kpi for travel agency

Key Performance Indicators (KPIs) are used in various organizations to measure overall and individual contribution to the goals of an organization. Usually the travel agency outlines a number of KPIs to estimate performance and evaluate current progress. For example, task performance of the travel agents can be evaluated by comparing the quantity of tours actually sold with the quantity of tours planned to be sold. In the travel agency solution there can be accreted the following indicators: Planned Sales, Actual Sales and Ratio.

For each customer and for each business objective, KPIs (Key Performance Indicators) provide the essential measurement parameters and variables that are really needed to evaluate and improve the activities undertaken. In the fiercely competitive panorama of the travel sector needs to improve the performance and sales margins of business activities.

Today, the cost of acquiring a customer means you have to measure exactly what happens both when a customer is captured by different means. Only by relating these indicators to your own economic tourism logic and to the specific logic of each customer can you guarantee sustainable distribution costs and continual improvement of performance. This is why KPI measurement should be done as a methodological approach which guarantees the client a constant attention to ROI (Return on Investment).

Key Performance Indicators should the key attributes of the service which your organization believes to be critical for successful delivery.

Travel industry is today facing severe challenges like price wars, safety and security issues. This demands for a round the clock system availability with up to the second information. Conveying this information to targeted audience is equally important. The data may include supply chain information, inventory information, package tracking, flight/travel activities and passenger details with preferences. Integration of all this data from diverse sources is important to drive business smoothly. Customer loyalty also plays an important role in success of transportation and travel industry.

Running a service providing company like a Travel Agency is always a tricky job and if the organization sells something as invisible as ‘experience’, the complexity shoots up even more. Moreover, with ‘financial aims’ and ‘market share’ expectations remaining high the task at hand becomes even more challenging. Moving on, the issues of internal environment and employee management do crop up, like in every team work. The way out is the defining KPIs to measure and indicate the performance.

A Travel Agency is involved in arranging for ‘travel trips’ for people who ask them to do so. This spans a wide range of tasks and therefore makes it important for the travel organization to bring in a ‘quantifiable strategy’. This in turn, takes the shape of a Dashboard with relevant set of KPI metrics on it. By calculating and assigning values to these indicators, one can easily get over with the task of imposing a ‘monitoring tool’ and moving logically.

Some of the areas where BI can be applied to travel:

• Capacity Planning – Capacity planning Analysis enables to identifying unused or available capacity for cost saving. Helps to provide accurate information on capacity usage of the infrastructure.

• Transporters Performance Evaluation

• Mode-Cost Analysis

• Supplier Compliance Analysis

• Routing and Scheduling

• Driver Performance Analysis

Behind every successful business there is the capacity to measure the factors that really count in achieving their marketing objectives. BI offers exceptionally effective tools in this regard, since unlike any other system, every activity performed by every user leaves a measurable indicator.

Given the high number of variables in the travel booking process, each travel agent has their own preferred way of doing things. Below is a brief set of bullet points containing KPI which you may find useful as a starting point and to trigger further thought.

The below KPIs can be tailored to your needs.

Rail/air/ferry/hotel/venues

• Telephone calls answered within X rings/ X number of seconds

• Booking requests (regardless of booking method) to be acknowledged within X time and confirmed within X time

• Written confirmation (email etc) to be issued to booker/traveler within X time including all relevant information (directions to hotel for example)

• (Where there is one) compliance with travel policy

• Complaints to be acknowledged within X time and resolved within X time

• Invoices to be 100% correct

• Where tickets/confirmations are issued by post, to be posted same day

Vehicle Hire:

• Bookings to be confirmed within X hours

• X% of vehicles to be delivered X amount of time prior to start of hire period

• Vehicles provided to be roadworthy including operating instructions

• X% of vehicles to be collected within X time of hire period end

• All vehicles to be delivered with a full tank of fuel

• All vehicles to comply with BVRLA safety standards

• Complaints acknowledged within X time and resolved within X days

• Driver to be notified in advance if delivery likely to be late

• Invoices to be 100% correct

Management Information: Decide upon the frequency you require management information and the detail required. As an example you may decide a high level dash board report once a month will be sufficient with a more detailed return provided on a quarterly basis. Understand what issues you want captured in the data, including demonstration of savings achieved, and measurement of performance against KPI’s.

