Doug Gollan, Contributor, Forbes
IBM has Watson. Google has its vast secret development labs. Both strive to bring to market technology that will improve our lives and use data to increase the power of marketers. In some cases, the technology is also meant to replace the need for a human, perhaps a scary thought if your job or industry might be in the path of some game changing innovation developed from a dorm room at Stanford.
Travel agents have been on death watch for the better part of two decades, and despite considerable evidence to the contrary, many in the media and Silicon Valley are still not sold we need personal interaction to book our travel. With that in mind, it might be surprising a large group of travel agents invited a Google executive to speak at its international conference in Cape Town earlier this year.
During Virtuoso Travel Week, held in Las Vegas this past August, Virtuoso CEO Matthew Upchurch got a round of hoots, screams and applause when he let it out that the net result was that the Google executive has since booked two trips with a travel agent, or in Virtuoso lingo, an advisor.
Google’s own research shows it takes a consumer 32 visits to 10 different websites to book a simple airline ticket. Independent research conducted earlier this year by TNS Global at the behest of ASTA, the American Society of Travel Agents, and paid for by Carnival Corporation, showed travel agents are able to save clients nearly $500 versus booking directly with a supplier or via online travel agencies (OTAs) such as Expedia or Travelocity. MMGY Global, a marketing company that publishes an annual survey on consumer trends related to travel, has measured an increase in travel agent usage for five consecutive years. The fastest growing segment happens to be time pressed, yet wired Millennials.
According to the ASTA/TNS Global survey, “when looking back on their past travel experiences, almost two-thirds (63 percent) said using an agent makes their overall trip experience better; 69 percent reported that agents save them time in planning and booking; 66 percent said agents help them avoid costly mistakes, and 64 precent say agents find the better deals.” The survey noted consumers who use an agent save four hours of planning time per trip.
In the past year during strikes by Lufthansa, a computer meltdown at Delta, storms, terrorism, Zika and other things that throw a wrench into travel plans, travel agents have again and again shown their worth by getting their clients to important business meetings, vacations, or home to loved ones, while consumers who booked direct or via OTAs were posting messages of frustration to Twitter and Facebook.
In fact, the profession is seeing both an influx of new blood, and a talent shortage. Nearly 70 percent of Virtuoso agencies reported they are planning to hire more advisors. What’s more, the demographics of agents themselves are changing dramatically. Anthony Huffman, owner of Huffman Travel says, “Five years ago we had nobody here (at Virtuoso Travel Week) under 50. Today, I’m the only one over 50.”
That’s partly because the job of travel agent, which used to mean sitting in front of a flickering computer terminal from nine to five, tapping on a keyboard, has changed dramatically. Many agents work from home, or if they have an office are rarely in it, instead traveling the world, scouting out what’s best, newest and next for their customers. While it may not pay like investment banking, with the median salary under $50,000, top advisors get well into six figures, and it is the type of job where if you are OK answering client emails 24/7, you aren’t tied to a desk, you get to see the world, stay in nice places and often get VIP treatment as if you were a big company CEO.
Of course, it is work as well. Visiting a resort means spending several hours on a walking tour to check out different room types and facilities, often under the hot sun, while at the same finding alternate flights for a client when the airline cancelled the flight for reason du jour. A one week trip often means staying at four different hotels and inspecting a half dozen more. It also means taking charge when things like terrorist attacks happen, contacting clients who are in the impacted area to organize new plans and come up with entirely new vacations for customers who were about to leave, but don’t want to anymore.
While Sergey Brin and Mark Zuckerberg have at their hands imposing reams of data about what you do, and other billion dollar companies make their business helping other billion dollar companies make sense of big data, savvy agents have turned the table on Silicon Valley using Instagram, Facebook and other social media to their advantage. As they tour resorts snapping pictures of villas, suites and premium rooms, luscious spas, infinity pools, craft cocktails sipped on a white sand beach, they post those images to their followers, which while not necessarily large in number, include their customers and friends of clients. The response is often text message or emails with requests to make a reservation. It’s somewhat ironic that as the industry’s global behemoths invest hundreds of millions of dollars into technology to create more personalized, deeper relationships with their customers, top agents are accomplishing the same.
If you still aren’t a believer, Reed Exhibitions, a major events company operates a trade show called International Luxury Travel Mart, or ILTM for short. Launched in 2001 with a single event in Cannes, the aim was to provide an opportunity for luxury hoteliers and suppliers to meet with travel agents in scheduled one-on-one meetings. The show has now grown to a series of events held in China, Japan, Mexico, Brazil, six shows in total, with hoteliers paying big bucks so they can meet, greet and update top advisors on their newest amenities and offerings.
Simon Mayle, the events manager for ILTM Americas, held in Riviera Maya, says the number of suppliers has grown from 150 to 300 in five years, and he continues to find new agents. This year 73 percent of agents are first timers, and the U.S. contingent comes from over 130 different cities. Underscoring today's new breed of advisors, he points to one agent who was a former advertising executive, and another duo who work from home, but are among the top 50 sellers worldwide for Ritz-Carlton hotels.
