Mark Twain’s famous, “the report of my death is an exaggeration” quote certainly applies to the travel agent and the traditional travel agency business model. The retail travel agency community has sustained considerable losses due to the combined impact of the rise of the internet, industry consolidation and the economic downturn – 30% of retail travel agencies have closed since 2000. Despite the hardships, a new breed of smarter and more innovative travel agents is evolving.
Forrester Research recently reported that there are 15% fewer travelers who enjoy using the Web in 2009 than there were in 2007. Many are seeking the expertise of offline travel agents able to provide relevant recommendations, expert validation and most importantly, a time saving rescue from the labyrinth of internet travel sites.
The challenges facing modern travel agents are not unique to the travel industry. The relationship between agencies and their clientele is under duress across all industry verticals. Avoiding the impassioned and emotional specifics that illustrate the travel agent’s plight, a slightly higher level perspective is required – how the internet impacts the Agency-Client relationship across all verticals – not just the travel space.
Traditionally, agencies have been required to provide specialized expertise in their respective discipline – travel, real estate, insurance, advertising, etc.
The best agencies always offered:
- access to information that was not otherwise readily available to the client, and
- the ability to both develop strategies and apply tactics that were tailored to the client’s specific future goals, available resources and current circumstances.
The internet has dramatically changed the environment and travel websites now compete (with a relatively good degree of success) with traditional travel agencies.
Expedia and its brethren have not eliminated travel agents, but with broad access to travel pricing, inventory, descriptive & multimedia information for thousands of destinations, online travel agencies offer product well beyond even a great agent’s reach a dozen years ago.
Similarly, Zillow has not eliminated real estate agents, but it has armed homebuyers with information that was previously only available through an agent.
Esurance promotes an accurate rate quote in six minutes, hundreds of dollars in average savings and access to other providers if Esurance did not offer the lowest price. Again, a good step beyond a traditional insurance agent’s breadth of product.
In each case, the Internet has enabled consumer-driven product search and returned available product. In many cases, the websites also enable filtering of alternatives based on product attributes. The Internet works particularly well for comparison shopping among commoditized products. As many travel suppliers have unintentionally commoditized their products, this has helped accelerate the growth of many travel internet sites.
The internet does not work well yet (assuming the promise of semantic discovery is fulfilled) for identifying the best strategies & tactics based on a myriad of inter-related conditions. This is why quality agencies will continue remain relevant for the foreseeable future. Travel planning can be a complex exercise, with decisions based on intensely personal motivations. The challenges increase geometrically as additional parties and/or destinations are added to the itinerary.
Iindividual travel agents and agencies that served merely a transaction processing or order taking role quickly become redundant when compared to online travel sites. If one does not provide incremental benefit at an appropriate cost – i.e. create value, any system or process seeking efficiency will eliminate the resource drain. The travel industry provided a perfect case study.
As a result, many marginal agencies closed. Those that remain now continue to provide value by 1) clearly understanding customer needs, 2) providing specialized knowledge regarding available solutions, 3) creating strategic and tactical travel plans that efficiently and cost-effectively align and prioritize those solutions to best address the customer’s needs. These are the very traditional hallmarks of quality travel agencies – traits that are also embodied by their front-line agents.
The agencies that will flourish in the future will be more customer focused, nimble, flexible, and intelligent than those that merely survive by being relegated to providing generic services at commodity prices.
Exceptional agencies will be able to compete effectively against internet-based services, but it will not be easy. New technologies, social computing and semantic search will continue to enhance communications and make increasing amounts of information available to more people with a lower cost and time investment.
While many may say these advancements signal the demise of any function with a title including the term “agent,” I disagree. These same technologies can also enhance the capabilities of the innovative agent or agency by creating opportunities across diverse geographic regions and/or market segments. The smart and resourceful travel agent will embrace the latest technologies, develop strong social networks and maintaining their primary focus on the customer.
The greatest opportunity for success will be for those agents and agencies specializing in specific niche markets or addressing highly complex or challenging needs – at a reasonable level of compensation. Travel suppliers, major online travel agencies and large corporate travel agency groups will satisfy a considerable portion of mainstream travel needs. However, those agencies with the best agents can continue to build a large and loyal following by providing exemplary customer service throughout all aspects of the trip planning and travel experience life cycle.
Agents will need to work harder and smarter to earn compensation from customers presented with an unlimited array of free travel planning tools. The days of agencies milking the cash cow client – getting paid big for relatively little effort – are gone. Value is king, but that does not mean the cheapest cost wins; the world is seeking quality product at an affordable price. While “free” buys traffic, most internet companies have learned that charging for legitimate premium services is a viable business model.
A great example is Stacy Small, the Owner of Brentwood, California based Elite Travel International. Her niche is luxury and she excels at it. Like most agencies, she has a website. She also has a blog that allows her to present her perspective on topics that her audience may find of interest. Recent blog posts have included updates on luxury travel pricing trends, recap of a recent trip to Peru, and Small Luxury Hotels supporting her Birthday Breast Cancer Research fund raising campaign. The blog helps drive engagement with her clients and followers and drives business via links to her website and office via telephone.
Stacy is also known as @elitetravelgal on Twitter where she has 6,200+ followers and has tweeted over 15,400 times. She has generously shared her expertise with no strings attached. She has created a community and fan base. Her twitter account helps drive traffic to her blog and website, but as she also follows back over 4,900 followers, she can also receive direct messages. She does not aggressively pitch her services or spam her followers – she respects them and listens to them.
EliteTravelGal does not trade in deeply discounted fire sale product. While she is always on the lookout for the best deals for her client, she seeks the greatest value, not the lowest price. She thrives in a market segment that has been abandoned by others – Luxury Travel. How does she do it? Stacy adds value. She knows the luxury product and the needs of the luxury traveler. She travels extensively to gain first hand experience with new destinations. She knows the right people to contact to get her clients upgraded in the best hotels and how to get special amenities delivered to their guest rooms. She provides outstanding service delivery and only works with travel suppliers that offer a similar level of consistent service. She is smart, creative and passionate about travel.
One important note – Her first blog post was one year ago and Stacy has been on Twitter less than a year. That is a lot of progress over the course of one year. Stacy did not sit back and wait for the economy to rebound. She did not retreat to solicit a mid-market client. She focused on what she knew best and expanded her territory to attract new clients. Her new territory is global.
She now has clients that she has never met face to face, but they trust her nonetheless. They have shared and interacted with her – they know her personality, some of her causes and her perspective on luxury travel. Many brick & mortar travel agents lack this degree of engagement with their clients. Stacy epitomizes the new breed of successful travel agents.
Smart, experienced agents have been providing great value for years and there is every reason to believe that with a little creativity and hard work, they can continue to do so for a long time into the future. They do not fear or complain about the advancement of technology, they embrace it. As Charles Darwin so eloquently stated, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”