Online Toll For Travel Agents Is Relatively Slight
Written by Candice Ventra on August 31, 2000
By Candice Ventra
Although on-line travel websites are becoming popular, traditional agencies will still be the place to book many trips for a long time, industry observers said.
Stephen Roof, attorney for the Internet practice group at the law firm Shutts & Bowen, said the percentage of people who make travel arrangements on the Internet is rising but business at conventional travel agencies is still going strong.
"By 2005, 10% of all airline tickets will be sold on-line," Mr. Roof predicted. "About 60% to 65% will be sold by travel agents."
In 1998, he said, about 2% of airline bookings were made on the Internet, according to a e=0 y by PhoCusWright, an Internet travel consulting firm.
Although on-line travel sites may not seem to pose a major threat now, Mr. Roof said, there is still pressure being put on travel agencies to compete with them. This is particularly true in the area of business or corporate travel, he said.
There are a few methods of handling a business trip. Mr. Roof said a company can have an in-house travel staff and get a 5% to 10% commission or can choose to contract with an outside agency that charges a flat fee plus commission.
Some corporations, Mr. Roof said, are putting pressure on outside travel agencies to find rates that compete with web fares, which tend to be less expensive.
"Corporate America is asking these agencies to get the lowest fares in the market," Mr. Roof said. "Travel agents don’t get commission when they sell web fares."
Although some agents search the web for fares, most don’t because it’s too long a process, he said.
Experts predict most brick-and-mortar agencies will eventually sell web fares to compete with on-line prices. Lee Dickson, associate dean of the School of Hospitality Management at Florida International University, said traditional travel agencies will remain strong in the market if their roles are redefined.
"I’m in favor of travel agents in the role of travel consultants as opposed to ticket sellers," Mr. Dickson said. "A lot of travel agents kind of got into the role of being ticket sellers."
Travel agents are at their best, he said, when they are developing complex travel itineraries and putting together innovative packages.
"If I just need to fly to Boston for a business trip I don’t need an agent," Mr. Dickson said.
Executives from some e-travel companies say on-line sites are more convenient for consumers. Despegar.com in Coconut Grove which targets the Spanish- and Portuguese-speakers offers a variety of services to consumers, including on-line bookings, said CFO Federico Fuchs.
"We don’t think the Internet will eliminate all travel agencies," Mr. Fuchs said. "We think that if some travel agencies don’t increase customer service and modernize, they will have problems."
The advantage of on-line service is that it is accessible 24 hours a day, seven days a week, he said. Also, Mr. Fuchs said, a site visitor doesn’t have to bothered with a pushy agent arrangements are made at an individual’s pace.
"On-line travel sites," he said, "are a lot like having your own travel agency. That power to the consumer is what puts travel websites at an advantage over travel agencies."
Despegar, Mr. Fuchs said, gives users editorial content on travel destinations and allows them to look for the cheapest fares via a proprietary search engine.
He said many travel agencies don’t offer this service.
"Travel agencies have not been the premier sector in customer service," Mr. Fuchs said. "It’s very fragmented and not as technologically advanced as other sectors."
Ray Casas, a principal at public relations firm Wragg & Casas, is one professional who still prefers the traditional method of making business travel arrangements.
He said once on-line ticket sales are made it’s not easy to change your mind.
"You have no flexibility with an e-ticket if you want to change your mind," Mr. Casas said. "On a business trip you might get done with a meeting early and want to move up to the next flight."
Also, he said, searching for a fare on-line is time-consuming. He said he prefers to let the travel agent do the research.
Mr. Casas said although he may go on-line to get ideas, there is no substitute for a well-informed travel agent.
Doug Schnetzka, a travel manager for AAA Travel Agency, said the Internet is causing competition for traditional agencies but brick-and-mortar companies have a personal touch that is unavailable on the Internet.
"On-line agencies definitely play a role in taking away business," Mr. Schnetzka said. "The way to compete as a travel agency is in customer service."