Travel agents: obsolete or not?

Travel Agents' most visible association, the perhaps thin-skinned ASTA (American Society of Travel Agents), quickly reacted to President Obama’s recent implied statement that agents are no longer needed. What Obama said during a town hall meeting in Atkinson, Illinois:

“One of the challenges in terms of rebuilding our economy is businesses have gotten so efficient that—when was the last time somebody went to a bank teller instead of using the ATM, or used a travel agent instead of just going online? A lot of jobs that used to be out there requiring people now have become automated.”

“Travel agents flipped their lids,” according to one newspaper account.

But pro and con comments raised the question of the relevance of agents today.

“Not so fast, Mr. President,” said Barry Liben, CEO of Travel Leaders Group, which says it  represents about one third of the North American travel agency market. “While many components of travel may have become commoditized, there’s no commoditizing the human touch.”

“The vast majority of travel, regardless of online tools, is still booked by travel agents,” wrote Mark Murphy, CEO of Travelalliance, parent of TravelPulse.com and other publications and dot.coms.

ASTA wrote a letter to the White House “strongly rebutting” the president’s statement. ASTA argued:

The US travel agency industry today "is comprised of nearly 10,000 US-based travel agency firms operating in 15,000 locations. We have an annual payroll of US$6.3 billion. Most importantly, our businesses produce full-time employment for more than 120,000 US taxpayers."
 

Further, the US travel agency industry:
• processes more than $146 billion in annual travel sales, accounting for more than 50 percent of all travel sold. This includes the processing of more than 50 percent of all airline tickets, more than 79 percent of tours and more than 78 percent of all cruises
• helps more than 144 million travelers get where they want to go each year.

“It is true that travel agents are still a significant part of the American workforce, and $6.3 billion in annual payroll and 120,000 jobs are nothing to sniff at, especially in this economy,” commented The Economist.

The site added:

“Suggesting that such a large number of Americans are doing a job that is no longer necessary was perhaps not the wisest move politically. But just as it's true that ATMs have changed the roles of bank tellers, so too have internet travel sites changed the travel agency industry.”

On the one hand, there’s no question the bricks and mortar agency sites have declined. There were about 32,000 such sites in 1998 which has since declined to somewhere around 20,000, depending on who is counting.

And agents are not exactly a growth industry. The federal government’s Bureau of Labor Statistics projects that there will be about one percent fewer travel agents in 2018 than there were in 2018, despite population growth. But so what?

IBIS World, an industry research provider, says continued changes in the industry will eliminate many smaller brick-and-mortar operations but that the prospects are good for online growth.

“The real challenge for travel agents going forward will be convincing younger business and leisure travellers who have never used anything other than a website to book travel that they can and should use an online travel agent,” according to The Economist.

The Dodo and the milkman were common comparisons for the decline of the travel agent. But that’s in the past.

”The travel agent has been given a reprieve, as travelers are starting to need vacations from planning their vacations,” writes Online Travel.

That’s partly because of the confusion of conflicting words of advice from often self-serving sources.

“Everyone is trying to tell you where you should stay, where you should eat, what you should do,” said John Clifford, a travel consultant.

A study by Forrester Research found that, in the first quarter of 2010, 28 percent of US leisure travelers who booked their trips online said they would be interested in using a good, traditional travel agent.

Moreover, an ASTA study released earlier this year found that 51 percent of ASTA leisure-based travel agencies saw increased revenue in 2010 compared to 2009

Take that, Mr. President. No wonder Obama’s ratings continue to plummet.

By David Wikening