The proliferation of ‘factory outlets’ or ‘manufacturer-direct’ prices has become common place, but are we getting true ‘outlet or direct’ prices. The travelguidecompany, agent or even retailer is suffering in our modern internet-based environment and big-box stores which appear to offer rock-bottom prices but still make enormous profits are commonplace.
The world of agents from insurance to travel to financial are feeling the crunch as they are rapidly being considered as expensive cost overheads by the producer, provider or manufacturer.
The airlines started the demise of the travel agency system when they started eliminating agent commissions and over-rides and turned to online booking systems aimed directly at the consumer, forcing some retail agencies to charge additional booking fees. Now you can find airline reservation sites charging fees for online seat selection plus anything else that they can get away with. Are the savings they are making being passed on to the consumer?
Insurance companies began advertising for direct dealings as did banks with their development of in-house financial planners (not at all independent, but merely another name for a bank products salesperson). Are they keeping the old commission for themselves or do they pass on the savings to the consumer?
Let’s focus on one of the consumers’ largest expenditures over a lifetime – recreational travel, business travel, vacations and trips and the Retail Travel Agent or Agency:
1.These were really needed before the consumer could access websites from B&B’s to Hotels,
Luxury Lodges and Tour Operators or if you wanted to pick up an expensive glossy brochure.
2.These were really needed before travel providers and tour operators enabled the consumer to
book directly with them on the internet with reservation systems and booking requirements that required little training or expertise.
3.These were really needed before airlines promoted their own booking services and became more greedy for any extra percentage or fee and wanted to be rid of travel agents as expensive and redundant overheads.
Now, these agents are only really needed if travelers want knowledge, experience and expertise of specific destinations, activities or tour companies, or of course, those travelers still not using the web.
Let’s not feel too sorry for retail agents as top-notch travel consultants are essential to travelers who have complex itineraries or who are venturing to the lesser know areas of the world. All is not dark for travel agents with knowledge, experience and expertise as consumers who need these professionals now have access to them with the web wherever they may be located and no longer need to use local agents unless they have the requisite skills. But, they still have to be found as they may not be in your local area or even in your own country.
There are various forms and levels of travel middlemen – Inbound Tour Operators, Wholesalers, Retail Agencies, all of which earn a percentage from the original travel provider for their advertising, promotion and sales efforts, these percentages can be anywhere from 10% to 25% or even more! When you see a travel advertisement offering $200 off per person and you book through a retail agent, you are still paying the commission, so by booking directly with the operator you should get the special offer and also save the commission.
Some travel operators already offer their products directly to the consumer but at the same prices as the consumer would get from a retail agent. Fair enough if these providers do not use middlemen but if they also sell through retailers their prices should be ‘net of commissions’ for direct bookers and ‘retail’ for agency sales.
