Will Jeff Katz Miss The Mark Again?

Needless to say, many who read this column may brand me a Luddite.  Yet, as I read in Travel Market Report about Jeff Katz’s new venture, Journera, I am reminded that the last time we went through a technology revolution, there is a pretty good argument that consumers, agents and suppliers all ended the worse for wear. 

While I appreciate that suppliers viewed online booking as a way to distribute their products more efficiently, it really hasn’t ended up that way. As I understand it, bookings via retail travel agents, even with a 10% commission, are more profitable for hotel companies than those made online. That’s because retail travel agents, as in real travel agents, that means you, sell higher rates.  

The higher rates aren’t because you want customers to pay more than they want. Agents sell higher rates because as real live people, with two ears and a brain and a mouth to ask qualifying questions, you are able to understand what customers want far better than a keyboard and artificial intelligence programs running in a remote data center. 

At the same time, the last time a bunch of suppliers got together to fund a digital breakthrough, the net result was a dramatic increase in their distribution costs. While complaining about 10% commissions was the thing to do in the 1990s, today suppliers fret about online travel agencies (OTAs) where the cost of a booking can be as high as 30% of the sale price. In fact, Arne Sorenson said a principal reason for Marriott International merging with Starwood was that Marriott, already a behemoth, needed more girth to compete against OTAs.

Like Sorenson, I credit OTAs and metasearch sites with providing encyclopedic information. As Sorenson told ASTA delegates in Reno, giving consumers 500 hotels to choose from in Tanzania is nice, but it’s too much for the average consumer. Retail travel agents help customers understand which one hotel best suits their needs, and then which of the myriad packages and room types will lead to the highest value and best experience on their client’s vacation.

Still, one only has to look at the litany of complaints from consumers who want to play doctor and book their own travel. Last fall, I did a rather extensive investigation, and the results were not pretty. Customer service was even more comical.

Pressed for an example of what Journera will do, Katz suggested that “if a traveler’s flight is delayed, the system could automatically advise his Uber driver and the Marriott to which he is headed of the delay.” Perhaps Katz needs to read Travel Market Report, as multiple times, from the Lufthansa strikes last fall to Delta’s IT meltdown and multiple terrorist attacks, he would find that again, again, and again, travel agents have gotten their clients where they needed to go, sometimes ahead of schedule, and in the cases they had to change their plans, got them someplace new, and made sure their precious vacation time wasn’t wasted.

With the blue-chip airlines and hotel companies that are backing Katz’s new venture, and Boston Consulting Group behind it, tens of millions of dollars, if not hundreds of millions, will be spent to solve a problem that could be solved by simply telling consumers, “Find a good travel agent, and love them, because a good travel agent is going to always deliver for you a lot better than an artificial brain in some computer facility in the middle of the Nevada desert.”

Doug Gollan is co-founder and editor of DG Amazing Experiences, a weekly e-newsletter for private jet owners, and a member of the Travel Market Report management board. His experience catering to the wealthy includes founding Elite Traveler, a magazine distributed on private jets, launched in 2001, which he sold his interest in 2014. Before that he worked in various editorial, sales and management positions for Travel Agent Magazine for 14 years. He is a CTC and a member of The Luxury Marketing Council. His blog Douggollan.com covers news and trends about selling and marketing to the Super Rich. His third book, “Sales Superstars: Secrets of Selling to the Super Rich,” was released last month.