Distribution reaches point of "equilibrium"
Rather than sealing the fate of traditional travel agents, the rise of online and direct distribution channels is instead seeing the travel industry achieve a new “equilibrium”, according to Travelport.
Speaking to Travel Today, vice president and regional managing director Asia Pacific, Patrick Andres, said predictions that traditional agencies would be smothered by the growth of online within a matter of years had not been borne out for a number of reasons.
Although he admitted that significant growth in direct sales has been seen in recent years, he stressed that is a “normal” part of any evolution.
“Anything that’s new will grow faster,” he said.
But many airlines that were once entirely direct have now reevaluated their distribution mix.
“They are now stepping back and saying that they value the travel agency community, they value other forms of indirect distribution,” Andres said.
“You always get to this point of equilibrium.”
The introduction of online travel agents to the distribution landscape has also not resulted in the wiping out of traditional “bricks and mortar” agencies, mainly because of the diversity of the marketplace, Andres continued. Although many will now turn to the internet, others will always prefer face to face interactions.
“It’s all driven by consumers and how consumers ultimately want to buy travel.”
Agents are also finding a new role as interpreters of increasingly complex airfares, with more and more carriers now exploring the full potential of merchandising.
“From the airline side, they’re certainly looking at ancillaries as a new area of growth – things like extra bags, premium seating for example,” Andres said. “They’re merchandising their product a lot better.”
As a result, Travelport is adapting its systems to communicate the new products to the travel agency community.
“In turn, the travel agent community wants to understand these products. The same way that we adapt to the needs of our customers, they’re needing to adapt to the needs of their customers,” Andres said.
“Travellers are going to travel agencies and asking what they are getting and what it all means.”
But there is still much more that airlines can do, he insisted.
“There are coffee chains which sell coffee but really sell so much more – sandwiches, CDs, t-shirts,” he said. “Airlines have to start understanding they’re more a store than just a provider of travel. They can add a lot of components to what they are doing.”
Email the Travel Weekly team at traveldesk@travelweekly.com.au
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