Who You Gonna Call?
Conventional wisdom in business often doesn't match reality. There are plenty of examples in the hotel industry. About 20 years ago, the advent of teleconferencing was thought to be the death knell for the hotel business. Why would anyone travel to meet with a customer when they can see him or her face-to-face on a screen? As we all know, that bit of wisdom never panned out. Sure, some minor meetings can be held via teleconference, but nothing beats a face-to-face, handshake-to-handshake sit-down with a customer, a prospect or, in my case, an interview subject.
About 10 years ago, when the Internet began to take hold as a powerful business tool, particularly one to make travel reservations quickly and at the lowest prices possible, the word came down that the travel agent was dead. Why call a clerk at a travel agency to book your flight and hotel room when you can do it as quickly yourself and probably be able to uncover that hidden special fare or room rate?
A number of agencies, particularly mom and pops, did fall by the wayside and, as a result, a lot of hotel companies and directors of sales and marketing at individual hotels believed the hype and stopped getting their messages out to this once-dominant distribution channel.
But new research shows that the travel agent is alive, well and in many cases, doing gangbuster business. The business model has changed, and hotel marketers need to understand how they can exploit the new paradigm.
A report from PhoCusWright, an industry research and consulting firm, claims that travel agencies account for nearly $110 billion in sales, or 41 percent of all travel booked in the U.S. Far from being extinct, the agency business in the U.S. has more than 24,000 locations and 100,000-plus workers. That's 100,000 sources of potential business for hotels that are astute enough to market to them.
As the report points out, the agency landscape has changed dramatically and today represents “a dizzying array of retail business models, from corporate to leisure, from extreme specialization to general purpose, from large, global corporations, with thousands of employees to thousands of independent small business owners and a surging population of self-employed entrepreneurs working from home.”
How these new-styled agencies work also differs from the past. While the GDS has been the standard way agents book air seats and hotel rooms, PhoCusWright says “key segments of the agency community are turning away from the GDS to supplier websites and other online tools to research and book product.” By next year, 21 percent of all agency sales will be booked online, another key fact as you plan marketing campaigns to this group.
As with many things, consumer behavior may ultimately reinvigorate the travel agent business. Last month, as several airlines suddenly went out of business and American Airlines temporarily pulled part of its fleet from service, thousands of stranded passengers who booked their travel online without travel agent help had nobody to ask to help them rearrange their schedules. Those travelers with agent back-up had the support they needed. Increasingly, when stranded travelers ask, “Who you gonna call?” the answer will be, “my travel agent.”
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