Airline Market Research

Recommendations and Conclusion on Airline Market Research


From these data, PhoCusWright has determined that the shifts in market share between channels is making it challenging for traditional agencies to retain their market share among their existing base of customers. In fact, without deploying some or all of the strategies listed below, it will be difficult for travel agencies to survive.


Overall, travel distribution is more efficient with the application of the Internet and Web-based tools. The Internet enables customer and agency to be better informed, so when it is time to book a trip, fewer questions need to be answered and the customer is pre-qualified. It has disintermediated the role of travel agencies for commodity products and has shifted the cost of distribution from the supplier to the customer. While the loss of commissions has jolted the industry and forced some travel agencies to close, the market has shifted to re-position (or reintermediate) the travel agency as a valuable player in the distribution of travel. The travel agency is now positioned as the advocate of the buyer rather than a distributor of the supplier. This positioning should legitimize for agencies that they are charging fees for professional services provided, and not as subsidies for lost revenue. It is imperative for travel agencies, particularly small ones, to educate their customers of their value and be compensated for services rendered.


Airline Market Research


While it is true that Orbitz offers the most Web fares online, Web fares are also available on airline market research Web sites. Some airlines provide selected Web fares through other online agencies as well, such as Expedia or Travelocity. Offline agencies were previously at a disadvantage because they could not access Web fares for their clients unless they booked them directly on the airline Web sites or Orbitz. New technologies are now available that enable travel agencies to access Web fares for their clients on the GDS or via their corporate booking tool. GDSs are investing in these tools to help bridge this access gap. Sabre, for example, currently offers Web fares to its travel agencies via FareChase’s “screenscraping” technology, which “scrapes” Web fares from the supplier Web sites. The Web fares are integrated on the GDS screen along with published fares, although the travel agent must book the Web fares on the airline Web sites.


Corporate travel agencies also have access to Web fares via various techniques. For example, Orbitz provides its Web fares to Navigant customers via Navigant’s Aqua software. GetThere recently announced that its corporate customers can gain access to Web fares via its GetThere Multi-Source Engine. Multi-Source Engine enables corporate clients to view and compare choices from all electronic distribution channels: GDSs, supplier Web sites, direct connections and other sources. Web fares are available via screenscraping technology (tapping the airline Web sites), but are integrated into the GetThere booking engine so that travelers can compare negotiated rates, published rates and Web fares side by side. A technique called “proxy booking” allows travelers to book Web fares within the same interface rather than having to link to the airline Web site to make the booking. Thus, travel agencies can access and book Web fares for their clients; to make money, however, they must charge fees for these Web fares. It is the fees that differentiate the offline from the online travel agency. As indicated, a typical offline fee is $16, but can be as high as $60 per ticket. Orbitz, on the other hand, charges a $10 fee per booking. In addition, offline agencies and airline market research must fight the perception that Web fares are only available online.