A Picture of Travel Agencies Today

I’m about to do something I don’t normally do, and that is: to post an article I’ve written. That’s right– an article, not a blog post. So, if you’re in the mood to explore an aspect of the travel industry in a little more depth, please read on.

I wrote this article for a journalism course at school. I’ve always been interested in travel, obviously. But recently, thanks to my internship working in a business-to-business publishing department, I’ve gotten into writing business articles. So, this article is both. It deals with the state of travel agency industry today, and the unique challenges they face.

A side note: if you want to take a look at more of my work, check out my website, on which I have included my complete portfolio.

And now, the article.

. . . . . . . .

A Picture of Travel Agencies Today

The wedding ran smoothly. According to plan, the fall-themed bouquets arrived early to the church, as did the wedding party. Relatives and friends filled the pews of the small church. The ceremony went as rehearsed, and the bride beamed throughout, radiant. The only issue: the ring bearer, aged two, refused to accompany the last bridesmaid down the aisle; so, the maid of honor carried both the train of the bride’s dress and her son, the ring bearer, down the aisle.

The reception flew by, dotted with appropriate, loving toasts and a dinner appealing to all attending demographics: chicken. The cake, homemade, matched the brown and cream-colored bridesmaid dresses. And the open bar and carefully-selected music kept guests dancing into the late hours of October 20, 2007.

But for all the planning Katie Pochinski, now Katie Robb, and her now-husband, Frank Robb, did for their wedding, their honeymoon to Puerto Vallarta, Mexico was for the most part out of their control. They knew vacation plans, even when made carefully, could easily be tripped up through no fault of their own.

To minimize potential hitches on their few days of wedded bliss, they decided to enlist the help of a travel agency, Countryside Travel. The honeymoon ran smoothly—more so than it would have had they planned it on their own, believes Frank Robb. He says working with a travel agent isn’t always necessary, but for his and Katie’s honeymoon, they wanted a travel expert on their side.

They’re happy they enlisted help, says Frank.

“For our honeymoon, the agent was able to get us upgrades that you wouldn’t normally find,” he says.

These upgrades included a junior suite at reasonable price, he says. The service they got on their honeymoon was better, too, he adds.

“I think the travel agent gave the hotel information about our trip, like ‘hey, it’s their honeymoon’,” says Frank. “So, in a sense the service was a little bit better.”

Today, there’s much debate over whether or not it’s worth working with a travel agency when planning a trip.  The Robbs have worked with a travel agency a few times since their honeymoon, but certainly not for every trip, says Frank.

He says whether or not he’ll use a travel agency depends on what type of vacation they’re looking to go on.

“I think you’re more apt to find better prices when you don’t use a travel agency,” he says. “You’re shopping on a price point only at that point.

“But sometimes with that person working for you, they can get you different upgrades. When you buy online, you’re buying tickets at such a low price, you have to battle to get different kinds of upgrades.”

This is the challenge travel agencies face in today’s economy. When consumers are looking for vacations primarily on a price point, how can they be convinced to go out of their way and use a travel agency?

Today, what makes or breaks a travel agency is its ability to reach customers. But that’s a more difficult feat than ever before—especially since the advent of online travel search engines. Many people (and in particular college students) have become what Scott Mast, Chief Operating Officer at Burkhalter Travel, calls “self-proclaimed travel experts.”

“They think they can do everything on the Internet,” says Mast. “You can plan vacations on the Internet, but the real question is: do you want to? Do you have the time to do it on the Internet? Are you sure you’re getting the lowest prices by going on the Internet?”

Jennifer Rocheleau is one college student who has, on multiple occasions, chosen not to use a travel agent in her travels. A senior at the University of Wisconsin-Madison, she’s made two trips to the East Coast in the past year, and plans to travel to California in December.

“I chose not to use a travel agency because I felt comfortable handling the coordination myself, and I wasn’t in a hurry to book tickets,” she wrote in an email. “I’ve had good experiences doing it myself in the past, so I probably wouldn’t change the way I’ve been traveling in the future.”

Students list other reasons they wouldn’t use a travel agency to plan a vacation as well. Eryn Longstaff, a senior at The University of Wisconsin-Milwaukee, says she likes finding her own way on a vacation.

“Traveling on your own gives you a sense of accomplishment,” she says. “I think the more you let yourself break from your itinerary and explore on your own, the more chances you have of enjoying your trip and getting the most out of it.”

