May 23, 2019

The Enduring Demand For Travel Agents

by travelshift

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With the rise of peer to peer booking platforms, ride-hailing services and the level of online savvy now achieved by the modern traveller, you can understand why some have predicted the decline of conventional travel agency services.

After all, travellers now have access to more choice than ever. And that access has never been as democratised as it is today. The internet is readily available to anyone with a smartphone and the vast majority of travel plans are now made digitally.

Yes, a handful of online giants dominate the global bookings and reservations market. But the scope of choice also extends to platforms specialised in certain destinations or trip types. It's also now more than possible to arrange and research trips without the need for an intermediary.

However, with all that choice and possibility comes confusion and indecisiveness. Faced with the world and the ability to choose from it, many travellers still want a level of refinement: a sense that what's on offer is being tailored to their preferences and organised in a way that makes browsing manageable.

At the annual Barclays Travel Forum this month, Deloitte’s lead partner for travel, Alistair Pritchard, suggested that there is an important role for travel agents to play in an era of "information overload".

He labelled the trend as “the return of the travel expert”. “They help navigate through efficiently through the digital overload,” he said. “We’re all used to using our phones but we also feel we’re overloading with information."

“Successful travel businesses, whether they're homeworkers, high street retail or call centres, all have one thing in common – they spend time with the consumer working out what they want from their holiday”.

In a complicated world, the experience and guidance of in-the-know agencies is even more important.

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Which brings us to research previewed this week entitled Generation Travel 2019. The study was commissioned by creative media agency eight&four. It suggests that consumers are more positive about travel agents and package trips than many will expect.

Positivity from customers toward travel agents

The research found that a positive perception of high street travel agents remains and that package holidays are still in demand despite the financial setbacks currently facing leading operators.

Almost a quarter (23%) of UK travellers said trip planning was quicker and easier with a travel agent. 21% appreciate the expertise and in-depth advice they have to offer. 23% feel agencies offer a more personalised travel planning experience.

Eight out of ten people of the 2,000 surveyed (79%) have taken a package holiday or are open to taking one in the future.

Interestingly, Millennials aged 25-34 were the most likely age group to have taken a package trip in the past year - (55% against 28% of Britons over 45). We often associate the younger generation with more original trips and adventurous travels, but it could be that budget constraints are seeing many opt for better value package deals.

A clue into why that demographic difference exists comes in the next finding: A quarter of those who have taken a package holiday (26%) saw value for money as the key benefit. 20% liked that all the organising was done for them and 18% enjoyed the peace of mind and protection on offer via Abta and Atol if anything were to go wrong.

The research also found that 23% of travellers opt for package trips to dangerous or difficult locations where independent travel might be challenging.

Caroline Brosnan, head of marketing at creative and media agency which commissioned the study, said: “High street travel agents could make a big comeback if they play the market right.

“Consumers on the whole recognise their value as experts and like the idea of speaking to a real person, which can sometimes be difficult with online travel booking sites.

“The key challenge to overcome is the perception that they are expensive. As recent results suggest, high street travel agents need to adapt their offerings to suit the information-hungry millennial audience and budget-conscious Gen Zs if they are going to weather the storm.”

She added: “The package holiday has reinvented itself as a relevant, budget-friendly option for young, price-conscious holidaymakers.

“As the number of holidays taken by 18-34s per year increases, the need for a hassle-free trip to be part of that mix has become really important – whether that’s enjoying the indulgence of an all-inclusive, choosing a flight and hotel combo to avoid endless paperwork or discovering new experiences offered by a specialist package holiday."

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The role of OTAs is shifting

These interesting consumer perceptions are happening at a time when high street and online travel agents are shifting focus.

Traditionally, the bulk of travel agents' revenue comes from accommodation bookings. But some of the industry's biggest players are realising that focusing on excursions and experiences can add value and diversify their offering.

Skift published some interesting thoughts from TripAdvisor CEO Steve Kaufer earlier this year, who has compared the push to make tours and attractions bookable online to the act of taking hotel rooms onto the internet in the 2000s.

In other words, big things are coming.

“You see great growth, or we think it’s great growth, in terms of online bookable supply,” he said during an earnings call in 2018.

“And we’re still overall at the tip of the iceberg. So when we look at how this attraction business, this experiences business can compare to the trajectory of bringing hotel booking online 20 years ago, we still see remarkable parallels, a similar margin structure. And it starts with collecting demand and supply, bringing it together, and that’s exactly what we’re doing.”

Here at Travelshift, we've known for some time that aggregating tour operators with accommodation and other travel services is the best way to build marketplaces that can compete with the big hitters.

You canread more about that here, by the way.

Skift also asked Kaufer about the price difference between accommodation and extras, and whether that would be a stumbling block for OTAs in the long term.

Understandably, he suggested that what these extras lack in cost they can make up in volume.

“Yes, there are the Motel 6’s and the 0 helicopter tour,” Kaufer said. “So on average, I’d probably agree the transactions are of smaller size (than hotels) — I’m not sure — but think about how many things you do when you are in-destination on a leisure trip.

And you are spending a comparable amount in in-destination food and activities as you do on the hotel, at least. Therefore, that’s a really big spend pie that we can help consumers with.”

Building travel marketplaces that give the people what they want

While building our now-booming travel marketplace for tourism in Iceland, we realised that the demand was there to share our solution with those who want to create similar success stories around the world.

From the start we have aggregated transport and accommodation with tours and excursions, alongside an encyclopedia of local knowledge and expert guides.

Ultimately, by giving travellers what they want (and by giving Google what it wants), Travelshift's marketplace software provides a personalised, informative and compelling platform for vendors to set up on and travellers to navigate through.

There'll always be room in the travel industry for platforms that give customers access to tours, extras, accommodation, expertise and advice. The key is to do that in a manner that befits the modern world, in a way that travellers can embrace with ease.

You can find out more about the Travelshift marketplace solution here.