After almost 20 years of losing market share to OTAs and suppliers’ direct-booking websites, recent research by Phocuswright suggests that the traditional travel agent’s share of bookings has leveled off as the agent role has evolved into a more expert level of service.
The report shows money spent on bookings in the U.S. grew 5% for the fourth straight year in 2015, totaling $341 billion. The total is expected to grow at a strong pace (6%) for the next two years, with bookings reaching $381 billion in 2017.
Of the total sum, 28% came from traditional agencies and travel management companies (TMCs), a percentage that has flattened out after declining for several years, according to the report.
Agencies and TMCs are expected to maintain that 28% share through 2017 (the remainder of bookings was made through supplier websites, OTAs and central reservations systems/walk-ins).
“It’s largely a matter of maturity of the online market,” said Phocuswright senior research analyst Maggie Rauch, one of the report’s authors. “It’s been many years now that travel has been shifting and travel buying has been shifting to online, and we just see that shift slowing.”
The business that remains for agents, Rauch said, “is primarily business travel and the most complex leisure trips.” That business remains strong, allowing for a level booking share going forward.
Most consortia, hosts and industry groups reported 2015 to be their best sales year in recent memory. Anecdotally, 2016 is shaping up to be even better, according to Ann Chamberlin, president of the National Association of Career Travel Agents (Nacta). She said Nacta’s members are reporting very strong sales so far this year.
Jennifer Michels, ASTA’s vice president of communications, said the Society’s membership is also reporting solid sales, as it has been “every quarter for the past several [quarters]; we hear optimism and growth in sales across the board.”
Chamberlin also said agents are getting better at booking the complex leisure trips that help maintain their booking share in the U.S.
“The agents continue to evolve to be able to book more sophisticated types of travel, which keeps [clients] coming back,” she said. That leads to positive word-of-mouth about agents and more potential business, Chamberlin added.
According to Phocuswright’s report, cruise lines also played a role in leveling off the market share of agency and TMC bookings.
“After a few years of holding traditional travel agents at greater length, they’re pulling them in a little closer, paying better commissions,” Rauch said, which the report called “a closer embrace by cruise lines.”
Rauch also said the leveling of agents’ booking share was aided by “cruise lines not being quite so determined to attract first-timers.”
While the new-to-cruise customer has always been desirable, she said cruise lines are putting more effort into courting repeat passengers.
“Agents are strong with repeat cruisers, and agents are also great to turn to when you’re trying to sell a bigger trip with more components included in the booking,” Rauch said.
Nacta’s Chamberlin said cruise lines “very much want a place at the table with travel consultants, whether it’s selling longer cruise product, more sophisticated itineraries or filling out their higher end.”
[Source:- travelweekly]
