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Travel Agents and Tour Operators: Thriving in the Digital Era

July 23, 2015

Travel Agents and Tour Operators: Thriving in the Digital Era

July 23, 2015

New technology, including more sophisticated reservations systems and the ever-increasing capabilities of the internet, present a huge challenge to the future of travel agents and tour operators.

As a bigger portion of travel and tourism products are purchased or booked directly from the ultimate suppliers (airlines and hotels) or mega online booking engines, traditional travel agents and tour operators need to reinvent themselves. If they do, they will not only survive, they will thrive and prosper.

The statistics point to a promising future:

  • In the last 20 years, travel agents’ share of airline bookings shrank from almost 100% to somewhere around 50%. However, that share has been quite stable for the last five years
  • Low-cost airlines, which ten years ago didn’t have any relations with travel agents, now let them book in their systems and even pay incentives in many cases, especially when they want to open new routes and become international
  • While around 70% of domestic bookings are done online, 70% of international flights are booked through travel agents
  • The number of travellers around the world is growing by more than 5%, which means tens of millions are added every year
  • After a big drop in the number of travel agents in regions with dramatic increases of online bookings, their number is now stable or growing.

There is an obvious behavioural phenomenon: the more complex the travel arrangements are (distant destinations, more than one destination in a trip, special needs, full packages, etc.), the more inclination by the traveller to use a travel agent.

On the other hand, as travel becomes a commodity, travellers tend to demand more of their travel experience.

Therefore, travel agents and travel operators who make themselves propose real added value will increase their business and receive premium fares for their services.

Nearly all corporate travel is handled by specialized travel agents who charge nice premiums for their services, in many cases, based on the complexity of the travel arrangements and scope of services needed.

Outgoing travel operators create unique packages to traditional destinations and find new and exotic destinations for a growing number of eager customers, who are ready to pay handsomely for them.

Incoming travel agents and travel operators are growing in numbers and business volumes as they supply a full range of services. They are finding benefit in creating trust and confidence with the end customer, especially when first-time visitors to a new destination, who almost always need a complete tour package.

In this era of information explosion, almost everyone can find almost any information independently about flights, hotels, destinations, and tours. Nonetheless, most travellers will prefer a professional to package both the travel and tourism services and relevant information, and will therefore be happy to pay for the added value of a full service.

Moreover, the new technology is available to travel agents and travel operators to improve their operation, reach bigger and more relevant audiences, and sell and get paid faster with lower costs.

The ultimate conclusion is that travel agents and travel operators will need to change rapidly and elevate their service quality and value in order to survive. When they succeed in doing so, and use the new technologies to market and sell, they will prosper and stay in business for many years.

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