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Looking for answers?

August 6, 2009

Looking for Answers?

By Mark Murphy
Published on: August 6, 2009

Looking for answers? Maybe it’s time you looked to travel agents. Whether you’re a consumer interested in exploring your next trip, or a supplier or destination trying to get the most out of your shrinking marketing budget, travel agents should be the answer.

First, how big is the travel agent market today? When it comes to selling leisure travel on cruises and tours, as well as direct to resorts, travel agents produce the vast majority of revenue. Suppliers in these segments know their actual numbers first hand, but research companies like PhoCusWright have confirmed these facts as recently as the Travel Agency Landscape Survey, which produced in 2008.

Indeed, travel agents produce more than 70 percent of all cruise, tour and resort bookings, according to that survey (and often much more than that depending on the category. Again, suppliers who track their actual revenue sources can confirm these numbers themselves. PhoCusWright estimated the total revenue booked by travel agents at $110 billion annually just 15 months ago.

Of course, it’s not just a matter of knowing how much revenue agents are generating. The real issue has always been how the decision to travel is actually made. Put another way, who or what influences the consumer to choose an actual travel product or a destination? Well, for those people who have used a travel agent, the influence that agent has on their decisions is growing, contrary to what some suppliers or destinations might believe.

The recently published 2009 Yankelovich Travel Monitor answers the question about agent influence once again. Of those consumers who used a travel agent to book a trip, 62 percent stated that the agent was “extremely or very influential over their choice of vacation components.” That’s up from 56 percent in the same survey last year, a substantial increase in the degree of influence that travel agents have on their customers’ travel decisions.

Let’s take a look at the economic impact of that influence. If travel agents sell $110 billion in travel, as the year-old PhoCusWright survey stated, you could quickly apply the 62 percent against that for a rough estimate. To be truly accurate, you’d have to take that influence, break it down by category, and apply it to the revenue category to truly get an accurate picture. No matter you approach it, however, travel agents are driving a significant amount of revenue to specific suppliers and travel product categories — period.

So how do you account for the still pervasive feeling in this industry that travel agents remain outdated and unable to market or sell travel, as some would have you believe? It is a truly remarkable perception given the stream of facts and numbers that continue to come out of research companies like Yankelovich, PhoCusWright and others. The word delusional comes to mind when I think of some of the comments I’ve heard over the years from those who were truly convinced of the impending demise of travel agents.

For those suppliers and destinations that still sit on the sidelines when it comes to effectively marketing to travel agents, let me point you to one more article that just appeared in Monday’s edition of The New York Times. The title is “Worst Part of a Trip May be Booking It on the Web”. In it, Henry Harteveldt of Forrester Research states: “Travel companies expect the consumer to behave like a travel agent. The question I always ask these guys is, ‘Could your mother-in-law use your website without having to call you for help?’ The answer is always no.” In fact, Harteveldt said a growing number of consumers appeared to be interested in using an offline travel agency, if they could find one.

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