Quality Plans: In managing the call off contract with your travel booking agent you should work with them to seek continuous improvements keeping pace with changes in legislation and industry innovations. You may consider including details of their business recovery plans, and how in the event of a major incident you and you employees’ interests would be reported.

Specification: A concise specification which clearly captures your service delivery requirements. Suggestions for inclusion are;

• Response times to enquiries

• Ticket delivery arrangements

• Hours of service and out of hours arrangements

• Consider which financial model will be best for you: commission share or transaction fee approach

• Payment methodology, decide whether your organization requires bill-back, or travelers will settle bills on departure

Implementation Process understand what service delivery you require within your organization, for example:

• Will it be managed by central admin team or will individuals be responsible for their own bookings

• What type of booking process will you require, manual or will you be using the online booking systems offered by each of the travel service booking agents

• Decide the expenditure limits you want applied, and how you will deal with the exceptions

• Agree how frequently you will meet with your suppliers to review contract performance

Planned Sales – Indicates the number of tours the travel agency plans to sell for some period of time (e.g. quarter, month, week). Supervisor can define sales plan in custom field tab of the task group “Tours”.

Actual Sales – Shows the number of sold tours during defined period of time. It automatically calculates sold tours registered in the task group “Tours” by the travel agents.

Ratio – calculated as a division between Actual Sales and Planned Sales. This performance indicator is helpful for Supervisors to track plan fulfillment. When building the custom field “Ratio”, Supervisor should to insert an appropriate formula.

Preview section of task groups – All custom fields can be displayed as task columns in Task Tree view. However, Supervisor may need to create some specific indicators which are not concerned to all tasks or task groups. In this case, he can configure custom field options for a task group to get specific indicators displayed in the preview section of a certain task group. For example, the custom field “Ratio” is related only to the task group “Tours” and there is no need to concern it to all task groups and tasks in the travel agency database. Preview section in task groups can be hidden by using Preview Mode button in the toolbar.

Displaying KPI in charts – In the travel agency solution key performance indicators can be displayed in charts. The Charts Panel can be configured for showing the indicators “Actual Sales” and “Planned Sales” in single Bar diagram. Supervisor can select one of five available diagrams in Charts Panel.

Key performance indicators (KPI’s) for online Travel Industry

KPI for Online Travel AgencyTravel sites are challenging with so many moving parts and rich media applications which drives success. Remember KPI’s are bridge between your business objectives and web analytics data, Each site may it’s own specific set of measures. However, here are Key Performance indicators which will help one get started assuming you have your web analytics data implemented to capture this data.

1. Revenue Per Booking: Revenue per booking will vary by season, product type, booking pace, and because of this variation it’s important to have a trended view of the KPI to give you an overview of your revenue performance.

2. Sales Cycle: Sales cycle will help you understand,

- Days Before first purchase: The number of days that elapsed between the customer’s first visit and

his or her first purchase.

- Days Since Last Purchase: The number of days that elapsed between the most recent purchase

and the preceding purchase.

3. Look to Book Ratio/Conversion: The Look-to-Book Ratio is the percentage of visitors (looking) who actually make a purchase (booking).

Look-to-book Ratio helps

- Understand if there customers are satisfied with their visit/shopping experience.

- Understand how qualified the traffic to their Web site really is. Look-to-Book.

4. ROAS (Return on Ad Spend): Helps understand the return on various marketing spend, helping you do a quick SWOT analysis

5. Campaign Conversion rate: A quick overview of all your campaign performance.

6. Top Origin and Destination Cities: This probably is one of the oldest metrics used by airline industry, This metric can help understand popular city pairs and also correlate with other metrics (example: Understand which airlines compliment with popular city pairs, measure look to book conversion for top origination and destination cities, Revenue per booking for popular pairs)

7. Top Geography and Demography: This metric gives great insight, the reason i emphasize this is coz of how internet booking is gained/gaining importance India, this metric will help you understand top cities and evolving areas where internet booking is growing.

So above was the list of top KPI’s for Travel Industry which will help travel firms provide actionable, real-time insight that can help them with both online and offline strategies.

There are a number of aspects that need to be taken care of when one is in the business of running a travel agency. However, one can successfully get along well with all of these by using the mentioned management strategy. Consequently, organizations trying to make it big in travel field have an option of going with such approaches and achieving their pre-set aims and objectives.

