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  • Subject area(s): Hospitality
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  • Published on: 15th October 2019
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  • Number of pages: 2

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Before the internet, it was difficult for everyday people to organize their travels without the assistance of a Travel Agent. In the early 1950s, American Airlines installed the Magnetronic Reservisor, an electromechanical system of vacuum tubes and a magnetic storage drum that allowed the airline to store seat availability on a centralized platform available only to travel agents. The airline’s success with this system inspired them to partner with IBM to development of the Sabre computer reservation system. The system acted as a clearing house for US travel and was also exclusively available to Travel Agents. By the late 1970’s, reservation terminals were installed in travel agencies nationwide. The increase in travel agent hotel reservations and the advent of smaller and more powerful desktop computer systems prompted the creation of hotel reservations systems. Now, the reservation systems could be located at the hotel front desk, increasing convenience. In 1996, a small division of Microsoft, called Expedia, launched its website offering online bookings for air, hotels, and car rentals. Later that year, Travelocity, owned by Sabre, launched its own site to help the “do-it-yourself traveler.” As more and more people had computers in their homes and tablets in their hands, the once limited process of booking travel became accessible to everyone in a quick and simple way. This forced many Travel Agents out of business and created the theory that eventually the position of a Travel Agent would become extinct. However, as travel technology evolved, so did travel agents.

Advances in technology have allowed for the creation of third party booking sites such as Expedia, Travelocity and Orbitz. These website haves allowed for people to be their own Travel Agents. Before these sites, people never knew the real price of a hotel or flight unless they called the company providing the service directly. This allowed for Travel Agents to implement a sales method known as upselling. “Upselling is a sales technique where a seller induces the customer to purchase more expensive items, upgrades or other add-ons in an attempt to make a more profitable sale.” One of the major benefits of using a third party booking site to consumers is that they could now instantaneously compare prices the best available rates of many different hotels and flights. Even though not all Travel Agents used upselling techniques, it allowed for consumers to feel that they were extra protected. Right away third party sites took advantage of customers’ trust. This led to sell customers on the concept that they were getting the best deal possible, when this was really not sure. Another area to which third party sites took advantage of were through the taxes and services portion of the payment.  In a study according to New York Times, 73% of people look at the base rate of the hotel and disregard the taxes and service fees.

As tablets and smart phones became prevalent in society, many travel applications were launched.  These travel apps allowed for simplicity in the consumer’s hand.  An example of this is the Expedia commercial, what man is on his way to the airport and needs to book a last-minute flight. He simply gets in a taxi, not stressed at all.  Within less than a minute he is able to book a hotel and flight while he was on the way to the airport. Lastly, during the crash of the stock market into 2008, the American leisure travel by middle-class Americans significantly decreased. For many Travel Agents this was the last straw. With the combination of less people traveling and consumer usable technology, many agents closed shop. Now that you have a holistic view and understanding of the volatile industry that we call travel, let me prove to you why there is still a market for agents.

Argument:

Meet Johnathan! Johnathan is a thirty-five year old business professional who works for Morgan Stanley. He is in his fourth year at the firm and works seventy-hour work weeks. On a busy Friday night, right before Johnathan was leaving for the weekend, his boss stops him. “John, I need you to hop on a flight to Chicago so that you can go attend the National Investment Banking Conference. Unfortunately, I can’t go anymore and they’re requiring me to send a delegate. Thanks bud.”

Now our good friend Johnathan has gotten himself into some sort of a pickle. The primary reason people like Johnathan hire travel agents is to save time and money. Let’s first start with the former aspect of savings, time. Individuals who are going on vacation or on corporate travel usually lack one thing, the time to plan the trip. Then again, if they weren’t working to earn money, who would be covering the cost of the trip? Travel agents take this burden off of you be investing their time in making sure your trip goes as planned. After given some simple information, a travel agent can work wonders and a build a comprehensive itinerary to your specific needs. The later part of the savings, and more obvious one, is money. There is a common misconception that with a click of a button any individual can find the lowest price on the market. That by comparing prices from thousands of different sources, you will be able to “go and smell the roses” at the lowest price. Well, the truth is, travel agents have access to other airline and hotel sellers that the regular public does not. Travel agents are able to work with air consolidators that are not able to sell to the public. Air consolidators have special contracts with airlines. This way they are able to purchase a bulk number of seats at an economy rate. They then go and sell these seats to travel agents at a price higher than which they purchased it, but lower than the public rate. Additionally, there are certain fairs known as “private fares.” A private fair is a special rate that only agencies can book. In order to book one, a registered travel agent must log into their Global Distribution System (GDS). So although expedia may be showing the cheapest round trip ticket from JFK to LAX at $650. A travel agent may be able to purchase a round trip ticket as a private fare or from an air consolidator at a lower price.

