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AIR TRAVEL Agents lose advantage in bookings for flights



Published: Mon, February 10, 2003 @ 12:00 a.m.



Still, a good travel agent can provide added services an online ticket site can't.

By JAY CLARKE

KNIGHT RIDDER NEWSPAPERS

Now that most airlines have stopped paying them commissions and travel agents are charging their clients a fee, travelers are facing a new challenge: Should they continue to book flights through agents and pay anywhere from $20 to $40 for that service, or should they book on the Internet or directly with the airline for free (or nearly so)?

For Kevin Sepe, who travels frequently on business, it's a no-brainer. "I need the service a travel agent provides. I may have a quick change of plans, or have to rush back to the office, or go to a different city. She understands what I need and want," said the Miami marketing consultant of his longtime travel agent, Doris Green of Nina Travel Service.

For business travelers with uncertain schedules, use of a travel agent is not just a safety net but a time-saver. But what about leisure travelers, the couple planning a weekend getaway, the family looking to fly to the home of relatives?

Better pricing

James Jude, a retired Miami surgeon with a large family, used to arrange his travel through an agent, but now he books most of it electronically.

"You can't get the price from agents that you get on the Internet," said Jude. And when he books online, he doesn't have to pay the $25 a ticket an agent would charge.

Jude still uses a travel agent occasionally but says that in the past year, he has gradually shifted over to booking online. The main drawbacks, he says, are that booking online takes time and tickets are difficult, if not impossible, to change on the Internet.

But Jude is content doing it this way, and he has plenty of company. In a survey last May, Accenture, a management consulting firm, found that 63 percent of summer travelers planned to book their flights electronically, either through an online travel service or an airline's own Web site. Only 22 percent said they would book through a travel agent.

Those trends are confirmed by a survey by the Travel Industry Association of America, which found that in the past three years, the proportion of U.S. travelers who use a travel agent fell from 32 to 26 percent. The TIA attributed the shift to increased use of the Internet.

Savings all around

The reason's simple: Price. Online fares can be cheaper than those offered by a travel agent -- and sometimes less than those available from the airline's own reservations line.

Such discounting is a deliberate tactic by the airlines to encourage travelers to book electronically, which costs them only about $3 a ticket -- far less than when a human is involved. And although online booking agencies have begun charging travelers a per-ticket fee (usually $5-$10), the amount is still considerably less than an agent would charge.

Those are powerful incentives for travelers to book their own flights, but there are tradeoffs.

One of them, as Jude pointed out, is that searching for low fares on the Internet takes time. Each airline has its own Web site, and there are several online booking agencies, each different in content and operation.

"I'm taking my family to Los Angeles, so I went on the Internet, checked out Hot Wire, Travelocity, Expedia, Priceline, Orbitz, American Airlines, Delta and Northwest," said Gary Knowles of Madison, Wis.

"I finally got a $303 round-trip fare from Madison to Los Angeles -- a good price -- but I spent eight hours online to get it." Travel agents can make such a fare search in minutes.

Getting advice

Another factor, agents say, is that average travelers may not be aware of such cost- and time-savers as alternative airports, packages that can reduce total trip outlay, flights that are often late and cause missed connections, and other factors that may affect their travel.

"The agents also can remind you about discounts, special fares for kids, arrange hotels and cars, tell you about tourist attractions," said Lila Tell of the New World Center travel agency in Miami. Moreover, she said, a traveler who books online has no intermediary if anything goes awry.

"If there's a problem, you have no one to turn to. Who would you call? Mr. Orbitz?" said Tell, who, like other agents, has helped put stranded clients into airline-paid hotel rooms and interceded on their behalf in disputes.

On the other hand, agents readily acknowledge that a simple flight to and from a destination does cost less if the traveler books it himself. "If it's cheaper and you know you won't have changes, we say go for it," said Green.

That's brave talk, because in this commissionless world, travel agencies need all the business they can get. Their ultimate survival, however, may depend more on how well they serve their clients.

Specialization

"In the long run, where we were agents for suppliers before, now we are agents for the clients," said Jack Guiteras, president of Lorraine Travel in Coral Gables, Fla. And to serve clients best, he says, agents have to develop a feature that makes them valuable to consumers. "I think specializing is probably the best strategy," he said.

Guiteras' company, for instance, is a member of Virtuoso, an upscale consortium of agents that gives each agency more clout with travel suppliers. Through Virtuoso, Guiteras' clients can enjoy such perks as their own tour escorts, private receptions on cruises and space-available upgrades.

Another successful agent, Marshall Harris of Harris Travel Service in South Miami, specializes in making trip arrangements to suit his independent, upscale clients. For a vacation in Europe involving trip planning, hotel reservations, car rentals, train travel, sightseeing tours and other elements, for instance, he will charge about $150. (For a simple air ticket, he charges $20, maximum of $60 per family.)

To survive, many agencies have reshaped their business to concentrate on suppliers who still pay commissions -- cruise lines and tour operators among them. Coincidentally, this is where agent expertise is especially helpful to travelers. No two cruise lines are alike, and a good agent can steer a vacationer to one he'll be happy with. Through experience, agents also know which tour operators are the most reliable -- something about which the average traveler hasn't a clue.

Personal tastes

Beyond that, some travel agents develop specialties closely akin to their own likes. "I know of one who specializes in African safaris, another in diving," said Green.

Even if an agent doesn't narrow his focus, his general knowledge can point travelers in the right direction. "If I'm going to Las Vegas on a leisure trip, say, there are offers and packages I'm not familiar with," said frequent business traveler Kevin Sepe. "She [the travel agent] knows what deals are on. I don't have to look at every single hotel deal. I don't mind the extra $25 it costs. It's worth the time I save."

Agents are also turning to net fares to get lower prices for their clients. These are low nonpublished fares the agent obtains through a consolidator or by negotiating directly with an airline. The agent then resells the fare to his client, adding a profit margin of perhaps 20 percent. Even including that markup, however, the client still pays less than the published fare.

Such knowledge of the workings of the travel business is what makes agents valuable to consumers. But this pool of knowledge is thinning -- another fallout from the elimination of commissions.

Airlines, too, are pulling back. "Airlines are reducing support staff; there's nobody to answer the phones. They're closing city ticket offices. That means you have to go out to the airport and stand in line when you have ticket changes, etc.," said Harris.

Meanwhile, online bookings continue to grow, even at Southwest, one of the few airlines that still pays commissions. "Bookings on our site increased 28 percent in 2001 over 2000," noted the airline's Melanie Jones.

At American Airlines, 12 percent of flights are booked on the Web and 15 percent with the line's own reservationists, according to Martha Pantin, the airline's spokeswoman in Miami.

Presumably, agents booked the other 73 percent.

"Agents are important to us," she said.

That brings a bitter laugh from travel agents, because they are being driven out of business by the airlines' elimination of commissions.

Since the first pay cutback in 1995, a third of the nation's 36,000 agents have shut their doors.

If that trend continues, they ask, who'll be left to take the consumer's side?

Good question.




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