Survival strategies for SMB Activity companies in the non-face-to-face era

According to the Korea Tourism Organization’s ‘Next Level of Travel Industry’ analysis report, the proportion of ‘online distribution channels’ in the global tourism industry is expected to increase from 60% in 2017 to 72% in 2025. Here, the increase in the ‘distribution platform’ market that relays travel products and services is expected to have the greatest impact, and the growth of the ‘online travel reservation platform market’ is expected to grow by 89.8% in 2027 compared to 2020.

Survival Strategies for Activity companies in. the non-face-to-face era

The non-face-to-face culture that has spread throughout society due to the prolonged COVID-19 has become a daily routine in consumer behavior as well. Even the elderly, who were digitally underprivileged, are showing an increasing trend of using online shopping by more than 20% compared to before and after Corona 19. The travel industry is no exception to the daily routine of online consumption.

Online consumption dominates the travel industry, regardless of age

According to the ‘2022 Travel Trend Report’ conducted by Open Survey, a consumer data platform, nearly half of 3,000 men and women in 2059 answered that they have travel plans in the second half of this year (44.2%). The main method of booking was found to be through portal sites, travel/activity related or shopping apps/web, regardless of age. The main reasons for choosing online reservation/payment were ▲Convenience of reservation/payment ▲Reliable app/web ▲Comparison of products in various price ranges ▲Possibility to make a reservation at the lowest price. This shows that online exposure of travel/activity products is directly related to sales.

Easing immigration regulations, soaring demand for overseas travel/activities

As immigration restrictions related to COVID-19 are eased, demand for overseas travel/activities is also rapidly increasing. According to a survey conducted by the Korea Tourism Organization and Travel Newspaper on 'Endemic Era, Overseas Travel Consumers Want', 88.16% of 5,522 respondents answered that they were willing to travel abroad within the next year, and among them, 'very much'. Respondents who responded accounted for 47.05% of the total respondents, indicating high domestic interest in overseas travel. In order to absorb domestic and foreign demand like this, online sales are no longer an option, but a necessity.

From traditional travel agencies to tour & activity travel agencies, accelerating online expansion

In line with the changes in non-face-to-face consumption methods, traditional travel agencies such as Yellow Balloons and Hana Tour, as well as offline tour and activity travel agencies, are striving to develop a large-scale online market. According to an analysis report by the Korea Tourism Organization's "Next Level in the Travel Industry," the proportion of "online distribution channels" in the global tourism industry is expected to expand from 60% in 2017 to 72% in 2025. The increase in the "distribution platform" market, which relays travel products and services, is expected to have the biggest impact, and the growth of the "online travel reservation platform market" is expected to be 89.8% in 2027.

In addition, just by looking at the scale of participation in the "Digital Transformation Support Project System for the Travel Industry," which has been underway by the Ministry of Culture, Sports and Tourism and the Korea Tourism Organization since 2021, you can see a massive move to enter the online market. As of last year, about 220 small and medium-sized travel agencies participated, and they broke away from the existing analog method through the establishment of a digital system to achieve results such as creating new business models and improving profit structure. As such, travel/activity companies will continue to enter the online market, and now the travel industry itself is in a difficult market environment to survive without digital transformation.

How to sell online quickly and cheaply

Depending on this travel industry movement, travel/to-face-to-face-to-face-to-face-to-face-to-face.

  1. Establishment of our own mall

In the past, it used to cost a lot of money and a lot of manpower to build its own mall, but now it is 5,000 won to 200,000 won per month, and it can be quickly created through website production services such as I'm Web and Six Shop. However, after the establishment of the company mall, all tasks such as advertising/marketing for continuous customers and linking PG and credit card companies required for payment must be carried out directly, so these fixed costs can be burdensome in the face of low sales.

2.  Online distribution channel entry

It is a method of entering products into online channels such as OTA such as TripDotCom, Klook, and Frip, social commerce, and open markets. The advantage is that online channels are directly marketing for customers and purchase conversion, so you can expect a large influx of customers. Channel fees* are typically priced at 15% to 20% at the selling price, but are priced at the point of sale, and are considered a quick way to try and make a profit because they are less expensive than method 1. However, as you enter multiple channels, you have to check the status of orders, inventory management, and sales in real time, so it may be difficult to understand the overall product input/output and cash flow.

*Includes channel fee, VAT, PG company/card fee, marketing, etc

AX Online Sales Automation Solution for Most Points of Entry

For Tours & Activities who are considering entering several online distribution channels, AX (AX) is proposing an online sales automation solution.

As a key feature,

  1. From simultaneous entry to sales settlement, conveniently one-stop

From a simultaneous entry of products to sales settlement on large online channels such as Coupang and TripDotCom, one-stop business processing is possible through the Ax service. Not only can you see sales by online channel, product, and period at a glance, but you can also see orders from various channels in real-time, allowing you to manage to warehouse and accurately aggregate sales without overbooking.

2.  Automate online sales to reduce fixed costs

By automating tasks through the introduction of the Ax solution, it is possible to reduce labor costs for each task, such as product management, sales/settlement, and customer response. In particular, if you're a tour and activity company that's worried about cost reduction and work efficiency, the Ax solution can be a solution.

Start creating products for free.

Now leave your online sales to AX and focus on growing your business.

AX will become a reliable business partner.

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