Meet Allison! Allison is a twenty-two year old college student who is planning on going home to spend the holidays with her family. With the knowledge that flights usually rise in price as a departure date get’s close to festive (Before Christmas – After NYE), she booked a flight as soon as the inventory became available. Fast-forward ten months, and Allison arrives at the airport excited to travel home. As she sits at the gate, she makes friendly conversation with a fellow passenger. “Wow this flight is packed! Thank god I booked so long ago,” Allison says. “Yes, I booked just two weeks ago and got a great rate. Only paid $103,” the woman sitting next to her responds. Allison is immediately puzzled as she recalls she paid close to $300 for the one way ticket.

Furthermore, there are several other ways travel agents aid to help your wallet. Besides from purely obtaining the lowest rate at purchase, travel agents babysit your ticket. It’s actually their job to babysit your fare. You see, what Allison didn’t realize is that two weeks before her flight the fare dropped by around $200. Allison was to worried about passing her midterms and didn’t bother to check if the price of the flight dropped. To give you a better understanding of the situation, here is what happened in technical terms. Every airline agency has a department called Revenue Management. Their job is to monitor and determine the pricing of flights base on the amount of inventory sold. In the case of Allison, her flight home was only filled by thirty percent of capacity. So the revenue management department, with the use of their algorithms, dropped the rate by almost half in order to incentives more passengers to purchase tickets and fill the plane. Airlines have a minimum amount of sales they have to hit in order for the flight to be profitable. These algorithms use artificial intelligence, by analyzing the accumulation of data from several different years, to determine how many flights to schedule a day. So in the case of Allison, while she was too busy studying, the Revenue Management Department decided to decrease the price of the ticket in order to reach a higher chance of profitability. Unfortunately, airlines are not kind enough to send you an email about the change in price, so it is your responbility to constantly check. Now, if Allison had a travel agent, she would have been upodated about the price changed and refunded the difference by the airline. Another way in which travel agents can save you money.

The next area of purpose that travel agents help to augment is responsibility. Without further ado, let’s meet Sasha. Sasha is a thirty-eight year old single mom, traveling with three children to Disney World in Orlando, Florida. All of sudden, the gate agent makes an announcement. Her flight was just cancelled due to a maintenance issue and she is stuck at the gate with three cranky children. Immediately, all of the ticketed passengers sprint to the Delta help desk. Once Sasha is able to gather her things and control her children, she finds herself at the back of the line. Not only is the line long, but all possible availability is being given to passengers before her. By the time Sasha gets to the front of the line, she is told the she has two options. She can either be confirmed on a flight two days later at 6:00 am or stay at the airport and fly standby.

If Sasha had used a travel agent to book her flights, she most likely would have been in  a different situation. Let’s play this out as if Sasha made that decisions. Upon her flight getting cancelled, Sasha would have called her travel agent. The agent would have been able to confirm her on the next available flight instantaneously. This would have been done, once again, through the effective GDS system. The agent would simply pull up their PNR (Passenger Name Record), and reissue their ticket onto another flight. This would be happening simultaneously to the long line burgeoning behind the delta help desk. Furthermore, the agent would have been able to get their passengers’ ticket refunded. The agent would have recognized that the reason for delay was an IROP (Irregular Regulation Operation), which constitutes a full refund. This is just one example of how travel agents can take on responsibilities of their passengers. To learn other benefits that go with responsibility, let’s meet Arthur.

Arthur is a forty-five year old doctor who is traveling home from Seattle. It is imperative that he makes it back to see his patients on Monday. However, he receives a news report that there are high winds in his home city of Boston. On top of that, he learns that the east coast is expecting a major storm. He immediately calls Delta to try to switch onto an earlier flight; though, an FAA weather advisory has not been posted yet.  After finally getting connected to a representative after an hour and half, he is informed that the change will incur a $200 change fee. Unwilling to pay, he takes his chance and heads to the airport.

