The travel agency channel was a high-tech of industry in the 1970s and 1980s. Retailers worked on big-box computers and used almost as much code as programmers to book tickets and make reservations. As decades progressed, the segment changed and was often criticized for being less than tech savvy.
Today, the travel agency business is fueled by AI, apps, businesses run on tablets and smartphones and a social media expansion in marketing and customer engagement.
"Something is happening in this channel. Established tech firms are getting funding and are building out more features. Additional rounds of funding is such a good sign. People are buying from advisors via text, WhatsApp, WeChat. The advisors have taken technology and transitioned it to help meet clients where they are. Agents are much more flexible and nimble … something Expedia and OTAs cannot do," said David Kolner, senior vice president, global member partnerships at Virtuoso.
Virtuoso is one of the lead sponsors of a new research initiative by Phocuswright. Phocuswright will commence research of the U.S. travel agency market during 1Q2018. The U.S. Travel Agency Landscape landmark study will analyze the complex and changing business models of the segment. Phocuswright has been researching the travel agency distribution landscape in the U.S. since 2006 and the 2018 study will be its third comprehensive look at the travel agency market (the first study focused on 2006-2009 and the second on 2008-2013).
Virtuoso is the first to contract with Phocuswright as a Platinum research partner. "With respect to research, it is always important to create data that shows the value of the distribution channel and to draw attention to the entire industry for suppliers, for the media and for the industry at large," said Kohlner. He said so much has changed in the demographics and business models of the agency community as well as the role of technology and the acceptance of consumers to using agents. "There has been a renaissance of the travel distribution channel. These changes have made travel advisors accessible to the public and available in their local market. Personal connections and networks that were the foundation of original businesses – such as being in the business and social community – wasn't as scalable but is now as independent contractors expand. Consumer reach of independent contractors has changed the industry and fueled the growth, not just for Virtuoso, but for everyone."
The travel agency landscape appears to have stabilized, but its demographics have morphed in the process. The U.S. Travel Agency Landscape study will explore business models, technology choices, booking patterns, mobile and social strategies, online activities and loyalty among agents to suppliers and among consumers to their agents. The agency landscape will be analyzed across their supplier relationships, consortia and affiliation partners and their technology providers.
"The rise of the service economy and the challenges of do-it-yourself have escalated the growth and complexity of the travel agency model. With a multitude of affiliations, business models and locations, travel suppliers have a much more diverse audience to find and service," said Lorraine Sileo, senior vice president, research and business operations for Phocuswright. "Our team is anxious to dig deeper into the complexity and help the industry understand what their sales force really looks like today, what role technology plays in their business and where they are headed in the future."
In the 2013 Travel Agency Landscape Study, mobile was such a small part of the equation. Kohlner anticipates a very different picture to emerge with the new research. "With respect to technology, there is a misnomer that this channel is tech-averse. Nothing could be further from the truth. New millennial advisors or old established mature advisors, I have so much respect for them. They are constantly testing new systems. The best travel advisors are curious, a creative force."
Virtuoso believes the combination of creative and effective technology and human interaction is what is making the travel advisor competitive. The new Travel Agency Landscape study will explore the multiple definitions of "online" in this segment as well. Many traditional retail-type businesses generate customers online but service these customers and close the deals offline. Independent contractors have risen to a level of high importance for suppliers as top agencies grow through these off-location sales people.
New and different business models will be explored in quantitative and qualitative research. Kohlner predicts the results will show how dramatically the segment is changing. "They are morphing into complete lifestyle consultants. The channel is blurring the edges."
As Phocuswright commences this third U.S. Travel Agency Landscape study to analyze the complex and changing business models of the U.S. travel agency market, limited opportunities are still available for participants and sponsors to help set the research agenda, gain access to unpublished data, and more. Click here to find out more about The U.S. Travel Agency Landscape study.