Surprising good news out of Australia: Retail travel agents are gaining market share.
A recent consumer survey showed that in 2011, 55% of Australians traveling overseas used a travel agent for all or part of their trip. That was up two points from 2010, when 53% of Australia’s overseas travelers used an agent.
It’s not a huge increase, but it makes Australia one of the few markets where travel agents are not losing market to online sellers.
“Even we were surprised to see that,” said Jayson Westbury, chief executive of the Australian Federation of Travel Agents (AFTA). “We are moving against the global trend.”
There are two reasons for the upturn, Westbury said. One is that travelers are recognizing the problems inherent in online booking. The other is that travelers are finally realizing that without a travel agent, you’re on your own when trouble strikes.
Travel Market Report asked Westbury to expand on the current state of Australia’s travel agency industry and the forces affecting it.
What caused more Australians to book with travel agents?
Westbury: There were a lot of unforeseen catastrophic events during 2011.
A lot of consumer press was around the notion of, ‘What do you do if you’re stuck in the middle of somewhere and there’s an ash cloud or a tsunami or the threat of something nuclear? What if an aircraft or an entire airline gets grounded? Who do you call if you didn’t use a travel agent?’
That resonated with people.
What about online searching and booking?
Westbury: Travel agents are becoming Google interpreters. People come in very organized, with printouts or iPads showing what they want, and say, ‘Book me this’ or, ‘What can you get me this for?’
Travel agents are being given the opportunity to present themselves, their experience, and their knowledge. They are able in so many cases to better the price, so they secure the booking.
Plus people have found more and more that is it sometimes cheaper when you look online, but it is not always cheaper when you book online. You’ve got to be ready to make the decision on the spot.
People Google their way through an itinerary and four evenings later, after they’ve had a chance to talk it through with the family, they go back to book and they can’t find the same deals. The price has changed.
How is that an opening for travel agents?
Westbury: Travel agents, because of the way global distribution systems work, have the capacity to hold a booking, firm up a price and give somebody a few days to think about it.
Even with cruise, agents can secure specific cabins, and the traveler can come back and, ironclad, know the agent has held it for them. Whereas if you are doing it yourself, there’s no look and hold and pay later. It’s book and decide now.
We at AFTA can’t think of any examples where you can genuinely look online, have a think and book later. That technology doesn’t exist at present. It’s all have a look and pay now.
The number of retail travel locations continues to shrink in the U.S. and the U.K. Is the Australian retail sector shrinking as well?
Westbury: Over the past two years, for every closing there has been an opening, so we’ve basically plateaued. We’ve seen a movement of 90 to 100 retail locations a year, but the overall number of retail locations is static.
People underestimate the retail footprint that travel agents have in Australia as an absolute stronghold. I refer to it as concrete and glass, rather than bricks and mortar, because most travel agents now are in big shopping malls made of concrete and glass.
You can’t undervalue the walk-by sales that footprint generates. I’m walking on the weekend with the family, I see a sign, I walk in, I book. It still happens.
Where do travel agency Internet sales come into the picture?
Westbury: We’re not seeing a massive loss of retail locations to online sellers.
We are seeing travel sales going to what we call ‘omni-channel.’ You want to book with brand X? How you book with brand X is your choice – in person, by phone, online. All the franchise models are getting more sexy and more savvy with their online options.
As this omni-channel concept starts to connect, travel agents will stay ahead of the game and relevant. Just because somebody doesn’t walk in through your front door doesn’t mean you aren’t relevant.
Expedia and the other online travel agencies employ thousands. A human touch is still required to make a booking in the end.
What does ‘omni-channel’ sales look like for a retail travel agency?
Westbury: Take Travel Centre, probably one of the longest-standing retail footprints, mom and dad sitting in a 45 square meter (484 square feet) shop. Their online offer has become quite competitive. They’ve got a Facebook connection, and the call to action in their advertising is now through Facebook or online.
When the actual booking is made, it is channeled through one of the respective offices.
From the consumer’s point of view, they’ve booked online. But from the booking point of view, it is all post code-based. You put in your post code, and the booking is transacted by the closest-to-you shop.