Travel agency
Most travel agencies operate on a commission-basis, meaning that compensation from the hotel, airline, and customer is expected in form of a commission from all bookings. Most often the commission consists of a set percentage of the sale.
Most airlines pay no commission at all to travel agencies in the United States.
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The Internet threat
With general public access to the internet, many airlines and other travel companies began to sell directly to passengers. As a consequence, airlines no longer needed to pay the commissions to travel agents on each ticket sold. Since 1997, travel agencies have gradually been disintermediated by the reduction in costs caused by removing layers from the package holiday distribution network.[2][3]
Many travel agencies have developed an internet presence by posting a website, with detailed travel information. Full travel booking sites are often complex, and require the assistance of outside travel technology solutions providers such as Travelocity. These companies use travel service distribution companies who operate Global Distribution Systems (GDS), such as Sabre Holdings, Amadeus, Galileo and Worldspan, (now Travelport GDS ) to provide up to the minute, detailed information on tens of thousands of flight, hotel, and car rental vacancies.
Some online travel sites allow visitors to compare hotel and flight rates with multiple companies for free. They often allow visitors to sort the travel packages by amenities, price, and proximity to a city or landmark.
Travel agents have applied dynamic packaging tools to provide fully bonded (full financial protection) travel at prices equal to or lower than a member of the public can book online. As such, the agencies' financial assets are protected in addition to professional travel agency advice.
All travel sites that sell hotels online work together with GDS, suppliers and hotels directly to search for room inventory. Once the travel site sells a hotel, the site will try to get a confirmation for this hotel. Once confirmed or not, the customer is contacted with the result. This means that booking a hotel on a travel website will not necessarily result in an instant answer. Only some hotels on a travel website can be confirmed instantly (which is normally marked as such on each site). As different travel websites work with different suppliers together, each site has different hotels that it can confirm instantly. Some examples of such online travel websites that sell hotel rooms are Expedia and Orbitz.
The comparison sites, such as Kayak, TripAdvisor, and SideStep, search the resellers site all at once to save time searching. None of these sites actually sell hotel rooms.
Often tour operators have hotel contracts, alottments and free sell agreements which allow for the immediate confirmation of hotel rooms for vacation bookings.
Mainline service providers are those that actually produce the direct service, like various hotels chains/airlines that have a website for online bookings. Portals will serve a consolidator of various airlines and hotels on the internet. They work on a commission from these hotels/airlines. Often they provide cheaper rates than the mainline service providers as these sites get bulk deals from the service providers. A meta search engine on the other hand, simply culls data from the internet on real time rates for various search queries and diverts traffic to the mainline service providers for an online booking. These websites will not have their own booking engine.
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Careers
With the many people switching to self-service internet websites, the number of available jobs as travel agents is decreasing. Most jobs that become available are from older travel agents retiring. Counteracting the decrease in jobs due to internet services is the increase in the number of people travelling. Since 1995, many travel agents have exited the industry, and relatively few young people have entered the field due to less competitive salaries.[4] However, others have abandoned the "brick and mortar" agency for a home-based business to reduce overheads, and those who remain have managed to survive by promoting other travel products such as cruise lines and train excursions, or by promoting their ability to aggressively research and assemble complex travel packages on a moment's notice (essentially acting as a very advanced concierge).
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Cargo
A small number of companies work with cargo airlines and ships which are connected to cargo business.
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References
- ^ BBC Article, Consolidation in Travel Industry
- ^ Angela Andal-Ancion, Phillip A. Cartwright and George S. Yip (2003). The digital transformation of traditional businesses (HTML). MIT Sloan Management Review: Vol 44, no. 4 p. 34-41. Retrieved on July 14, 2003.
- ^ Marian Edmunds. "A wake-up call for the industry: As competition intensifies, online and mobile technologies offer huge opportunities across all sectors of the travel business", Financial Times, March 13, 2002, p. 10.
- ^ Rebecca Tobi. "Wanted: young agents! Are young people shying away from careers in travel? Agents and travel school operators say yes. Look around your agency—see any young faces?", Travel Weekly Vol 61, no. 43, 28 October, 2002, p. 148-149.
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Bibliography
Renshaw, M B (1997), The Travel Agent, 2nd edition, Business Education Publishers Ltd, Sunderland
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See also
- American Society of Travel Agents
- Computer reservations system
- International Air Transport Association
- International Association of Travel Agents Network
- Airline consolidators
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