Annually, a travel agency needs to be reminded of the need for a SWOT analysis. The SWOT acronym indicates Strengths, Weaknesses, Opportunities, and Threats. The traditional SWOT looks at Strengths and Weaknesses of the travel agency (internal factors) and tries to thereby ascertain the relationship with Opportunities and Threats (factors external to the travel agency). Doing an annual SWOT analysis is a good pre-requisite to a marketing plan and assists with developing the appropriate goals for your travel practice. One of the most important aspects of a SWOT analysis for travel agencies is very simply the act of planning: the analysis makes you take a good look at your positioning in the market. Each component of the SWOT analysis bears a relationship to the others. Each of your strengths will give rise to opportunities or the capacity to exploit an opportunity. Likewise, your strengths allow your travel practice to better confront the threats on the horizon or compensate for weaknesses.
Your travel agency's Strengths are those aspects of your business profile that give you a distinct market advantage and upon which you can capitalize in your marketing plan. The category of Strengths goes to those qualities internal to your travel practice, not to external factors like the economy.
An analysis of the weaknesses of any travel agency by its owner requires an extraordinary degree of both honesty and humility. It is not easy to admit where your program has weaknesses. Further, from the perspective of an insider, it is often difficult to even detect some weaknesses. For that reason, the input and constructive criticism of outsiders is an invaluable asset. It is likewise important to allow your insiders, employees and associates to openly point out deficiencies during the SWOT analysis. The customer or associate who provides constructive criticism is doing you a real favor, so be prepared to accept critical input in the spirit in which it is given!
Opportunities We know our hypothetical travel agency’s strengths and weaknesses. Now, it is time to think about the opportunities that the market is presenting. Opportunities are external to the company and present the possibility for profit and growth IF the company can position itself to take advantage of the opportunity – which is precisely what the SWOT analysis is designed to do. It is almost certain that the company will not be able to take advantage of every possible opportunity, so identifying the ones with the most potential is critical.
Threats I am almost hesitant to discuss threats to your traveler agency or travel practice. Most of us too easily imagine all the possible perils that await at every turn, especially in the current situation at the time of this article's publication. It keeps us up at night. Worse yet, threats can cause even the most stalwart travel agent to do the worst possible thing – nothing. Threats have a way of making business people pull in their resources and withdraw from the marketplace. The value of a SWOT analysis, however, is to recognize threats ahead of time and to counter weaknesses and marshal our strengths so that we can not only exploit opportunities but can counter, prepare for and diminish threats early on. Taking action is the key to confronting and dealing with threats. We have identified our strengths – let’s use them in defense of our travel agencies!
Exercise The real value of a SWOT analysis is the opportunity it affords to closely examine your business, to work on your business instead of in your business. Examining the opportunities and preparing for the threats, dealing with weaknesses and remembering where your strengths are to be found is an invaluable exercise in planning. Download the SWOT Analysis Program below and conduct your own travel agency SWOT analysis.