Travel Agents Are Back, Says A New MMGY Report

Part one of two.

“Our research over the past three or four years, and this year in particular, shows a huge jump—a  50% increase—in the number of travelers who plan to use a travel agent,” says Steve Cohen, VP of insights at MMGY. “And it seems to me that agencies could be even more successful if they had a stronger voice in the marketplace, if they could demonstrate to consumers what an agency can do for them.

“The travel agency space is there for the owning.  I believe there’s an opportunity for whatever brand to become THE brand in travel. No one has done it yet. It’s an expensive proposition, but there’s a chance for a really big payoff.”

TMR’s conversation with Cohen this week came as the result of a new white paper released by MMGY, the travel-industry marketing and research firm that produces the voluminous Portrait of American Travelers survey. It then releases the data in five parts; the latest release, part two, came out yesterday.

It found that more than 9 million U.S. travelers will be calling a travel professional to help them book a trip this year, and will push a whopping $83.7 billion through the travel agency distribution channel.

By the numbers
The use of travel agents is at a six-year high—and the increase is being driven not by Baby Booomers, but by Millennial travelers, 34% of whom reported using a travel agent, the survey found. And the higher the ticket price of the travel being purchased, the more likely they were to turn to a professional travel advisor.

“As these travelers are vacationing more and spending more on leisure travel than those booking on their own, travel agent users are becoming a more desirable segment for both destinations and travel service providers,” the white paper said.

The paper notes that 16% percent of American travelers used a traditional travel agent during the past 12 months and intend to do so during the next two years (what MMGY Global refers to as travel agent users). That’s up five percentage points, fully 45%, from 2011, “and significantly higher than each of the previous five years.”

There’s lots more good news where that came from. Travelers who use travel agents do so frequently, calling a professional for 50% of their travel.

The typical travel agency customer is 39 years old, married with children, with an annual household income of $145,875. The top reasons they cite are expertise, trust and ease, but 86% also say that using an agent gives them more control over their trip, and 79% believe a travel agent will find the best price.

The road not yet traveled
Good as the data is, though, a 16% market share still leaves plenty of room for growth.

“Most of what we hear when we ask travelers how they heard about their travel agency, they say it was word of mouth,” Cohen said. “Back in the mid-90s, when airlines were paying commission, you had Liberty Travel, AAA; people were aware of those travel agency brands. But I don’t think any agency owns the travel-agency space in the consumer’s mind today.”

In the survey as well as in focus groups that it holds regularly (the latest was on July 27), MMGY has found that even though Millennials in general, and Millennials in their 30s in particular, are accustomed to reaching for their phones to research and make purchases, “they still want to get the best deals and they want to have someone who really gets it help them.  There are so many different travel sites out there, but Millennials are saying they want someone they can talk to. They are going away from the OTA model back to someone who has been there. All of a sudden they are showing up at travel agencies again. They are telling us that in the largest percentage of their vacations they use traditional travel agents.

“It all adds up to a great opportunity for travel professionals.”