Financial Perspective: Quantification of Financial aspect can be measured using the parameters like ‘operating profit’, ‘% increase in planned sales’, ‘actual sales step-up ratio’ and ‘% increase in travel and entertainment cost’.

- Operating profit – This is the most important financial metric, indicating the financial health of the organization

- % increase in planned sales – It refers to the % increase in the planned sales over the past 6 months. This KPI shows the efficiency of the travel consultants

- Actual Sales step-up ratio

- % increase in travel and entertainment cost

Customer Services and Satisfaction Perspective: Customer Services and satisfaction can be taken care of by employing metrics ‘number of ancillary facilities’, ‘favourable review index’, ‘% increase in customer base’ and ‘look/book index’.

- Number of Ancillary facilities – This KIP’s value is equal to the additional facilities provided to customers like mobile alerts, previews (video, hotel looks and reviews) and attractive deals on packages

- Favourable review Index – The value of this parameter can be had by knowing the percentage of travellers that rated the experience as ’satisfying’

- Look/Book index

- % increase in customer base

Internal Operations Perspective: Internal Operations can be known with number of booking channels, abroad to local bookings ratio, packaged to independent bookings ratio and green index.

- Number of Booking Channels – It refers to number of booking channels through which people books their trips in the travel agency. It includes retail, online, direct, etc.

- Abroad to Local Bookings Ratio – It indicates the fraction of abroad bookings experienced in the travel agency as compared to the local bookings. (ratio of 40% to 60%)

- Packaged to Independent Bookings Ratio

- Green Index

Business Planning and Growth Perspective: Business planning and growth perspective can be gathered by assigning values to ticked delivery standards, disaster recovery planning effectiveness, % increase in number of tour packages sold and number of staff retention initiatives taken.

- Ticket delivery standards – It refers to the level of delivery standards maintained by the company for providing fast, efficient and reliable service to the customers with a view to improve business reputation

- Disaster recovery planning effectiveness – It shows the effectiveness and accuracy of disaster recovery planning done by the travel agency to provide safe and reliable travelling experience to the customers

- % increase in number of tour packages sold

- Number of staff retention initiatives taken

Business Intelligence and Key Performance Indicators for Transportation and Travel

The Transportation and Travel industry grapples with price wars, competitive promotional campaigns, travel safety and security issues, round the clock service availability and more! The enterprise that competes in this market must have access to up-to-date analysis and information to monitor targets, manage performance, communicate with clients and forecast trends for new product and service offerings. The available data must include complete insight into supply chain information, inventory, product and service performance, competitor pricing and positioning, package tracking, flight and travel activities, schedules, billing and passenger detail.

The enterprise must understand its ideal customer demographic and the buying behavior of its target customers. Integration of data from diverse sources is important and enables business users to compile, filter and sort information to create a customised view of data that will help them make more confident decisions and enhance customer loyalty.

With so many options and choices for vacation, travel, related and services, an enterprise must effectively manage its business and service value and offer new products and services and innovation to keep pace with customer needs and market trends. Whether your business is an airline, travel agency, tour bus company, commercial cargo, rental car agency or other related business, you have the same need for data. Analysis of current customer feedback and needs and the forecasting of trends are just two of the factors that drive your business. If you are to achieve excellence in customer satisfaction and optimise resources, investments, and performance, you need a simple way to view and analyse data and make confident decisions.

ElegantJ BI corporate performance management (CPM) and business intelligence (BI) solutions can provide one unified view of data, using information integrated from other enterprise systems and sources. Users can establish metrics and key performance indicators (KPIs) and receive automated alerts when a threshold has been crossed. The enterprise can gain insight into facilities usage, supplies, schedules, maintenance, equipment, resource allocation, training, hiring, sales, marketing campaigns, revenue, billing, demographics and customer profiles, competition and more!

Business Intelligence Solutions

Business Intelligence for Transportation and Travel

True business intelligence (BI) can support, grow and ensure the success of the transportation and travel enterprise, and simplify the process of managing the competitive strategy, the supply chain, products and services and other critical business factors.