She adds there are plenty of ways to find advice online for a trip, instead of turning to a travel agency, like blogs and travel information exchange sites.

Both women say it would take unique circumstances for them to use a travel agency to plan. For Rocheleau, that would mean an agency would have to have extremely low rates, or she’d need to be in a situation where she had very little time to plan. Longstaff says she might work with an agency if she knew someone working there, or if an agency offered a guarantee on a vacation.

Even Frank Robb, who says he has only had positive experiences working with travel agents, says there is a time and place to work with an agency.

“It’s almost like when you don’t use a travel agency, when you’re using online options, you’re almost taking the trip before you go on the trip, because you have so much information readily available,” he says. You have to know the details of the trip when you’re planning it on your own, he adds.

But for all these reasons not to use a travel agency to plan a vacation, Mast and Lindsay Juley, a travel expert at STA Travel, says there are plenty of reasons consumers should use one.

First, travel agents can find consumers a better deal on their vacation because of their access to vendors and discounted prices offered exclusively through travel agencies.

This access can help customers get lower rates, for instance in the case of a student using STA Travel to book a flight or trip, says Juley. As an agency that works primarily with college students, they offer discounted rates for students, teachers and travelers under the age of 26, much lower ones than what they might find using an online search engine.

“We can pull up those same rates that people see online [then discount them further], so there’s really no reason not to check with us first,” says Juley.

STA Travel’s airline tickets are flexible too, so when a ticket is booked through the agency, the charge for changing a ticket can be as low as $50, says Juley. The company also offers discounted vacation deals for students and a variety of promotions, including giveaways.

Companies are able to offer promotions like these because they work as marketing for the companies who offer them. When people blog or talk about their experiences traveling, other people get excited and book the same trips, says Juley. Tour companies and airlines make particular use of this method—if someone who buys a discount ticket on their tour or airline has a good experience, they’ll spread the word.

And promotions like these bring in business to the travel agency too, not just to the company offering the promotion.

“Promotions come mainly straight out of the marketing budget that we have,” says Juley.

Working with vendors also lets travel agencies find better values for customers, says Mast. What makes travel agencies’ services so unique, he says, is they can offer a trip tailored to a customer’s needs; this may or may not be the cheapest option, but what the consumer gets will be a better value, and more in line with their needs.

Travel agencies also advertise their role as what Mast calls “information brokers”. Because their business is travel, they can offer insights and advice a consumer might not find on their own.

“If you’re booking online, let’s say the cheapest ticket is arriving at midnight in a city like Bangkok,” says Juley. “Well, you might not know that the public transportation doesn’t run that late, and it’s going to cost your quadruple to book a taxi at that time of night—versus if you would’ve just paid a few extra dollars for another ticket that would’ve gotten you in at a decent hour. Things like that, you just can’t find online.”

A last benefit agencies offer is they take care of complicated processes for the customer, like changing flight information (instead of a customer calling a 1-800 number oneself and waiting on the line).

Overall travel agencies sell customer service as the biggest reason consumers should use an agency to help plan a vacation. But making their selling point customer service can also backfire—when a trip doesn’t go as planned.

“I think working with our vendors and especially the airlines is one of the biggest challenges today,” says Mast. “It used to be the airlines were very service-minded. But now the airlines are in a real world of hurt. They cut services; they’re now charging for bags, charging for meals. You’re real lucky when you can get on a plane and get to your destination without something going wrong.”

He says that working on the customer service side of travel means they’re a representative of travel companies like hotels and airlines. This can be problematic because they don’t have much control over how these companies run their businesses.

“Airlines just scare me to death,” says Mast. “We put someone on an airline, let’s say around the holidays when we might get some weather, and we just pray and we keep our fingers crossed that that person’s going to get to their destination without problems occurring.”

When the customer does have problems on their trip then, they often blame the travel agency, since the agency technically sold them the ticket.

This can be very harmful to agencies. In the travel business, reputation is everything, says Lisa Marshall, communications director at the Wisconsin Department of Tourism.

“If you’re not providing good customer service, you will never get your traveler back,” she says. “It’s very important, especially in the time of social media, where anybody in the world can go post what they think of you.”

Similarly, Juley says the majority of the business STA Travel does is repeat business.

And it’s important that companies in travel—travel agencies or otherwise—are successful. Travel and tourism is the second largest industry in the world, after groceries, says Mast. Many countries are entirely dependent on tourism for economic sustainability. He believes it would be detrimental to struggling European countries that rely heavily on travel, like Greece, Spain, and Italy, to make cuts to their tourist attractions or accommodations.

