Since the early 1970s, with the advent of the first computerised booking systems, there have been rumblings about the inevitable death of the travel agent. At the time, travel agents accounted for 70% of the airlines’ turnover.
In the last 40 years, technology has produced websites that offer online air ticket bookings, giving customers direct contact with airline products. This could have reduced the role of the travel agent significantly. But, despite this technological advancement, and the move by airlines to remove agents’ commissions, travel agents still account for almost 70% of the world’s air transport turnover. In South Africa, that figure is closer to 80%.
By removing the commission paid to agents, the airlines effectively freed the travel agent of any ties to the carriers, allowing them to become completely customer focused. When their income became dependent on the service charge paid by their customers, travel agents sought the best deals, with little regard for the airlines they recommended.
Looking ahead, it is time that the collaborative nature of the relationship between travel agents and airlines is re-visited, because travel agents add value in the supply chain. Both parties need to work together to develop a fair product and payment system that allows for both consumer protection and default protection for all industry players.
Payment disputes need to be handled professionally and objectively by a third party, if necessary. The travel industry needs to develop a more consensus-based early-stakeholder involvement approach to product development processes, like the New Distribution Capability, an IATA-led industry initiative that seeks to define a messaging standard that will enable retailing opportunities through the indirect (GDS/travel agent) channel. Dictating one-sided solutions is not the way to survive as a business in the long run.
This will require give and take from both sides, to ensure a more balanced relationship. Global distribution systems and travel agents need to be seen as a cost-effective means to accessing new business and distributing their products. New business models must be developed to ensure the viability of all involved businesses.
And this new collaboration begins with looking at what the customer wants, for everything that we do must be customer driven.
Otto de Vries