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For Agency Clients, Service & Expertise Trump Price
For Agency Clients, Service & Expertise Trump Price

For Agency Clients, Service & Expertise Trump Price



Travel agency customers are far more interested in their travel sellers’ level of expertise and service than they are in finding the cheapest price.

That’s a key conclusion that emerges from a new PhoCusWright study of travel agency customers, according to Douglas Quinby, co-author of “The Travel Agent Customer: Who Uses Travel Agents, Why They Use Them and What they Buy.”

Douglas Quinby

The profile of today’s leisure agency customer indicates that for travel sellers, “things like product and price are not competitive differentiators,” Quinby told Travel Market Report.

The study, which was based on a survey of over 1,200 U.S. travel agents, also found that today’s agency customers spend considerably more on vacation travel than the average U.S. traveler and are considerably older.

What matters most
What consumers want from an agent is “someone who knows what they are talking about. How can I find the best hotel and the best room with a great view? These are types of things where agents can distinguish themselves.”

Only 3% of leisure storefront agents identified price as a main reason consumers book with them, and just 1% said that unique product was a driver.

By contrast, 43% identified customer service and 31% identified expertise as the main driver for consumer bookings.

Personal relationships were cited as the third most important driver of business for leisure storefront agents (19%) and home-based agents (26%).

The higher importance of personal relationships for home-based agents was attributed to the fact that many home-based agents “are retail storefront migrants who work less than full time and may focus more on serving their existing – and often longstanding – client base.”

Older demographic
The PhoCusWright survey identified key demographic differences in the clients of leisure storefront agencies as compared to the average U.S. traveler.

While about half of the U.S. traveling public is age 45 or older, travel agents at leisure storefront agencies said two-thirds (67%) of their sales come from consumers 45 or older. Nearly one-third  of sales (32%) comes from customers at least 60 years old, according to the study.

Spends more
In terms of traveler spending, differences between agency and non-agency consumers were even more dramatic.

Leisure storefront agents reported that for 70% of their bookings the per-person expenditure is $1,000 or more. And for fully 35% of their bookings, the per-person expenditure is more than $2,000. Home-based agents reported a similar mix, with 67% of their bookings coming in at over $1,000.

In contrast, the average spend per leisure trip among all U.S. travelers is “well below $1,000 per person,” according to the study.

More complex travel
The higher spend among leisure travelers who work with travel agents is tied into another finding: leisure travel agents increasingly handle more complex – and therefore higher-yield – vacation packages.

“Consumers who use agents are booking the bigger trip – it’s not about getting the cheapest fare to Wichita,” Quinby said. “It’s cruise, it’s international, it’s more complex travel.”

Airfares are higher
One reflection of the relative lack of concern over price by travel agency customers is the fact that the average airfare booked through agencies – leisure as well as corporate – is considerably higher than the average fare booked through OTAs.

The average airfare booked by a leisure agency in 2010 was $200 higher than the average booked by an OTA, according to the study. The average fare booked by a travel management company was $247 higher.

“So this significant fare differential clearly suggests that travel agents are serving a less price-sensitive leisure traveler and handling more complex, expensive leisure travel,” the study concluded.

Suppliers take note
A third of all travel in 2011 was booked through travel agencies in 2011. That’s “a sizeable chunk of the market,” the study noted, while acknowledging the “dramatic shift to online booking channels over the past 15 years.”

“Travel businesses offering more complex products and whose customers need more personal service should not overlook the role traditional travel agents continue to play in the U.S. marketplace,” the study said.


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Things like product and price are not competitive differentiators. Everyone has access to the same products pretty much. And suppliers have been relentless with pricing parity.

Douglas Quinby, PhoCusWright

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