Tourism and travel is important to local economies too. One in 13 jobs in Wisconsin is supported by tourism, says Marshall—whether that be through restaurant, hotel, or attraction revenue. It’s essential for small businesses’ success too. For instance, there are 1,200 small businesses in Door County, a tourist hotspot in Wisconsin, all of which have less than 19 employees.

And it’s only now businesses in travel are recovering from the recession.

“We, like every other industry in the world, or in the country at least, got pretty slammed back in 2008,” says Mast of his agency. “But we are slowly but surely coming back.” Burkhalter’s business declined 20 to 25 percent with the economic downturn, but is now back to being about a $40 million company—almost what it was in the beginning of 2008, before the recession.

STA Travel is also recovering from a decrease in business, but likely a less dramatic decline than other agencies, says Juley.

“The thing is, even if they can’t afford it, people are still studying abroad, so it never really completely destroyed us with the economy,” says Juley. “But there was a point where business dipped down, and it’s just recovering now. “

Now, for travel agencies to continue on their upward trajectory, it’s a matter of promoting their products and services to consumers.

“We have so much to sell,” says Mast.

Services in travel have a much higher value than simpler goods, he says. For Burkhalter, their products range from a $200 ticket to New York, to a $50,000 ticket for an around-the-world cruise. Because people pay much more to travel than for other products or services, Mast says he doesn’t understand why more people don’t work with a travel agent to ensure their money is well spent.

Today, Burkhalter Travel uses many marketing techniques to get the word out about their many services. One main vehicle they use to promote the company is the State Journal’s travel section on Sundays.

“We own it,” says Mast.

To be successful as an agency today, you can’t be complacent, he says.

“You’ve just got to keep cooking, you’ve got to keep moving ahead,” Mast says. “You can’t stand still, because if you do, you’re going to die.”

So which demographics are keeping travel agencies going?

The first is baby boomers.  As members of this demographic hit 65 and retire, they’re beginning to travel more than they have, says Mast. One issue with baby boomers though is that their retirement funds are in flux, due to changing economic circumstances—for instance, the stock market. This can cause them to limit or postpone vacations.

A second group of avid travelers is college students, studying abroad whether or not they can afford it. They splurge on spring break and summer vacations too, says Juley.

A third group is businesspeople. For many companies, travel is the second largest expense, says Mast. Burkhalter Travel works with a variety of companies throughout southeast Wisconsin to coordinate their business travel needs, like hotels, flights, and car rentals.

Still, the travel industry is a volatile one, whose success is determined by factors like the economy, consumers’ mindsets, and the technology of the day.

For instance, since the advent of computers, travel agents went from writing about 75% of airline tickets, to about 60% today, says Mast.

But, today travel agents do more business overall, because of increased efficiency in technology, he says. For instance, when Burkhalter Travel moved to its office on the west side of Madison in 1978, a good business travel agent did about $300,000 of business in a year. Today a good agent does $2 million to $2.5 million dollars of business in a year.

In short, things in the travel industry are constantly changing.

But, every business day, Scott Mast arrives at the office between 7:15 and 7:30 a.m. He leaves again between 5:30 and 6:00 p.m. at night. Having worked in the travel agency industry for 36 years, he knows things in travel can change quickly and dramatically, but has faith things will be fine in years to come.

“There are days I think things are going to hell in a hand basket,” says Mast. “But chances are it’s going to be fine. People aren’t going to stop traveling. Destinations aren’t going to go away.”

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6 thoughts on “A Picture of Travel Agencies Today

  1. Wonderful article, very well done! I find myself building a career at a travel agency when I barely even knew they still existed when I graduated from college 3 years ago. Lots of exciting developments happening in the industry. I’m looking forward to sharing this article with my colleagues.

  2. Great article. I can admit there are some times when a cheap flight is all you need. Ticket to visit family for example when you know the airport, have a ride to and from, and have plans when you get there. When my sister and I went to Europe on the other hand with a Mediterranean cruise it was a lot more critical that all the dates and tickets matched up. In that case a travel agent was a life saver.

    1. Interesting perspective, I never thought it it that way. I personally use sites like HereStay.com to plan all of my vacations and cut out the middle man, but I will definately contact a pro when I start visiting places that are completely foreign to me.

  3. Impressive blog! Thank you for sharing such an interesting article with us. I personally use sites like my-travel-mate.com to plan my vacation.

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