More Affluents Using Agents, Driving Retailers' Comeback
by Robin Amster /

Travel agents can expect to capture a larger share of the coveted affluent travel market over the next two years, according to a new study from MMGY Global.

In the next two years, 21% of affluent travelers with incomes of $125,000 or more plan to use an agent, and fully 29% of those with incomes of $250,000 or more plan to do so, according to the study, “MMGY’s 2014 Portrait of Affluent Travelers.”

Those percentages represent “significant” increases over the share of high-earning travelers who used the services of agents last year, according to Steve Cohen, MMGY Global’s vice president, insights and research.

Last year, 17% of affluents with incomes of $125,000 booked one or more trips with an agent, and 24% of those in the $250,000-plus income bracket did so, MMGY found.

The study, conducted in February 2014, is based on responses from 1,250 affluent travelers, defined as those with annual incomes of $125,000 or more.

This year was the first time since 2010 that MMGY conducted this survey of affluent travelers, said Cohen. During the recession it didn’t make any sense to do this research, he added.

A comeback
“In everything we do, we see agents making a comeback,” said Cohen, referring to another recent MMGY Global survey that found an unexpected boost in the number of millennials who use agents.

“Millennials and the wealthy are leading the way in the comeback [of agents],” Cohen added.

Despite this encouraging message, agents continue to face tremendous competition from other sources, notably suppliers.

“Affluents are using the OTAs for research but they are booking directly with suppliers,” said Cohen.

“Back in the mid-’90s, pretty much the only way to book travel was with a travel agent or by calling the provider [supplier] directly. We can now make the argument that we’re going back in that direction – only now with the additional change of being able to book on the supplier’s website.”

OTAs: odd man out?
According to the survey, 55% of affluents in both the $125,000 and $250,000 income brackets book primarily through supplier websites, 28% with an OTA, 10% with an agent, and 7% by phone with a supplier.

Among the reasons affluents said they book through a supplier website versus an OTA were:
•    better support if something goes wrong, particularly with a flight
•    travelers can’t get frequent traveler points by booking with an OTA
•    more confidence that the reservation actually exists when booked with a supplier (an OTA’s confirmation may not be recognized by a hotel, for example).

Affluents said they chose to book with a travel agent for the following reasons:
•    the extra level of service agents provide
•    agents’ knowledge of a destination
•    removing the hassles of booking
•    booking a better trip than one might do on one’s own.

The way we were
Cohen commented that “there is a space for agents booking complex travel. It’s that reassuring, ‘I’ll take care of things if they don’t go the right way,’ and ‘I know the destination; I’ve been there.’”

Still the agent community needs to temper optimism with reality.

“It will never be like it was,”  Cohen said, referring to the days when travelers could book only through an agent or directly with a supplier.

“Agents’ message to travelers should be centered, to a certain extent, on trust,” he said. “Take the Caribbean as an example. An OTA or Google can tell me what islands there are; they can’t tell me which one to go to.”

In everything we do, we see agents making a comeback.

Steve Cohen, MMGY Global