Capacity Planning – Capacity Planning Analysis enables the user to identify unused or available capacity and optimise resources and infrastructure to achieve cost-effective, competitive services and pricing

Market Research – Enable thorough analysis of market research to make appropriate decisions about new products, trends and competitive positioning and complete insight into demographics and customer buying behavior

Customer Satisfaction Analysis – Customer Satisfaction Analysis facilitates optimisation and streamlining of operations of airlines, agencies, and fleets to achieve optimal customer retention

Customer Churn Analysis – Churn Analysis evaluates and identifies reasons for customer churn and enables users to quickly and efficiently address issues when targets are not met or when a problem arises, so that the enterprise can combat customer churn

Financial and Operational Performance Management – Financial and Operational Performance Management and Analysis enables financial performance and allows the organisation to establish and meet goals and track progress using a large volume of information, integrated from numerous enterprise systems and sources. Users can monitor the financial health of the organisation and create and share reports to comply with government and industry regulations

Customer Profitability Management – Customer Profitability Management and Analysis facilitates excellence in customer service and improves customer acquisition with targeted marketing and market research. Users can identify the most profitable customers and analyse buying behavior and preferences

Sales, Marketing and Management – ElegantJ BI provides ample support to establish and manage the results of marketing campaigns, market research, sales results and targets, individual sales performance, regional and product sales performance and more

ElegantJ BI for Transportation and Travel – Benefits at a Glance

Analyse transportation, fleet, trip, or summary data and quickly resolve problems with complete insight into the root cause of those problems

Perform mode-cost analysis

Establish and monitor targets for supplier and partner compliance

Manage routing and scheduling

Ensure optimal resource allocation and manage pilot, driver and equipment performance

Improve efficiency by providing on-demand, simplified business intelligence and automated alerts for better responsiveness

Cultivate customer loyalty with customer relationship management capabilities

Explore new avenues and opportunities to expand customer base and improve services by identifying new customer sectors and changes in buying behavior

Monitor and improve billing and collections effectiveness

Set targets, monitor and analyse inventory, resource allocation, schedules and more

Monitor performance with personalised criteria and dashboard views

Identify and gain insight into regions, locations, team, product or service portfolios to understand performance issues

Analyse data by time, season, service, category, region and business unit

Design and monitor promotional and marketing campaigns

Identify potential properties or businesses for acquisition

Enable self-serve, browser-based ad hoc queries and business intelligence for every user, without the assistance of IT experts.

Consolidate data from other enterprise systems and sources and produce reports, presentations, and custom dashboards to meet every user need

Ensure an ideal combination of technology, processes and people to optimise business strategy and cost and resource allocation

Identify profitable partners and improve collaborative business processes

Improve performance by integrating management and financial metrics

Provide consistent operational and financial view across organisation to enforce accountability and information sharing

Identify redundancies, control costs and discover profitable growth opportunities

Ensure regulatory compliance and provide accurate, intuitive reporting

Provide capability to handle complex and large data elements in different data schemes spread over a wide geographic distribution for risk recognition and trend analysis

Establish key performance indicators (KPIs) on sales by product, region, partner, or sales representative using personalised BI dashboards and intuitive business intelligence reports

Provide the support to eliminate the use of complex, error-ridden spreadsheets in favor of highly intelligent BI dashboards and business intelligence reports with graphical and drill down capability

Leverage investments in existing resources and infrastructure by integrating data from existing sources

ElegantJ BI Integrated Business Intelligence and Enterprise Reporting capabilities ensure comprehensive Corporate Performance Management, and provide business intelligence with simple, practical, affordable features and functionality. Our BI modules are relevant to all industries and functions and can be used by the average business user without the assistance of analysts, statistical experts or technical programmers. No matter the size of your organisation, ElegantJ BI solutions can satisfy your needs with flexible licensing and implementation options that include on premises implementation and hosted, Software as a Service (SaaS) implementation.

ElegantJ BI solutions provide a single source, integrated view of enterprise data from numerous sources and enable every user to build views, balanced scorecards, dashboards and key performance indicators (KPIs) to satisfy the needs of their role, department and function, so every user is engaged in the pursuit of strategic, operational and tactical goals and can provide appropriate support for continued success in acquiring new clients and in retaining existing clients and selling new products and services.

If you need a rich, intuitive Business Intelligence solution, coupled with robust CPM features, we encourage you to contact us today to discuss your unique requirements and get started with the ElegantJ BI solution suite. Email us at [email protected]

Financial

Strategic imperative

Our main strategic objective is to improve the Group’s profitability and to deliver enhanced returns on investment. We believe that improving our financial performance will allow us to invest in the future of our business for the benefit of shareholders, colleagues and customers.

