Travel agencies bounce back amid complexity | WARC | The Feed

Travel agencies bounce back amid complexity

Price-comparison sites, low cost airlines, and all the other platforms that made travel a do-it-yourself booking experience; the complexity that COVID has brought to travel means that agencies’ offer to cut through the difficulty is now back in demand.

Why it matters

In a volatile, uncertain, complicated situation, there is money to be made in simplicity, especially at the upper end of the market where a premium will be paid for problems to be solved. With vaccination proofs, testing, and restrictions, the problems are many.

What’s happening

Several recent stories have pointed to changing fortunes for a part of the travel industry that had been hurting since the onset of low-cost, DIY flight and accommodation booking services.

• In the UK, Hays Travel – the company that in 2019 bought the collapsed Thomas Cook – has weathered the pandemic through a mix of revenue diversification and new customers looking to cut past the changing travel restrictions. New customers in 2019 accounted for just a fifth of the total business; in 2021, the proportion sits at around 50%.
• In the US, meanwhile, agencies like Valerie Wilson Travel have been boosted by the reality that travel now is possible but it is extremely difficult. That difficulty isn’t just a headache; cancellations without refunds can be a big financial problem. In many cases, agencies provide the kind of buying power that can force exceptions.
• Don’t call them travel agents. The preferred term is now travel advisors.

Deeper changes

There are parallels with a question that has faced advertising agencies for some time: what are you actually charging for? In advertising, is it creative and media at scale? In travel, is it the flights and accommodation? Or, as in the case of both, is it all the extra thought, planning, and organisation that should command the premium.

And, in another parallel, the way agencies are making money is shifting in travel from pure commission to service fees either as a retained relationship or per-trip charges.

Key quote

“There was a time when designing a holiday, from booking flights and accommodation to arranging activities, was left to the travel agent. With this sort of personal assistance, customization and added support back in demand, and a shift away from the self-serve models, we can also expect to see a resurgence of that travel advisory role” – Ete Davies, CEO, ENGINE Creative, writing for WARC.

Sourced from the Wall Street Journal, Financial Times, WARC