Now, let’s just say that Arthur was intuitive enough to utilize a travel agent. There are several things that they could have done to mitigate the inconvenience. To start, the agent has the ability to hold space without paying for the ticket. All they have to do is add another segment into the record. With that being said, Arthur’s travel agent, who’s responsibility is to know about inclimate weather, would have reserved him a seat on the flight before and the flight after. They would then give a courtesy call to the client and ask him his or her preference on what they would like to do. At the end of the day, they get their clients home safe and efficiently. Let’s throw a curveball into the equation. For the sake of the argument, let’s say that the flight Arthur wants to get on is fully booked with a waitlist. Travel agents have the ability to do what is called a “PCRA Push.” The short code stands for the practice known as a Priority Customer Re-Accomadation, and places the flyer on the top of the standby list, regardless of who is already on it. Once again, the responsibility has been shifted from the passenger’s side to the agents.

The next advantage that travel agents bring to the table is knowledge. Travel agents have knowledge in many different areas. Many agents have knowledge in terms of being a worldwide concierge. They know the best restaurants and what attractions to hit. Additionally, agents possess knowledge in terms of being experts in the fine print and travel regulations. Lastly, and one of the most revered type of knowledge, is knowledge through connections.  Travel agents are well connected people, with relationships in all sectors of hospitality. To learn more about these advantages, let’s meet some more people.

Next up, we have Jessica. Jessica is a 21 year old girl who is traveling to Aruba with her boyfriend for their anniversary. Jessica is what we like to call in the industry a “millennial traveler.” Like many millennials, Jessica likes to take matters into her own hands when planning  a vacation. Her motto is that as long as you do research, there’s nothing that can go wrong. Little does Jessica know, she’s about to be on the trip from hell. When Jessica and her boyfriend arrive at the airport they are informed that they cannot travel. Although Jessica did a thorough job on her accommodations, she neglected to realize that her passport needed to be six plus months valid. A poor start resulted in the couple having to wait a full day to expedite new passports to be issued. Fast-forward to the couple’s arrival at their hotel in sunny Aruba, and they are informed by the front desk that they will be re-accommodated at the sister hotel, in town and not on the beach, because they are at full capacity. The third party booking site that Jessica used overbooked the hotel and her reservation was bumped. It was noted in the fine print of her reservation, but she did not bother to look. Trying to stay optimistic, Jessica and her boyfriend check into the new hotel and go to the pool. Lastly, as the couple prepared for dinner they headed out to the islands number one restaurant. To no surprise, the couple did not make any dinner reservations for the entire week.

As you know, especially in the industry of travel, knowledge is key. From the story above, we can make the educated guess that Jessica may have confidence, but she is lacking in the area of knowledge. Any travel agent would have been able to tell the couple that you cannot travel to the Caribbean without a valid passport with six-month leeway. Furthermore, travel agents make hotel reservations directly with the hotel. This way, all accommodations are confirmed and secure. Finally, travel agents are like a personal concierge service. They have knowledge not only in what the best restaurants are but also how to get into those restaurants. Nonetheless, dinner reservations are just the tip of the iceberg. Travel agents can reserve cars, plan excursions, and are at your service 24/7.

The last benefit of booking with a travel agent are the perks. Today travel agents are

The Emergence of a New Clientele:

 As we exited the recession, we saw a new type of clientele that travel begin to form.  This is known as our millennial travelers. Millennial travelers are unique and different friend any demographic/group travelers in the past. Millennial travelers are focused on life experiences and luxury. I also like to get a good value of their money. A quote from the Chicago Times Tribune states: “millennial’s would rather spend three nights at a Four Seasons, than two weeks at an all-inclusive generic resort. One would think that millennial travelers would be the ones to least use travel agents. However this is not the case. Millennial travelers has become aware White travel agents have to offer.

