Bill Gates, a pretty smart guy, supposedly once said something along the lines, “Now, you can throw away your travel agent’s phone number.” Whether he believed it or not is hard to say. At the time he would have been plugging his new online travel agency (OTA) Expedia. Certainly, Gates wasn’t wrong in forecasting that online sales of travel would become significant. However, things have changed quite a bit in the two decades since he made that proclamation.
It’s a long list, but even back in the Nineties, there were airline delays and bankruptcies throwing the proverbial monkey wrench into travel plans. However, the system had a bit more flexibility. American Airlines used to keep extra aircraft at its hubs as back ups in case of mechanical delays. Not anymore. Remember when if one shuttle flight filled up, they would bring out a spare plane so you didn’t have to wait for an extra hour? Airline load factors have increased from the 60% range into the 80s, meaning that flights on popular routes are often sold out for days at a time. Front line employees used to have the ability to grant waivers and favors when you had extra baggage or needed to change a flight. Not so much these days. Hotels and rental car companies were more liberal with their cancellation policies. In many cases, you didn’t have to show your credit card until you showed up. Today, both entities seem to be copying the airlines to make it as onerous as possible for you to change plans. Yes, there are two sides to every story, and they have legitimate reasons for stricter rules, but it is what it is. Good luck trying to get an exception.
At any rate, the travel agents that Gates dogged have done okay. Yes, there was attrition, but as Chris Cahill, CEO of Accor’s luxury hotel brands says, “The crème rises to the top.” Those that are here today seem to be doing very well. It’s estimated there are about 100,000 travel agents in the U.S. today. Here in Las Vegas, there were over 5,700 attendees at Virtuoso Travel Week, including over 2,700 of the group’s travel advisors. Virtuoso is an umbrella for independently owned agencies that generate over $21 billion in travel sales. Not shabby for a group often labeled as dinosaurs. Still, Expedia, Inc., which now includes the likes of Hotwire, Hotels.com, Travelocity and Orbitz has grown both organically and through acquisition to $72 billion.
The agents, or advisors as they call themselves, have very few concerns about online competitors these days. Multiple research surveys show consumer use of retail travel agents – read human beings, has been on the rise for at least five years and is strongest with Millennials, a good sign for the future. Virtuoso’s CEO Matthew Upchurch says this younger consumer segment is very comfortable paying for expertise such as personal trainers, and view agents as folks who can help them improve the quality of their travel experiences. Booking travel isn’t as easy as Gates wanted you to think and as many of us have found out. Google’s own research shows it takes 32 visits to 10 different websites to book a single airline ticket. Add to that the OTA’s spotty record of customer service.
You might read this and say so what? I don’t use a travel agent, and am happy I am doing it myself. Well, you might want to reconsider. While agents are happy with their growing business and profits, a soon to be released survey of agents who sell luxury travel by Travel Market Report, a daily e-newsletter and website for agents, shows agents aren’t concerned about their future, but 73% are concerned that suppliers will be able to maintain service standards as the market expands.
Interestingly, Upchurch says a key reason to use agents is advocacy. In other words, when you use a travel agent, you have somebody who has relationships decision makers at the airlines, hotels, cruises lines and car rental companies you will be traveling…