What Is A Travel Agent?
Author: By Douglas Quinby, Senior Director, Research
Published: June 10, 2008
Every industry has its jargon, and if you've been around travel for any length of time, you know how much we relish our lingo. Industry-specific terminology can be an essential tool to facilitate shared understanding. RevPAR, ADR, RPM and load factor, for example, are four important business performance metrics used in the hospitality and airline industries, respectively.
But terminology in dynamic, fast-changing industries can also be confusing and even controversial; key terms can take on multiple meanings, or suffer from manipulation by corporate marketers. One need look no further than "dynamic packaging," one of the hottest buzzwords for nearly a decade. Ask 10 "experts" what dynamic packaging is, and still today you should expect no fewer than 10 different answers.
When PhoCusWright undertook research for its recent study of the travel agency distribution channelâ€”PhoCusWright's Travel Agency Distribution Landscape: 2006-2009 â€”we immediately encountered significant challenges in how to organize and describe this complex segment of the travel market. Of course, we all know that a travel agency is a business that sells travel. But try to get more specific, and we quickly become enveloped in shades of grey, with little black and white to be found.
Consider the definition of an online travel agency. We all know what an online travel agency is, right? But what about travel agencies that sell online? Four out of 10 traditional travel agencies have a Web site with online booking capability. That represents about 10,000 agencies.1 Only a small percentage of travel agencies report that online bookings represent more than 10% of sales, so at what point does a "travel agency" qualify as an "online travel agency?"
Perhaps among the most controversial of terms is "travel agent" itself, especially with the explosion of the home-based agent community. Some four out of 10 home-based agents work part-time and produce lessâ€”far lessâ€”than $100,0002 in annual travel sales. (This translates into annual income of well under $10,000, assuming commission of 12%-15%, plus some additional costs.) Does a part-time seller of travel who earns just a few thousand dollars annually qualify as a travel agent? Should productivity be the only criterion? What about experience? Affiliation? Training? Certification?
It is likely that those home-based agents would say "yes" they are travel agentsâ€”as would some fairly innovative host-agency businesses that have been aggressively promoting travel sales as a second career or a part-time work opportunity to people outside the travel industry. However, many more experienced travel agents, as well as some travel suppliers, interpret the trend as an influx of inexperienced agents interested as much in discount travel benefits as in selling travel. Many of them would say "no."
Such dynamics create large, sometimes controversial grey areas. But when conducting research to organize, describe and analyze a marketplace, terminology must not only be defined, it must also be specific, especially where so much potential for confusion exists. PhoCusWright's Travel Agency Distribution Landscape: 2006-2009 must and does draw lines in the sand. After thorough study and consultation with our partners, we developed definitions for some of these complex terms and issues.
Now we offer our learnings to the travel industry. You can download a free copy of our Travel Agency Distribution Landscape: Key Terms and Definitions here . This may serve as a guidepost for understanding, or perhaps a kick-off to controversy. Most importantly, we all can learn, which will help all of us do what we doâ€”only better. Have a look, and tell us what you think on our blog.
PhoCusWright's Travel Agency Distribution Landscape: 2006-2009 is available for individual sale and is available at www.phocuswright.com for Global Edition subscribers only.
1PhoCusWright's Travel Agency Distribution Landscape: Special Report