Is This the End for Travel Agencies? Or a New Beginning?
Over the past decade and half, seldom has a month gone by without the news heralding the demise of the retail travel agency business. CNN reported that there are about 13,000 travel retail locations presently in the United States, down from a peak of 34,000 in the mid-1990s.
Emboldened by the closure of several brick and mortar travel agencies which defined store front travel agency business - especially in mature travel markets - the proliferation of OTAs / supplier direct web sites, the devastating effects of 9/11, the economic recession which still burdens many parts of the world, the emergence of the independent, brand-disloyal travellers accustomed to instant gratification and the ensuing continued share shift from offline to online channels, pundits the world over have been sounding the death knell for the retail travel agency business model.
As of late, this commonly held perception has been slowly but steadily changing. Some of the online players are increasingly recognizing the role of the retail agency as an important channel for travel bookings. Agency bookings now constitute a significant percentage of the bookings done on supplier direct websites. According to Skift, a leading travel industry forum, 41% of U.S. travellers who haven't used travel agents are saying that they're open to the idea, the agent industry sees major growth potential in market share.
In the author's opinion, there is an increasing discovery of the value a retail travel agency can bring albeit a different sort of value from its traditional value offering. A turning point is currently at hand in the industry, provided retail travel agencies can remain unencumbered by some of the fundamental weaknesses that have long conspired to bring the business to its knees. At least in certain key travel markets, there is a palpable sense of excitement on the shape the travel agency of the future is likely to take. It is almost as if a second chance has been presented. To paraphrase Mark Twain, it seems that rumours of the demise of the travel agency have been greatly exaggerated.
If the travel agency has not yet had its day, what then? Using next generation IT solutions and the agile provision of services, travel agencies are poised to leverage their natural strengths to overcome the challenges before them.