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September 19, 2009

Changes in the travel industry

Interesting Q&A here with Henry Harteveldt, a travel analyst for Forrester Research Inc. I don't know that everything here makes sense - the talk about why there are more female travel agents bothers me a bit. Maybe there's a hint of sexism in there. The line that no one will ever get rich in the travel industry is a bit too much. Maybe travel agents won't get rich unless they do something really special would be easier to agree with.

But the other stuff I found interestying and more agreeable: travel agents finding niches, the decline in retail travel agencies, the stuff on 18% of travelers not knowing where they want to go, and the comment that websites never ask about your budget.

Posted by James Trotta at September 19, 2009 9:59 PM  

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(if this is a re-post, I apologize; I hit the wrong button during my response before)

I have been a part-time, home-based travel agent for a couple of years. I agree with much of what was said in the interview.

Part of the reason women are attracted to the travel industry today (as opposed to the old "brick and mortar" days) is the flexibility of working from home. At least half of the agents affiliated with my host agency are stay-at-home moms trying to supplement the family income while being available for their kids.

Of the rest, most, like me, have full-time jobs and are looking to supplement that income. Very few, maybe 5 - 10%, do this full-time and fully support themselves selling travel.

We're not going to get rich selling travel. It's a job, and like most jobs, you make a living (if you're lucky, hard-working, and good at it). Most people don't "get rich" at their job.

For home-based agents, it is also a business (so it has more potential for "getting rich"). I think the trend to home-based agents will continue because of the low overhead of working from home. I have never had a client come to my home; I do all of my business via email and phone. But I also do not get paid unless I make a booking. I can work with a client for weeks, and then they decide not to book the trip and all of my work is down the drain. Unlike a regular job in which you would have been paid by your employer for the time you put in, when you're a home-based agent you put in a lot of time for nothing. In my first year, I calculated that I probably earned about $3 - 4 an hour for the time I put into my business.

We are entirely commission-based, and many suppliers are cutting back, if not eliminating, commissions paid to agents. 20 years ago, most agents made a living just selling airline tickets. Today, I don't think there is a single airline paying commission to agents for selling tickets. Airfare is still a large part of any trip, but we don't get paid to sell it (hence, the fees some agents charge).

The industry is definitely still evolving. If there are fewer commissions paid, there will be more fees charged, passing the responsibility for the agent's income to the traveler (which is not, I feel, where it belongs). There will also be more home-based and fewer storefront agents. And, as indicated, agents must learn to use internet tools to build their business, instead of fighting it. I use online lead services, Craigslist, and email to conduct my business; you'll see more of this.

I can understand the move back to using agents; most of my clients are booking a really "special" trip - a honeymoon, a trip to China or a river cruise in Russia - and it's either something you can't find on Expedia or you want the experience of an agent to help with decisions. As agents learn to use the internet to build business, I hope we'll find the "best of both worlds" for the client - the ease of the internet with the expereince of an agent. That would be MY ideal travel industry!

Posted by: tripdiva at September 20, 2009 2:37 AM
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