What would you say if I told you that travel agents aren’t in competition with online travel agency giants like Trip Advisor, Booking.com, Expedia, Priceline and others? Maybe you’re waiting for a punchline, but I’m honestly not telling a joke. What would a travel agent vs. booking online face-off look like?
While starting a home based travel agency in the shadow of internet giants like Expedia can feel like a David vs. Goliath scenario (umm, where the travel agent is measly little adolescent David), I’m here to bring you glad tidings of why travel agents have an edge over OTAs, and how they can save travelers TONS of time (and money) on their vacations.
Suspend your doubt and hear me out.
No Seriously, Americans Spend So Much Time Online Planning Travel, It’s Ridiculous.
Recent data published by Expedia documented that American travelers an aggregate of 8.7 capital-B-BILLION minutes of travel planning and booking time per year? It seems ludicrous, right? I know, I did a double take too. But that is the amount of time Americans spent consuming digital travel content in 2015, according to Expedia’s white paper, “The American Traveler’s Path to purchase.”
In the 45 days prior to booking travel—from beginning research to final purchase—the traveling American visited a whopping 140 travel websites. No seriously, that is a not a typo.
How much time does this add up to? Well the report indicates that in the six weeks prior to booking, Americans consume 22.95 hours of digital travel media.
Is your jaw to the floor yet? Well it’s about to get even more slack: According to the Bureau of Labor Statistic, the average hourly wage in the U.S. as of Aug. 2017 registered at $26.39/hr , which means that it costs American travelers $605.65 of work time to plan and book vacations.
What does this mean for travelers?
A). They better research and book vacations while they’re on company dime (preferably not their company) and hope they don’t get fired for it.
Or, better yet,
B.) Go with a travel agent, don’t get fired, and save over $600 of your time.
How OTAs Work, and Why They Don’t Save Travelers Money Anymore
The $600+ savings in work time really just scratches at the surface. There are tons of other ways that using a travel agent vs. booking online save clients money.
1. OTA Access to Inventory Is limited
When you were a kid and asked your parents for a snack, they probably didn’t open the fridge and cupboards and let you have at it. No, they probably pulled out a few choice items and say, “this is what you can choose from.”
OTAs operate in the same way. OTAs used to rely on ample off-peak inventory, and empty seats on planes and rooms in hotels to offer discounts, and it worked. Vendors would dump their excess inventory on OTA sites for a premium commission to OTAs. Heck, at the end of the day, selling a hotel room for cheap is better than zippo, right? But the OTAs are no longer the land of milk and honey they used to be.
There was a huge rise in the number of OTAs and suppliers smartened up, doing things like having contracts where OTAs were not able to offer prices lower than what the traveler could find directly on the brand site. They stopped offering premium commissions, and some vendors (like Southwest) even refused to sell their inventory on OTAs. (Does this sounds familiar? Airlines did the same thing, cut commissions to travel agents in the 90s).
In fact, it’s the vendors that price the products—not the OTAs themselves. So, like the stingy parent, OTAs will not (and cannot) offer the smorgasbord of travel products and discounts they used to. They can’t.
Now let’s jump back to the travel agent vs. booking online thing. A travel agent will open all their cupboards, and find the best value available. Heck, they’ll even take you to the grocery store and present a full range of available travel options. Travel agents will not only have access to product and pricing, but they’ll also have the savvy to know the nitty gritty of things like which seats on the plane are more spacious for the same price.
2. Price Discrimination and “Steering”
According to a Wired article, the OTAs pricing would shift constantly due to supply and demand. This means that customers could potentially be directed to sites that weren’t the best deals, depending on the quantity demanded while the traveler book (remember how they try to scare you with warnings of “2 rooms left at this price?”).
OTAs with their Big Brother-like technology know when and how a traveler is booking. So if a traveler is attempting to book a hotel, on a mobile phone, the same evening of their desired reservation date, the OTA’s magic algorithm will smell their desperation, and potentially steer the customer to more expensive booking.
Price discrimination comes into play when they charge different consumers different prices for the same product (which is illegal). According to the Wired article, at one point, “Orbitz was steering Apple OSX users, for example, to more expensive hotels, since the algorithm assumed that an Apple user was more affluent than a PC user.”
Agent don’t, and can’t, do that. There is a level of price stability when purchasing from travel agent—who can put holds on tickets and packages to preserve the price until the end of the day or for 24 hours. (Read more real-life ways travel agents save clients money).
3. Fine Print
Surprise! There are taxes and fees that might sneak up on the purchaser when they get to the checkout of an OTA.
With travel agents, the full cost to clients is transparent at the time they are quoted the price.
4. Group Bookings
Travel agents can especially save for clients who are traveling in groups. According to SmartFlyer’s CEO Mike Holtz in a Travel Market Report article, “travel websites will only show the lowest fare available for four tickets. But an agent might be able to find three seats at a fare hundreds of dollars less, with savings into the thousands of dollars.”
Travel agents—who are not governed by algorithms—have the experience and ability to analyze the options in front of them, and filter through them quickly in order to build group packages that maximize value and save money for their clients. Yet another reason to use a travel agent vs. booking online.