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TRAVEL SERVICES GO ELECTRONIC
Finnair's Travel Services business area provides travel planning and travel management services. The travel agencies Area and Finland Travel Bureau, which are owned by the Finnair Group, are among the three largest travel agencies in Finland. Amadeus Finland, a supplier of reservation systems technology to the travel sector, is developing new solutions for the changing distribution market.
The Travel Services business area comprises:
- Matkatoimisto Oy Area
- Suomen Matkatoimisto Oy (FTB)
- Estravel AS (FTB's subsidiary)
- Amadeus Finland Oy
- Mikkelin Matkatoimisto (Area's subsidiary)
- Finnair Travel Services Oy (travel agency financial administration)
The rapid technological development that has taken place in the travel sector in recent years has impacted on travel agencies' operations and practices, particularly in the sale of journeys to consumers. Independent action has increased in the purchase of leisure trips. Various options are actively searched, compared and bought via the internet. Travel agencies play a more prominent role when the destinations are further afield or if the journeys require a lot of planning.
In corporate travel, the travel agencies have managed to retain their strong position well. Corporate sales in Finland are highly concentrated, because up to 90 per cent of the market is controlled by four operators. The challenge for travel agencies both in the consumer and corporate sphere is to develop electronic services and travel management systems.
The financial administration units of Area and Finland Travel Bureau were merged and incorporated in autumn 2004. The arrangement has worked well and has generated cost savings.
One of the most prominent events in the travel sector in Finland in 2005 was the bankruptcy of the Töölön Matkatoimisto travel agency. The disappearance of a major player from the market clearly increased the sales of Area, FTB and other travel agencies.
Area updates its identity
Matkatoimisto Area's largest business area is the provision to companies of travel management services and consulting. In addition, the company produces and arranges trips for consumers, and organises group and activity holidays. Around three quarters of turnover comes from business travel services and the remainder from private travel and tailored package tours.
Area, which acts as an agent for several tour operators and airlines, has an office network covering the whole of Finland as well as business travel centres in the largest towns and cities. Mikkelin Matkatoimisto Oy is a subsidiary of Area.
The value of corporate travel sales in Finland totals around 650 million euros a year, of which Area's share is around one fifth. In corporate travel the challenge continues to be tighter competition and a weakening of the sector's profitability. Area's goals are cost leadership among business travel agencies and market leadership in the sale of leisure trips.
In 2005 Area's turnover grew slightly compared to the previous year. A contact centre was developed to provide better, multi-channel service. The company is delivering to customers new electronic solutions that facilitate self-service. This enables more efficient use of the travel agency network, which in turn yields cost savings.
In 2005 Area received a new visual image, which communicates the company's identity as an e-business travel agency.
FTB grows in Finland and the Baltic states
Finland Travel Bureau's services include the arrangement of business trips as well as a comprehensive range of group, conference, sport and package tours. FTB's subsidiary Estravel is the largest travel agency in the Baltic states, with operations in Estonia, Latvia and Lithuania.
In addition to an extensive service network and comprehensive services, Suomen Matkatoimisto's strengths are product names that focus on certain fields, such as Etumatkat, a city-break specialist, à la carte, which offers tailored holidays, and Merilinja, a cruise trip programme. Finland Travel Bureau has more than 30,000 regular customers.
Business trips account for around one half of FTB's sales, although the proportion represented by leisure time travel is expected to continue to grow. The company's total sales in 2005 were around 300 million euros. Of this figure, actual turnover, namely the proportion accounted for by services and products produced by FTB, is around one fifth.
Finland Travel Bureau has maintained is profitability by keeping its cost level moderate and by developing electronic services. FTB is aiming for modest but constant growth in Finland and the Baltic region. Incoming travel, namely travel directed to Finland, is continually growing in significance and is creating new business in the country. On the business travel side, growth opportunities are to found particularly in Russia.
Amadeus technology responds to changes in distribution
Amadeus Finland has strengthened its position in Finland as an implementer of comprehensive information technology solutions for travel agencies. In line with the updated corporate image of Amadeus International, greater emphasis is being placed on Amadeus Finland's role as a travel sector technology partner that has the ability to develop various options for the changing needs of both established and new operators, from the sale of trips to financial management.
One of Amadeus Finland's most important tasks is to gather all the information produced by travel providers into one system, through which travel agencies and providers of travel services can manage their products worldwide. As old systems are decommissioned, airlines also have a need for new information technology. Finnair, for example, has introduced Altéa Plan, Amadeus' new seat management system.
In recent years the basis for traditional distribution activity has had to be re-examined as direct internet delivery has become more widespread. Systems are required to be flexible as sales channels diversify. Amadeus solutions allow systems to be managed flexibly, because Amadeus' advanced technical platform is able to support different business models and is not tied to a traditional distribution model.
Travel Services in figures 2005
| Area's turnover (mill. euros): |
21 |
| Trips sold in Area: |
313 000 |
| SMT's turnover (mill. euros): |
62 |
| No. of customers travelling via FTB: |
450 502 |
| Amadeus Finland's turnover (mill. euros): |
11 |
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