Advisors also see themselves as helping customers get more out of life. Anne Scully, president of McCabe World Travel was recently in Paris. “I was trying to show people how there were no lines at the Louvre. It was sunny skies and double upgrades at the top hotels.” She, like many are critical of the online folks who still think they can bypass advisors with technology. “There are only 168 hours in a one week vacation. It goes fast. Advisors make sure you do the things you want. They know how to help you schedule your time so you’re not rushing around, but you don’t miss things,” she says.
Can a computer do the same? “The only thing a computer is connected to is the electric outlet. That only thing that online booking is connected to is a plug,” she says. Speaking about consumers who book directly or via OTAs, she says, where there is a problem, the chickens come home to roost. "They spend a day or more trying to rearrange plans. It’s a shame,” she laments.
"The message from the OTAs is that they want the consumer to play doctor or lawyer," says Rick Mazza, CEO of American Marketing Group, which owns three agency groups, adding, "While it may seem like fun at the beginning, these stories illustrate how easy it is for even sophisticated travelers to lose money, vacations and lots of time. It's very sad. Maybe there should be a warning during the ads like they have on cigarette boxes or during the pharmaceutical commercials so consumers understand the potential consequences."
James Phillips, president of Travelbound, a tour operator that works exclusively through travel agents uses New York City as an example of where having a good travel agent can both save you money and enhance your experience. Speaking on a panel during the ASTA Global Convention held in Reno this week, he said, “People think, oh, it’s New York. I don’t need a travel agent. But the good agents know what you are looking for, and can find deals that you would never think of on your own." He tells of a friend who was originally going to stay at the Doubletree in midtown until an agent found The Ritz-Carlton Battery Park at a lower rate.
If agents needed any positive reinforcement, it came this week from a somewhat odd source. Various agency groups have been at odds with Marriott International since it launched a “book direct” marketing campaign last year encouraging consumers to book via its website. While other hotel groups do similar, Marriott raised the ire of agents in that one execution inferred that booking direct might be preferable to using a retail travel agent. Though it was common knowledge in the industry the campaign was mainly targeting OTAs, where the cost of a booking can be as high as 30 percent of the transaction compared to about 10 percent with retail travel agents, Marriott never really came out and said so in a very public way.
Speaking to the ASTA gathering, Marriott CEO Arne Sorenson, just days after closing its acquisition of Starwood, spoke of his company’s challenges with online intermediaries and the prospect that Google, Facebook and other social media and search powerhouses may jump into the travel transaction business, attempting to separate his company from customers and add a level expense. He lamented how Marriott has to pay just so its hotels are listed above intermediaries in search, and referred to Marriott Rewards, which combined with Starwood Preferred Guest has 85 million participants, as its “moat” in protecting its relationship with those customers. It was not a particularly aggressive analogy for the leader of the largest hotel company on the planet.
Then asked about the future for agents, it almost sounded like he wouldn't mind trading places with some of the entrepreneurs in the crowd. He told them on the corporate side, agencies are needed to manage complicated travel programs and compliance, and then on the leisure side, complimented agents for putting together memorable vacations, and almost longingly added, “You have a strong relationship with your customers.”
Dave Hilfman, Senior Vice President, Worldwide Sales at United Airlines went a step further. He implored the audience to provide him suggestions on how the Chicago-based carrier could improve its business from agents, a 180 degree turnaround from the late 1990s when airlines basically told travel agents to take a hike by cutting commissions, launching direct booking portals and bankrolling the online travel agencies they now are fighting with.
Zane Kerby, the CEO of ASTA has a bit of a different take. “We’ve had online booking for nearly 20 years. What’s happened is a lot of consumers have tried it, and have figured out that booking with a real travel agent is a better experience.”
A look at OTAs backs up that assessment. Consumer satisfaction rating are often lower than discount airlines such as Spirit or Ryan Air, and the litany of complaints extends to even relatively simple trips. Michael Holtz, owner of New York-based travel agency SmartFlyer notes agents routinely save clients hundreds and even thousands of dollars on roundtrip flights. He points to a family of four that wants to go from Dallas to London and back. He says, when consumers go to OTAs and airline websites, and request four seats, the results only provide the lowest price available for all four seats. A savvy agent however knows how to search various fare buckets and can often find two or three seats on the exact same flight, often for hundreds of dollars less per ticket.
Mike Batt, a former British Airways executive and Chairman/Founder of Travel Leaders, another major agency group, told me last year he thinks the renewed romance between suppliers and agents is being driven in that agents sell higher rates at hotels, mainly because they provide value, knowing sometimes for a few dollars more, there are valuable upgrades and perks such as free breakfasts, lounge access and so on.
Either way, if you're still not a fan of travel agents, let me know how it goes next time a snowstorm cancels your connection in Denver and the VIP Executive Diamond line to your favorite airline or hotel company lets you know there is a 75 minute hold time.