The Importance of Travel Agents

Technology is important in today’s travel industry.  Depending on the source market, estimates from the developed world range from 50% to 80% of bookings being made online or at least some element of research being conducted online before the traveler books her trip. 

Technology aside, it is still useful to remember that much of the leisure bookings to the Caribbean are still done by travel agents in North America and Europe.  The southern Caribbean in particular is heavily dependent on the UK market.  We especially benefit from packages sold by Virgin Holidays which is probably the biggest UK tour operator for this part of the Caribbean and it sells most of its Caribbean package holidays through travel agents.

But travel agents themselves are under pressure and they know it.  Traditionally, they ‘owned’ the relationship with customers.  So owners of travel inventory, such as hotels, car hire companies and airlines, knew they had to work with and through travel agents, to ensure that their product ends up in the hands of consumers.  The value chain however, continues to evolve as more and more customers are being enticed to bypass travel agents and book directly with travel inventory owners.  Hotels and airlines especially have been using attractive websites and ‘best price’ guarantees to win direct sales and by pass the trade.

The steadily declining membership numbers of the American Society of Travel Agents (ASTA) is testimony to this technology trend.  In December 2010, the recently appointed CEO of ASTA, Tony Gonchar, noted that his biggest challenge is to make sure that ASTA remains relevant.  But airlines and hotels will not make it easy for him.   American Airlines, the world’s largest airline, has recently won a landmark court case and is now free to pull its fares from online booking engine – Orbitz.  The net effect (pun intended) of this victory is that American Airlines will be able to sell more of its seats through its own technology as opposed to through third parties.  Following suit, Delta pulled it flights from three travel aggregation sites, including BookIt.com, CheapOAir.com and OneTravel.com.

Some say that there is similar trend in our local travel agency sector.  Over the past few years, travel agents have been impacted by carriers such as British Airways and American Airlines moving to 1% commission thus ensuring minimal price differences between their websites and travel agents.  To earn a living, local travel agents must levy a service charge like their counterparts up north.  Regional carrier LIAT switched some years ago to a platform which made it more difficult for travel agents and easier for customers to book directly with credit cards.  A couple months ago, our local travel agents were impacted by Caribbean Airlines’ decision to briefly offer a 5% discount for seats sold over its website.

For consumers, this competition between the owners of inventory (hotels and airlines) and travel agents (both online travel agents and offline ones) should mean that if they are willing to shop around, customers can save money and get great deals.  But as with everything, there is a flip side to it.  The best example is probably the recent heavy snow falls in the North Eastern United States and in London.  Thousands of flights were cancelled and hundreds of thousands of passengers were inconvenienced by the inclement weather.Fatca Compliance Singapore

The stranded passengers fell into two categories – those who booked direct and those who booked through an agent.  Those who booked directly with the airline, spent time trying to get through to inundated call centres or in very long lines at the airport, trying to get on the next available flight.  So many missed their Christmas gatherings or will not be getting back to work on schedule.  Those passengers who booked with the better, more proactive, travel agents however, received calls from their agents.  Their agents helped them get on the next flight or rerouted them where possible.

The reverse obtains during the hurricane season here.  On one hand, those UK passengers who do book through tour operators like Thomas Cook, Virgin Holidays and British Airways Holidays, are contacted directly and alternative arrangements are proactively made.  On the other hand, those passengers who may have saved a few pounds by booking direct, are more or less responsible for handling their rerouting etc without the additional support provided by an intermediary.  This is just something to consider as we book our next trip.

My name is Derren Joseph and I love my country.   God’s richest blessings to you as we enter the New Year.  As always, I end by saying that despite our challenges, we are so blessed to live in this beautiful land.  Let us continue to have the audacity of hope in the future of our beloved country. 

Derren is a travel and tourism consultant.  The views and opinions expressed here are solely the views of the writer and do not necessarily reflect the views of any company or institution affiliated with the writer.

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