Blog homeA “long time ago” (not that long really) agents used to be agents on behalf of suppliers (like tour operators, airlines, hotels etc). However a trend has started where commission paid by suppliers to agents has reduced down to a minimum (or indeed to zero for some suppliers who have “gone direct”).
The working assumption would be that agents would start to charge consumers a fee for making use of their booking services and wide product and destination knowledge. This would lead to agents becoming agents of the consumer rather than agents of the supplier. Either that or go out of business.
Where is this taking us?
One recent aspect where this has had an effect has been screen scraping. Previously a supplier could have controlled the behaviour of “their agents” as there was some form of contract in place.
Now agents act in the best interests of the consumer – regardless of the impact this may have on suppliers. Having a good working relationship with a supplier is no longer so important to an agent.
Indeed where agents are competing to be as pro-consumer as they can this could lead to behaviour that suppliers wouldn’t appreciate.
What other pro-consumer, anti-supplier, functionality may we see over time?
Last minute cancellation and rebooking may be consumer friendly yet somewhat unhelpful to suppliers. For example an agent may make a hotel reservation using the ”reservation model” (i.e. the customer pays on checkout and the agent invoices for commission subsequently). Normally reservation model bookings have lenient cancellation policies – in particular for bookings cancelled giving a few days notice.
What would happen if agents started making reservation model bookings in order to have a booking “in the bag” – and then, right up to the travel date, hunted for better deals (maybe even for the same hotel). If the agent found one they may be able to book a new hotel room (perhaps using the merchant model with upfront payment) and then cancel the reservation model booking.
This would be very helpful to a consumer but suppliers would be upset quite quickly. Not sure what the supplier could do about it though if they have no financial levers they can pull to stop this kind of agent behavour.
Industry associations are in a dilemma
This leaves industry associations (for example ABTA in the UK) in a bit of a dilemma. Basically the industry will split into two – those who are remunerated by selling product (suppliers mainly) and those making an income from advising customers (the new agents).
As there will be no need for any working relationship between agents and suppliers - but everyone will be members of the same association – I can see that the industry associations will be kept busy with internal squabbles. Not sure this will help when these industry associations are trying to act with a single voice representing travel industry to Government etc.
This is different to how it was recently as agents and suppliers at least had to do business with each other – so there was a common thread hence having a common industry association made sense.
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