Is This the Golden Age of Travel Distribution?

by Marilee Crocker
Is This the Golden Age of Travel Distribution?

Travel agents who lament the passing of a so-called golden age of travel distribution, when suppliers relied exclusively on the agency sales channel, are buying into a myth. The myth is that “the old linear [distribution] model was healthy,” according to Marc Casto, president and COO of Casto Travel.

“In reality, it was terrible,” Casto told attendees at the Blue Sky Symposium, hosted by ASTA’s Young Professionals Society (YPS) in Fort Lauderdale on Wednesday.

In fact agents are in a better position in the travel distribution chain today than they were when they were the sole intermediaries between clients and suppliers, Casto asserted. “We’re in a better position because we’re working with engaged partners, as opposed to command and control.”

Casto was one of five speakers who delivered short talks on issues related to ensuring a “future travel agent workforce,” the symposium’s theme.

The half-day event brought together some 65 industry members who broke into roundtable discussions to tackle questions such as, “can we avoid a crisis?” and “the truth behind travel agent salaries.”

Myths & realities
Casto, whose $160 million agency is headquartered in San Jose, Calif., spoke about the “myths and realities in the travel agent distribution channel.”

While a distribution system that forced most information between suppliers and travelers to flow through agents may have seemed like a great thing, “there are times when we [agents] need to step out of the way,” Casto said.

In today’s world, where “every single party can work with the other,” agents who deliver more value to both supplier and client can reach a sweet spot where the interests of client, agent and supplier overlap. Then “all parties are in harmony,” Casto said.
 
Do suppliers hate agents?
That brought Casto to Myth #2: “All suppliers hate agents.”

“I will personally say that is manifestly incorrect. Suppliers love agents,” said Casto. Then he paused and added, “Some suppliers love some agents.”

The question is who are the agents that suppliers love? “What is that special mix that suppliers are looking for?”

Agents’ value for suppliers
One answer for agents lies in selling luxury and premium products. “That’s where we provide the most value for suppliers. For suppliers, the margin is made on premium and luxury product.”

But suppliers such as airlines and hotel companies that provide just one travel component “have trouble managing high-end clients,” Casto told Travel Market Report. They can’t see “the entirety of the customer experience. Agents are in a better position to see everything.”

For instance, he said, agents can help hoteliers to sell the right room to the right customer and give them complete details about what that client wants. “That’s where we provide value.”

Myth #3 is that travelers call agents to buy a product. That’s old-school linear thinking, Casto said. “Clients don’t call us to buy a product anymore. They want something special. We need to know that in advance.”

More endearing role
What was Casto’s key take-away for travel sellers? Agents need to “recognize and embrace the fact that it’s better for us to have to prove our value on a daily basis,” Casto said.

“We’re being measured based on the service we provide, not just our position [in the supply chain]. That is far more endearing to clients and suppliers. I’d rather be judged based on how I perform then on pressing a key [to transact a sale].”

Next time: Owners and managers need to take advantage of the unique strengths that younger agents bring to the business.

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