, increase the quality of your employees’ work, and create opportunities for increased productivity (and less inventory). There is already a wealth of knowledge available on the subject, but not much from the travel industry. AMM Consulting has the toolbox and can make it available to you.

A future structure (LEAN) embedded in traveldistribution (but also in any service organisation public or private) entails:

• Changing employees’ way of thinking and acting and creating a better working environment.
• Increasing time with customers and reducing the number of personal contacts per trip.
• Increasing the possibility of selling extra products and documenting this.
• Increasing quality and transparency in each transaction.
• Increasing the number of transactions per hour.
• Creating standardization in the process, transparency, and knowledge sharing.

Of course, your customers use online to search, book, or simply compare. However, in a post-corona time, there are many more conversations due to strikes, delays, new Covid19 guidelines. In addition, there are complicated journeys with multiple destinations and tight control with many elements. It is possible that these only make up 10-20% of your total trips, but they are often the ones that allow for high earnings. Therefore, it is important to ensure high quality (time) and utilization of expensive employee knowledge.

Background The reason for the necessary changes began in 1992 when a project group was established. Their introduction to LEAN began with this film (here) (28 minutes that start a little slow, but watch it all and get an eye-opener). It shows the difference between pushing services and products by working hard and just “pushing” it forward compared to “pulling” (pushing) the order. There are surprisingly large gains even though the film is from 1983.

The travel industry has for decades relied on Global Reservation Systems (GDS) and their mainframe structure. The systems were based on the premises of customers (airlines, hotels, and car rental companies) and not on distribution. This has meant that education throughout the period has been based on learning 25-50 commands and how the systems can be manipulated.

The current structure entails:

• Low productivity per paid personnel hour.
• Lack of work sharing due to ownership relationships (my order) and personal work areas (queues).
• Focus on being able to make changes, billing, cancellations, and invoicing.
• Difficulty in selling extra products and increasing earnings.

In Denmark, a full-time employee works 1550 hours a year when taking into account holidays and sickness. With an average salary of between 300-400,000 DKK, this corresponds to an hourly wage of more than 200 DKK. In the business travel sector, approximately 1 “offline” transaction is produced per hour. In this context, a transaction is a PNR with 2-4 segments. In the holiday sector, 1 transaction is produced per 4-5 hours. As there are often several people in a PNR, the entire transaction is much more valuable in holiday travel than in business travel.

What does it mean economically? We know from existing LEAN environments that it is possible to increase productivity by more than 50% while improving quality and increasing the sale of, for example, hotels and car rentals by 20%.

If your company, for example, produces 40,000 GDS segments, it would normally correspond to approximately 16,000 transactions (PNRs) per year. That corresponds to about 10 full-time employees with an hourly wage of around 200 DKK. If you introduce LEAN throughout your organization, the same 10 employees could create 60,000 GDS segments and 24,000 transactions.

As your income is at least 200 DKK per PNR, that corresponds to a minimum increased profit of 1,600,000 DKK. In addition, there will be an increased revenue of 10-20% in hotel and car rental commissions. These numbers are based on offline and labor-intensive reservations.

It is clear that the numbers and structure differ from agency to agency, but that doesn’t change the fact that transitioning to LEAN will create the above results. It is important to understand that LEAN in one place is not the same process as in other LEAN places. It must be tailored.

The process is not complicated, but it means that employees must change their attitude to taking ownership of the booking and their way of thinking about work. Therefore, we start with a lecture and discussion with the employees, identify some ambassadors, create an action plan and a transition date.

It is incredibly important that LEAN is anchored in the management!