Running in Cycles
By Mark Murphy
June 08, 2011 11:45 PM
Business often runs in cycles as do some partnerships. Take travel agents for instance. For many years travel suppliers doted on agents in the hope that they would deliver clients to airlines, resorts, ships and destinations. The term “partner” was bandied about as the key word in describing this relationship. Ironically, it was once heavily used by airlines that decided to step out of this relationship by divorcing themselves from travel agents in the 1990s.
In the years that followed industry observers had different views about the future of travel agents. Many said agents were going to go out of business for a variety of reasons, including the end of airline commissions, the growth of online travel sites, 9/11, SARS, H1N1 and the economic downturn. This was the down cycle when everyone thought suppliers would keep going to direct with an eye on the demise of agents.
But a funny thing happened on the way to the funeral. It turns out that consumers actually make the decision about where they would like to book. Sure, they can use the Internet to find a deal and book it themselves. If they are out of work, they have plenty of time to do that, but not a lot of money to spend when they do find a “deal.” On the other hand, those who do have a job are finding they are working harder than ever, which doesn’t leave a lot of free time to surf travel websites. But a different trend emerges when you take into account the overwhelming amount of travel information online, the limited vacation time people have today and the out of pocket cost. That trend is the re-emergence of the travel agency distribution channel that has weathered the ups and downs of the travel industry, as well as the hot and cold feelings of the travel suppliers they sell.
Smart consumers are turning to travel agents and smart suppliers are doing the same thing. For example, I recently sat down with Matthew Tippins, director of marketing for SuperClubs, to discuss some of the latest travel trends, including what’s happening with travel agents and distribution strategies. “We lost focus on the travel agent community for a brief time, and we are still trying to recover from that,” he admitted to me. “Ultimately, our refocused efforts, with new tools and programs, were designed with the travel agent community in mind. And our strategy forward is to rebuild and grow that relationship with travel agents.”
I also spoke with Imad Khalidi, president and CEO of Auto Europe, who gave me a different take on travel agents. He believes agents are far more important on a relative basis than individual consumers. “We pay far greater attention to the agent and meeting their needs because the value they bring us is far greater than any individual consumer who might book just a single time,” he says. Imad says he’s seen a sizable increase recently in Auto Europe’s percentage of agent bookings, another indication that the consumer is returning to the agency distribution channel.
In both cases, these suppliers recognize the importance in both reaching and engaging with travel agents in order to grow their business. As Tippins told me, even a short disengagement from agents can have a pro-longed impact on their bottom line. Even though things tend to run in cycles, as we are currently seeing, most travel businesses would be better served by staying engaged with agents through the ups and the downs.
Mark Murphy is president and CEO of Performance Media, parent of TravelPulse.com, Agent @ Home magazine, Vacation Agent magazine, Travel Agent Academy and Virtual Travel Events.