Arnie Weissmann
A travel agent I know recently vented to me about a potential client who came to her for advice about where to go on his honeymoon. After spending hours researching options, she presented her recommendations. The client took the advice -- and booked it all online.
Sound familiar?
Many agents give themselves some measure of protection against this by charging trip-planning fees, but as I listened to 14 hours of pitches from digital entrepreneurs at the Phocuswright conference last week, it occurred to me that it would be quite possible for the opposite to happen: for travel advisers to take business from the OTAs by exploiting online resources.
There's a consumer trend and a retailing trend to encourage such a move.
A consumer trend that has frustrated OTAs is that brand loyalty is very low.
It's easy to see why: "Buy it for less online" has been the OTA mantra from day one. That eventually gave rise to metasearch sites that compare multiple OTAs and, to no one's surprise, online shoppers are more loyal to their pocketbooks than any single online brand.
This is in contrast to offline travel retailers, whose customer retention and loyalty rates are relatively strong.
The trend in travel retailing that also provides an opening for advisers to exploit online sites is the long-term move to niche expertise. For the most part, agents who focus on special events, geographic regions, lifestyles and affinity specialization do better than "all-service" agencies, unless those agencies have a team of specialists.
What I haven't come across yet is an agency whose niche specialization is expertise in digital navigation.
There is a need. The proliferation of travel websites and apps often leaves consumers feeling overwhelmed. And the 45 companies that presented at Phocuswright included a significant number of new entrants bringing additional trip-planning, -enhancing and -monitoring tools to consumers, further complicating the complex online travel universe.
Although the number of digital options can seem staggering, the number of useful and relevant sites and apps is finite and knowable. For consumers, who take fewer than two leisure trips per year on average, it's not worth the effort needed to gain mastery of online options; the landscape changes too quickly and significantly from year to year. But an agent who wants to be positioned as a digital guru could keep up. And make money.
The travel industry is huge, and digital entrepreneurs swarm all over it, looking for unfilled voids and unnoticed opportunities. For me, the most interesting presentations at Phocuswright tended to be niche developments vs. those presenting end-to-end solutions. Companies that claimed to automate the entire trip-planning process were the easiest to find fault with, and they also seem to have missed an important lesson behind the revival of traditional agencies: Consumers like specialization.
Here are a few of the more interesting companies I discovered at Phocuswright this year:
• Airmule identified a way to monetize a commonly underused asset: baggage allowance. They have established a system that enables passengers to sell their luggage space to air cargo shippers to help underwrite the cost of a trip (they'll pay up to $500 each way). Currently, its focus is on shipping to China, but its ambitions are broad.
• Roomertravel.com established a market and platform for reselling nonrefundable hotel rooms. If a traveler could not resist a low, nonrefundable price, but then has a change in plans, he or she can post it to Roomertravel, which takes a 15% fee on the resale price.
The company also offers a Life Happens protection plan for insuring a nonrefundable room. If a booker pays a premium of 6% above the cost of a nonrefundable room, then needs to change plans, he or she will receive a refund of 80% of the rate they paid, and the room ends up on Roomertravel's resale platform.
• Airhelp tracks flights for delays or cancellations, and if a flyer's rights are violated, the company automatically files a claim on the passenger's behalf. It will even go to court if the airline doesn't pay. (Airhelp keeps 25% of the recovered money.)
• Distribusion has built a platform for booking intercity buses in Europe, commissionable to resellers.
• Fastpayhotels.com incentivizes hotels to provide low rates to both traditional agents and OTAs through its platform by promising hotels quicker payment and lower associated costs.
This just scratches the surface of sites and apps that save consumers money and can help underwrite the cost of a trip. If an agency's specialization were to be online expertise, it could go the OTAs one better by marketing their know-how to customize a trip that optimizes the myriad ways that the digital innovation truly can bring down costs.
They could monetize this expertise both by using sites like Distribusion and Fastpayhotels.com, which pay commissions, and by taking a percentage of a client's savings as a fee.
If an agency truly became proficient at this and began to scale up its business, sites an agent used frequently more than likely would provide additional incentives or commissions. There is a path for agencies to use online resources to take business from OTAs.
Turnabout is, after all, fair play.