In order to find a new niche in the market, travel agents that sound luxury hotels and resorts began to offer their top producers special benefits that could be extended to clients. These free benefits ranged from complimentary breakfast to upgrades even free massages. These special programs we’re not able to be joined by any agent. Only a hand full of agents would be able to be a part of these different programs. This paved way for the company Virtuoso to revamp its program and control take control of the high-end market. Virtuoso is now the leading luxury travel network. It includes over 770 agency locations with more than 15,200 advisors in 44 countries throughout North and South America, the Caribbean, Asia-Pacific, Europe, Africa and the Middle East. Knowledgeable Virtuoso travel advisors draw upon first-hand experience and unparalleled connections to partner with clients to craft the perfect vacation. Travelers who work with a Virtuoso travel advisor get access to more than 1,700 of the world’s premier travel providers such as hotels, cruise lines and airlines. They also enjoy exclusive products, VIP services and privileged access.

The first misconception people have about booking trips is that they can easily book the same trip on my own without using a travel agent. Sure, you can book a trip yourself, but it may not be the same trip that you'd get through a travel agent. "If they book it themselves, they're just a credit card number" to a travel supplier, says Anne Morgan Scully, president of McCabe World Travel, a Virtuoso agency in McLean, Va. "I make a point of knowing the general manager of the hotel where they might be staying and I usually call the GM the night before one of my clients arrives and see if they might be upgraded. If they book with a good agent, they're known on arrival." Agents are especially useful on specialized trips, whether it's a honeymoon, a cruise or an adventure travel vacation. "Anyone can book a hotel room and a rental car but I sell romantic trips and adventure travel to Africa," says Jonathan Haraty of Jon's Dive & Travel Services in East Longmeadow, Mass., a Tripology agency. "Do you want to take a chance on booking your own hotel or safari camp in Africa? Will someone be there to pick you up in the airport in Nairobi? I know people who've been stranded when they arrive. That's one reason you need an agent."

The second misconception that people have is that theh can get cheaper prices online than I can when booking through a travel agent. "You could be correct," Scully demurs, "But it's not what you pay walking in the door, it's what you pay when you leave." She's referring to the upgrades that a good agent can get for a client, upgrades based on a relationship with a hotel, a cruise line or a tour operator. Agents who send clients to the same properties get to know the staff. The hotels and cruise lines, for example, want repeat business, and might reward the agent's clients with perks like a room or cabin upgrade or a bottle of champagne. It could be complimentary breakfast during a stay or even a spa credit. These are much more than niceties. The value can add up quickly when the hotel in question is charging $25 or much more per person for breakfast or hundreds of dollars more per night for a larger room category. Scully says that even if a client finds a good price at hotel, she can often make a call and get a perk or two thrown in to sweeten the deal.

The third misconception is that all Travel Agents charge surcharges and fees on top of the price. Some certainly do. Travel agents get paid on commission by hotels, airlines and resorts, but many more are charging fees on top of that because of their time. Putting together an itinerary, particularly one involving a complicated trip, like a safari, or booking multiple tickets and transfers for an extended family vacation, is a lot of work. Charging a fee is a bit of insurance for all of the time and effort put into creating an itinerary in the event that a client ends up canceling. "You could spend three weeks creating an itinerary and then a client could take it and shop it around for the lowest price," says Haraty. "When I plan a trip to Africa, it could be 100 e-mails back and forth, multiple phone calls, and two months before its finalized."

That said, everyone handles fees differently. Some agencies charge fees up front and then drop the fees when the client actually books. "There's a movement among agencies that you should be charging refundable fees," says Haraty. "You'll see more agencies charging, say, $150 to $300 to put a trip together but then you get that back when you actually book with them."

The last misconception people have is that all travel agents are the same. "Absolutely not," says Scully. "It's like picking a lawyer, doctor or dentist. They need to be right for you and certified by the right organizations. I think people have to realize we are counselors and concierges and lifestyle planners. People should choose a travel planner the way they choose a financial planner." Scully herself is a Certified Travel Counselor and has a Certified Travel Industry Executive Program certificate from The Travel Institute. Certification aside, the best agents today are specialists who have drilled down to know everything possible about cruises, all-inclusive resorts or Southeast Asia. Haraty's specialties are Africa, romantic trips and diving, and they sometimes end up combining in unexpected ways."Many of my clients are adding diving trips to their African honeymoons," he says. 'You'd be surprised just how many honeymoon brides want to cage dive with great white sharks off Cape Town."

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