The rise of online travel giants, direct booking services from airlines and hotels, and the elimination of airlines commissions have put margins of many travel agencies under pressure, if not out of business all together.
For the Norway’s second largest corporate travel agency who serves over 300,000 customers, the entire business model of the firm changed when airlines stopped paying commissions. Now, with only a small booking fee that can be charged with the issuance of an air ticket, Berg-Hansen’s flight booking operations has to be ultra-efficient. Because the company made decision early on that IT can be the competitive difference, Berg-Hansen’s decision to move the majority of its airline bookings onto a customer self-service Web interface was made in time to deal with these changes. Today, Berg-Hansen processes more than 60% of its air reservations through Web self-service, while travel consultants are available to assist customers with more complicated travel needs. “We are in an intensely competitive business. Every day, we have to answer the unspoken question, ‘why are you better than your biggest competitor?’” says Bent Olsby, Senior Software Development Engineer at Berg-Hansen. “This transition to corporate-friendly self-service booking has enabled the company to weather an industry-wide shakeout.”
The move to more self-service and concurrent drive for more internal productivity has resulted in two IT challenges. The IT infrastructure has to run efficiently and be agile enough to change with modifications to business process. In addition, the mitigation of security concerns, including data encryption and backup, had to be performed at a pace that matched business conditions. For example, even with a low margin per booking, they need to keep a record of the reservation for several years in their system due to refunds, customer contracts and accounting rules. “Reliable data backup and availability are essential to the business,” says Bent Olsby.