Blog homeJeremy King suggests that I am getting a little over excited in suggesting the end to travel agents as a sustainable business concern (see comment on this site). He says he has heard it all before – a bit like the famous Mark Twain quote - ”the report of my death was an exaggeration”.
Firstly lets define agent – I think it comes down to “one who is authorised to act on behalf of another”. In general, travel agents currently act on behalf of the principal travel company (the tour operator, airline, hotel etc). Likewise, actually many tour operators are also travel agents – in that they book flights, hotels etc on behalf of clients – so from a structural definition there is little to separate them.
However, I use a more practical definition – if something goes wrong on a trip – where is the final point of responsibility? Wherever that is – they are what I define as the tour operator. Anyone else involved in the selling process – is an agent. You can be involved in the marketing process without being an agent. (For example a web affiliate markets on behalf of a tour operator – but the sale takes place direct with the tour operator – not via an agent – therefore the affiliate doesn’t have to be bonded or checked to be financially secure – as they are not handling client money or forming any part of the contract with the client)
Tour operators also tend to have staff running the tours – but this is not always the case – sometimes that is contracted out to a “ground handler” – again blurring the distinction between tour operator and travel agent.
What are travel agents good for?
Travel agents tend to be very good at matching product to an individual. This comes from historical background in that they would have an individual walk in off the street – or phone up – and the agent would have to match a product from their partner’s inventory to this individual. (Conversely, tour operators had smaller numbers of products, and would look to find customers who match their products – i.e. making it a marketing challenge – rather than a search / matching challenge)
The future of travel agents
Taking this logically forward I therefore believe that the future of the travel agent is tightly bundled with how search works on the web. For example with niche (vertical) search engines such as CheapFlights, Dohop and others – these are the companies that are now undertaking the search and suggest function on behalf of customers – not the travel agents. Therefore for “search and suggest” style travel agents I don’t believe the future is that good.
Any good news for agents?
Yes. There is a second kind of travel agent – and they are niche travel agents. Not only have they survived the evolution of the web (so far) but they are thriving. This is because they are needed by the large travel companies – just like traditional travel agents used to be needed.
For example say you are a hotel reservation system company and you have 30,000 hotels globally. This sounds good – and probably is – but all you really have is a sales platform. It is very difficult to get people to want to book these hotels. However, a niche travel agent could specialise in hotels in Manchester, or hotels next to airports – or whatever it is – and only take 500 of of the 30,000 hotels and market them. These niche agents know their own sectors very well (and are experts) – and can then effectively promote the products they want to promote. Once the reservation system has 100 niche agents using it, and if each niche doesn’t overlap too much – very quickly many of the hotels are sold regularly.
These niche agents can actually take a little jump and become a tour operator in their niche. As I wrote earlier, the actual distinction between a tour operator and a travel agent is blurred – therefore this is less of a jump than you would think.
Another route is that the agent becomes the agent of the customer, rather than the agent of the travel supplier. I don’t know much about this (having no experience of it) – but it could happen. I guess it is a little like, from the consumer’s perspective, paying for a personal shopper. Again though I think that the web may not make this practical, at least in the long term, because as a consumer you are paying for a search – so this may be more effectively done online.
Summary
If you are a “search and suggest” offline travel agent then it is almost game over. If you are a niche travel agent – you now can make use of all that expertise you have built up over the years – go online – and compete with the big travel companies. They won’t be able to match your expertise and knowledge – and you will thrive.
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