Impact Of COVID-19 On Travel Businesses And Advice On A Comeback Strategy With Mike Putman
We had the opportunity of interviewing Mike Putman, Founder and CEO of Custom Travel Solutions for understanding the impact of COVID-19 on Travel Businesses and advice on a comeback strategy. With over 3 decades of experience and in-depth knowledge in the travel industry, Mike has observed evolving customer travel habits and needs over the years. He came together with other experts and formed Custom Travel Solutions.
Custom Travel Solutions is one of the leading providers of premium membership-based travel and lifestyle benefits. They also provide white label booking engines, travel APIs, travel benefit programs, travel fulfillment, travel licensing, travel customer service, closed user group inventory, and a full array of consultative services.
Following were the questions we asked Mike during the interview where we discussed the impact of COVID-19 on Travel businesses and more:
1) Would you like to walk us through what Custom Travel Solutions is and how you build your team when you started?
The reason I started was that I saw the need for a quality white label travel club provider and the choices were limited. I saw an opportunity in the marketplace and went for it.
From 34 years of experience in the travel space, I realized that the best opportunity is in the loyalty space, and rather than having to chase customers all the time the great part about Loyalty is you do the marketing once and you gain a loyal customer base. There’s some attractiveness in being able to have a little more control with your customers. This was the reason that got us in this space and there was just a void in the marketplace.
2) How did you build your team since you have an offshore and onshore team you work with?
For the US team, we had some resources from my last company that came along with me to form this company, and then we actually had a customer early on that turned into an employee/partner in the company and that’s how we built up the US team. Later we made some additional hires here as well. In our offshore team, we led a strategic relationship with our technology supplier at the time and we were looking for a high-quality scalable team, so we decided to build it there. The reason to build it there was that we knew there was a skilled workforce with plenty of people that would allow us to scale which would have been significantly harder to do here in the US.
3) Since Loyalty business, especially in India, is not very prevalent compared to the West, what are the difficulties working with offshore teams and how do you do the overall knowledge transfer for the business?
We’ve got some really good people involved and we’ve spent a lot of time doing trainings. The only major challenge has been the time difference because we’ve got these communication tools that we use and it doesn’t matter if you’re down the road or across the globe. It takes a little stretch on the hours so I get up very early in the morning to work with the team and provide them some feedback and in turn, they work in the later hours. We also have some cultural challenges and to overcome that we have a cultural trainer that we use here in the US that gives us life skills and business skills. We brought him over to India to do sessions. The training lasts a of couple days with the staff and new hires which is done via zoom. These sessions include life skills like:
- How you communicate better? And so on.
- How to solve conflicts with employees, clients?
Employees go through these trainings to develop a culture amongst the teams even if we are thousands of miles apart.
4) What were your deciding factors to work with Vervotech and particularly get NEXUS integrated onto your platform?
I did spend a lot of time looking at competitive products and felt very good about NEXUS.
The deciding factors were:
- Ease of implementation
- Best in class speed that the product allows
- The flexibility of the team to identify and work on specific needs
- Vervotech is focused on one piece of the travel business and that is providing content and solutions for hotel distribution so that had a lot to do with it as well.
5) Could you talk about the impact of COVID-19 on travel businesses? What has been the impact on Custom Travel Solutions and any changes you are making in terms of business strategy?
We’ve got customers all over the world and in general bookings are significantly down. On a scale, they are between 58 and 85% down which are very significant impacts. We expect that to continue until people are allowed to freely move. In the US and Europe the restrictions to move around certain businesses are opening up and this is happening daily. The impact of COVID-19 on travel businesses is notable but travel will begin to come back soon.
I’ve fortunately or unfortunately been through some situations that are not the same but have some similarities. The global recession in 2008 was an economic issue and travel suffered. It continued to suffer because the economies of the world were down and people didn’t have disposable income for leisure or business travel. People were holding on to every penny they could.
9/11 had a massive impact on business at the time. To give a couple of numbers, I was operating a travel agency and we did $2 million in August of that year and in October, two months later it was down to $250,000 worth of business which was a substantial drop. Even though it was a different problem, it affected the travel business. I think there are some similarities that you could draw at least for the United States. But after a while, we saw a very sharp increase in travel and within 4 months we got back to a normal rate and soar mobile revenues.
That’s what we’re going to see in the future. We have to keep in mind that this is not an economic issue but a societal, cultural, and health issue. All these airplanes need to get back in the air and they will, and all these hotels need to open up and they will. And when airplanes start flying and when hotels hopefully open up they’re going to have a ton of inventory. I can assure you that the prices will be extremely low. Maybe even below their cost in order to get people moving and traveling again. As people start traveling, the supply will go up and demand will continue to increase and the prices will get back to normal. In my opinion, the recovery is going to be quick. This is with the assumption that the rate of infection continues to go down. Even though the impact of COVID-19 on travel businesses is significant, travel will go up. In the western world, people feel like it’s their right to travel and it’s not just a luxury and that’s not going to go away.
6) Do you have any comeback strategy advice for travel companies?
I would suggest to owners of travel companies to know that it is going to take some time even if it’s a quick snap back it will still take 3-4 months. Ask your employees to help you and try to retain them however you can. Because when it comes back if you don’t have those people you’re going to be at a deficit and do what you gotta do to survive because it will come back. When the chips are down, people who are real drivers, hard workers, and risk-takers; this is when they succeed and make money. The strong will survive and there will be more market share to grab once everything comes out great.
Visit https://www.customtravelsolutions.com/ to discover more about Custom Travel Solutions.
Established in 2018, Vervotech was founded by a team of passionate entrepreneurs, who came in with a collective experience of several decades in the travel technology industry. Vervotech aims at collaborating closely with travel agencies to help solve complex problems by leveraging artificial intelligence, putting data at the core of decision making, and being laser-focused on their clients’ business.