Travel agents wrestle with Web's impact
Editor's note: Second of a two-part series.
By Bob Retzlaff
The Internet has exploded with growth. And more and more travelers -- business and leisure -- are looking for and booking bargains there.
The impact on the travel agent community has been off the charts. In fact, most agents are utilizing the Internet themselves to find bargain fares for their clients. "The bargains are there, although not all of the time," one local agent said, "and we have lost some business."
While some agents concede that the Internet is winning the battle for the budget-minded leisure traveler, that traveler hasn't been the industry's most lucrative customer anyway.
But to several Rochester travel agents, not all of the increased Internet use is bad.
Nancy Wortman and Jamie Flott, who manage Rochester's two largest shops, AAA Downtown and Greenview, say the Internet has assisted them in many ways. AAA agencies were among the several surveyed by Travel Scene to learn the impact of recent events on the local travel agent community.
"There's a wealth of information on the Internet that we use and incorporate as a sales tool," Wortman said.
Carol Dougherty and Pat Benson at Horizon Travel said their customers are now "better informed about their options, and that's a good thing. And we don't have to spend as much time educating them."
Adler's Judy Strunk said, "We have lost some business, but most of our clients aren't interested in searching the I-net and want to do business locally."
Reported Carol Renken of Carlson-Wagonlit Travel: "We get calls from people who can't find all of the information they need on the Internet."
But the Internet has some strong downsides, too, said Jan Durbahn of Stewartville. Durbahn runs her own travel agency solo. "The Internet has affected me big time. I have clients who want me to research lots of options and then they use that research to book their own vacations. Maybe I've got to learn to be less helpful."
That situation -- which Durbahn calls an "abuse" -- may spark a trend for agents to charge upfront fees, which then could be applied to the price of the tickets. Adds Mary Norland of Hobbit Travel in Rochester: "It will be no surprise to me if that happens."
In recent months, the travel agent industry has taken huge hits, ranging from the nation's lingering economic downtown to the aftermath of Sept. 11, with zero airline commissions and increasing use of the Internet thrown in.
These factors have changed the way agents do business: There is increasing focus on the sales of group vacations and cruises, along with a new emphasis on customer service.
The latter is at the forefront of AAA agency efforts, the two local managers say, and customer service training rates high in priority.
AAA policy emphasizes such service as unbiased information, choice, expert guidance, lowest price review, convenient one-stop shopping, professional advice, personalized service, quality control software for constant monitoring of fare reductions, 24-hour emergency services and other qualities.
Other local agencies also point to customer service as a necessity for keeping customers and improving the bottom line. All zero in on customer service to some degree.
All agencies also feel the need to become more diverse, changing their focus from airline tickets just a few years ago to other segments of the business now.
The stakes are huge.
Travel/tourism is either the nation's No. 1 or No. 2 industry, depending upon what survey is published, and it's estimated to account for more than $550 billion in sales annually. It generates $100 billion a year in taxes.
One industry publication noted that when it comes to travel distribution, traditional travel agents are still the whales, and all other methods collectively amount to a school of goldfish.
To every segment of the supplier community, travel agents represent billions of dollars of revenue. According to the a recent Travel Weekly U.S. Travel Agency Survey, travel agents were responsible for $26.5 billion of revenue for the cruise lines.
They booked $16.4 billion on behalf of hotels, took reservations representing $11.2 billion for car rental companies and produced another $11.9 billion for tour operators, travel insurance companies and miscellaneous other travel suppliers.
All of these sales resulted in commissionnable income -- 15 percent and up in most cases -- to travel agents.
Cruising sales in particular are now becoming a more significant profit center for agencies here and elsewhere.
At the recent cruisefest conference in Miami, sponsored by the American Society of Travel Agents, ASTA president Richard Copland said that the future for travel agents lies in cruise sales. Travel agents write about 95 percent of cruise bookings now and that type of vacation is becoming more popular. And cruises are a big-ticket commissionable item.
Group bookings are becoming more of a way of life, too. Durbahn recently wrote a group reservation for a wedding in Hawaii. "It's fun to do that kind of business, especially to be in on the planning," she said.
As another way of boosting sales, Hobbit Travel puts more focus on its exclusivity contracts with various travel suppliers. Increasing sales in that direction "helps us a lot," Norland said.
When will the industry get back to normal?
Nationally, trade projections are that agency business will not return to normal until 2003.
But beyond that. What's the future for the industry?
Most agents here are optimistic. "It will be exciting and challenging," said Horizon's Benson and Dougherty. AAA managers Wortman and Flott predict that smaller agencies may close or merge with others, but the industry will survive and become stronger. The current situation is leading to a paradigm shift, they believe.
Said Carlson's Renken: "No matter what happens, we'll survive." But to Stewartville's Durbahn, the future is scary. "People are using and abusing the system; it's more all of the time. But I'm hanging in there," she said.
Bob Retzlaff is travel editor of the Post-Bulletin. He can be reached by phone (507-285-7704) or e-mail (firstname.lastname@example.org).