Today’s leisure travel agents are increasingly wary of the cruise industry, increasingly home-based and, in a notable about-face, increasingly likely to book individual hotel and air components for their clients.
Agents are also growing far more adept at using online tools and are far less likely to book with suppliers over the telephone. At the same time, many are seriously out of the loop on one fast-growing trend: mobile technology.
These are among major findings in a new study, The Once and Future Agent, PhoCusWright’s Travel Agency Distribution Landscape 2009-2013. The study is a follow up to an earlier PhoCusWright study tracking agency trends from 2006 to 2009.
The travel research firm conducted a survey last summer of more than 1,200 U.S. travel agents representing a cross-section of the industry.
A more diversified product
Agents are shifting away from a focus on cruises to develop a more diversified product mix, the study noted.
The shift is largely driven by growing concerns that cruise lines will reduce agent commissions and expand their service offerings to consumers, according to Douglas Quinby, senior director of research and co-author of the study.
“There is real concern about what is coming down the road from cruise lines during the next couple of years,” Quinby told Travel Market Report. “Agencies are trying to insulate themselves.”
Share of cruise pie shrinks
Agent cruise sales are expected to grow through 2013, but the agency share of total cruise sales is declining, as supplier direct-to-consumer and online sales gain, according to the study.
Agents are more frequently booking hotel and air for clients, because they view this an important part of providing good customer service that will help business overall, the study noted.
“Agencies are realizing that it doesn’t make sense to book a 14-day culinary tour of northern Italy, but not book the flights,” Quinby said.
“If our customers who are spending thousands of dollars with us want the convenience of air, we will provide it, maybe charging a small fee. It’s part of keeping the relationship.”
Strength of group travel
The importance of group travel was also noted in the study. Group travel bookings account for more than one-fifth of sales for storefront leisure agencies and more than one quarter for home-based agents.
“We don’t know if groups are a growing market, but we do know they are huge – one out of every four or five dollars that a travel agent books,” Quinby said.
“Some of these are themed groups very smartly marketed by cruise agencies and individual home-based agents, while others are simply group blocks that the agency tries to fill.”
Shift in booking methods
While the GDS remains the dominant booking tool for nine out of 10 storefront leisure agencies, three out of five home-based agents do not use a GDS, the study found.
When it comes to booking packages and cruises, most agents cited supplier websites as their most frequently used booking method – 67% of storefront agents and 79% of home-based. That’s up significantly from the 2007 study, when 47% of storefront agents and 56% of home-based agents said they most frequently booked on supplier websites.
An exception is in the case of escorted tours, which are still booked predominately over the phone, due to the complexity of the booking and the limited number of escorted operators offering online booking engines for agents.
Better tools, more professionalism
“The migration away from phone-based to online booking has been the most significant booking shift,” Quinby said. “It signals that the tools have really improved and that tech providers and suppliers have really made an effort to drive efficiency within the agency distribution process.”
Quinby also noted that the trend shatters stereotypes about “old school” travel agents who are resistant to technology and shows agents’ growing professionalism.
“More agents realize that they are running a marketing and information business, and they don’t want to waste time in manual operations,” he said. “They get their bookings done lickety split and then get on to the next client.”
Lagging on mobile tech
Where leisure agents are not keeping pace is with the rapidly growing use of mobile technology by travelers, a deficiency that the study called a “clear and concerning mobile void in the leisure agency landscape.”
One out of two vacationers now travel with smartphones, and many use apps to make choices during trips. Quinby compared the mobile phenomenon to the advent of the Internet.
Agencies that don’t embrace mobile technology could be adversely affected, he said.
“If I’ve booked my client on a $5,000 culinary tour to Europe, and the client is there and looking for a potential activity, do I want them going to Google Places or an Expedia app, or do I want them to come to me?”
Noting that Signature Travel Group introduced a mobile travel app for agents last year, Quinby said more consortiums should make this a priority.
“Not many mom and pop agencies or even mid-sized agencies can invest in really rich mobile apps, so this falls to the larger organizations,” he said.