The death of travel agencies

Image: Laura Parr

Traditional travel agencies can be declared dead as their loyal baby boomer customers look elsewhere, says Laura Parr.

Travel agencies have long been dying. It’s only now that baby boomers are shunning them that the nail has really been hammered into the coffin.

Statistics from Roy Morgan show that in 2005, two-thirds of baby boomers in Australia were booking their holidays to the Asia Pacific region via a travel agency. Come 2012, and this statistic – while still the single most popular option – has dropped to just over half.

Image: Roy Morgan, 2005

Instead, 30 percent of baby boomers who travelled to the Asia Pacific booked directly through an airline, around 25 percent directly booked their accommodation and just over 10 percent used an online-only booking company.

While our 50-to-65-year-old baby boomers may not have been born into the Information Age, statistics show they’re not afraid to look to online booking options over the traditional bricks-and-mortar travel agency.

Jane Ianiello, Roy Morgan’s International Director of Tourism, Travel and Leisure, confirms that it’s a trend that’s expected to continue into the future and across all regions.

So how can we expect travel agencies to survive if the demographic you’d expect to use them most, is looking in another direction?

The answer for many is that they simply can’t.

Sure, you can go into a travel agency, pick up some glossy brochures and chat to the agent about your best route for your upcoming European holiday. But that doesn’t actually mean you’ll book through them.

More often than not, you’ll be equipped with a wealth of travel information (free of charge) as you go and book cheaper versions of flights and accommodation through chains directly. Unless travel agencies charge upfront – which many customers may consider a deterrent – they’ll be wasting their time and not making any money.

On the other hand, there’s no stopping you planning your entire holiday without a travel agency altogether. In 2009, travel information site TripAdvisor had more than twenty million unique visitors each month, providing readers with a myriad of customer reviews and ratings of hotels all over the globe.

The appeal is alluring – for no cost whatsoever, you can know straight from the mouths of travellers themselves if they’ve slept on 100 percent Egyptian cotton sheets, or alternatively, a nest of bedbugs.

While older seniors have been generally far removed from the Internet in the past, Ian Patterson from the University of Queensland found that “this is quickly changing as a growing group of younger baby boomers in the 50 to 60 year age group have become significantly more attached to the Internet.”

I can vouch for this first-hand, recently travelling to Europe with my baby-boomer parents for three weeks. Through a combination of direct and online bookings, my 57-year-old father booked the entire trip by himself. This included flights, accommodation, site seeing and rental vehicle spanning from London to Paris, to Switzerland and a loop right through Italy.

There was no travel agent in sight, and as we found out, no fake-bookings or dodgy hotels. It’s a fact that through building brand names and a reputation, the Internet is becoming an easier means of researching and booking overseas holidays.

The truth is, however, there will always be travellers – regardless of age – who prefer the guidance of an experienced agent they can meet with face-to-face.

Those agencies who base their business only in bricks-and-mortar will continue to crumble to the ground.

But those who can see the online sector as an opportunity rather than a threat can benefit from both worlds, and will only see growth with customers.

Such an agency is the Australian-born Flight Centre. Instead of counting down to their departure, the agency brought in a net profit of 43 percent this past year. It was the first time in the company’s 17-year-history that their net profit had exceeded $200 million.

Their latest strategy is known as “bricks-and-clicks”, and as the name suggests, is one that combines their physical shopfronts with online opportunities. Customers can begin their bookings online and complete them face-to-face in store, or vice versa.

It’s official. We can say our goodbyes as traditional travel agencies go down the gurgler. But popping up in their place are agencies that are burrowing their way into the online sector, securing their place in the future of the Australian tourism industry, as well as in the eyes of digitally-savvy baby boomers.

Laura Parr

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4 responses to “The death of travel agencies

    • Thanks for your comment Traveline Specials – always great to hear feedback! Has it been a challenge to compete with online booking alternatives or do you find the online sector has been a fantastic opportunity to expand your agency? – Laura

      • Honestly, it is challenging in some ways but it weeds out agency competition that is sticking to traditional methods. For example, we do the booking engines on some airport websites so when people are booking through the airport, we are doing the actual sale behind the scenes. We share the commissions with the airport which help them bring in additional revenue compared to using an engine like Travelocity or something where they would not get anything. -Vicky

  1. Pingback: Baby boomer bookings: online versus agent | Baby Zoomers·

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