Performance

To measure our financial progress we have two Financial KPIs: (i) operating margin % and (ii) the return on invested capital (ROIC).

In the year, margins improved by 40 basis points over the restated 2009 margin of 2.9%, primarily driven by the delivery of merger synergies and turnaround progress, partially offset by a weaker trading performance in the UK source market.

Target

In January 2008, we set out a roadmap to increase TUI Travel’s operating margins from 2.0% to 4.7% and set out a target of doubling the Group’s ROIC to a level in excess of the Group’s cost of capital.

Key performance indicators

FY10 FY09

3.3% 2.9%1

1 FY09 shown after the restatement

ROIC

FY10 FY09

9.9% 8.6%1


Product & content


mailto:[email protected]

Increasing the proportion of our products that are different to those offered by our competitors is our most important strategic imperative. Differentiated products have earlier booking curves, higher customer satisfaction and retention and superior margins. These products are difficult for competitors to replicate and we have a significant competitive advantage due to our existing brand loyalty and experience of designing and operating new concepts.

Performance

In the year, we increased the differentiated product mix by one percentage point across the total Mainstream Sector, although certain source markets made greater improvements, such as the Nordics (up six percentage points) and the UK (up three percentage points). The overall increase was affected by a small reduction in France where we are re-mixing away from some of our older differentiated products (e.g. Club Paladien) to newer products (e.g. Nouvelles Frontières Hotel Clubs) and also growth in commodity product in Belgium where we increased our market share.

Target

We are targeting a differentiated product mix of greater than 50%, as a proportion of total Mainstream Sector holidays.


Differentiated / exclusive product mix as a proportion of total Mainstream Sector holidays.

FY10FY09FY08

38% 37% 33%

Distribution & brands


Increasing our direct distribution mix, with a focus on online sales, is a key driver of reducing our distribution costs and enhancing our customer relationships. Direct distribution typically represents the most efficient distribution method and allows us to provide even better value to customers. Importantly, selling directly to our customers means that we can further manage their end-to-end holiday experience and improve brand and product loyalty.

Performance

We have increased our controlled distribution mix in the year in all source markets, with the most significant increases in France and Germany. In France, the key driver of the increase has been introduction of our Marmara products in our Nouvelles Frontières and Havas Voyages retail stores.

Target

We are targeting a controlled distribution mix of greater than two-thirds in our Mainstream Sector.


Controlled distribution mix, as a proportion of total Mainstream Sector holidays.

FY10FY09FY08

62% 59% 53%

Specialist sectors


The Specialist Sectors add significant value to the Group as they enjoy higher margins and growth characteristics, and are virtually impossible to replicate as we have crucial first mover advantage. Having a relevant position in non-mainstream markets is strategically important and is a key differentiator and growth driver for the Group. For these reasons, the generation of a substantial proportion of the Group’s operating profits from Specialist Sectors is an important objective.

Performance

The proportion of operating profit contribution from the Specialist Sectors has decreased in the year as the Mainstream Sector profitability benefited from synergy delivery and turnaround progress, whereas operating profit in the Specialist & Emerging Markets Sector was lower due to start up investment in Russia and reduced capacity in our private jet tours businesses.

Target

We expect the mix of profits from the Specialist Sectors to increase in the medium term due to their superior underlying growth characteristics.


The proportion of Group operating profit generated by our Specialist Sectors2

FY10 FY09

32% 37%1


2 Before central costs

Responsible leadership


We are experiencing greater consumer awareness of sustainability and believe that creating more sustainable holidays will help protect our product into the future and also support product differentiation, brand loyalty and competitive advantage.

Performance

TUI Travel airlines’ performance measured in terms of carbon dioxide emissions per revenue passenger kilometre (CO2/RPK) makes our fleet one of the most efficient in Europe and beyond.

Target

The Group has committed to reducing its airlines’ direct carbon emissions by 6% by 2013/2014 (against a baseline of 2007/2008) in terms of total carbon emissions as well as relative carbon emissions, based on 2008/2009 operational structure and plans. See Sustainable Development

Key performance indicator

Aircraft carbon efficiency, measured through TUI Travel airlines’ fleet average CO2/RPK

FY10 FY09 FY08

76.1g CO2/RPK78.1g CO2/RPK77.9g CO2/RPK

http://ara2010.tuitravelplc.com/tui-ar2010/en/strategic-overview/sustainabledevelopment

kpi for travel agency

Documents