Under the theme, “Are travel agencies obsolete?” presenter Jeff Jenks, president of Travel Is Fun Travel Agency, discussed the trend according to published sources, including reports from Travel International and the Wall Street Journal.
He noted that while some believe that the traditional travel agent is obsolete, and during the past years, major airlines have eliminated the commissions, airlines have offered lower Internet prices not found in travel agency systems and web pages.
He added that guideline travel services have suggested that they offer lower prices than travel agencies, suggesting that this did not signal the end to traditional travel agents.
“Travel agents will survive, but many airlines will not,” Jenks predicted. “Their direct client approach, using web fares is decreasing revenues instead of lowering the distribution costs.”
He further noted that Internet web usage statistics by travellers and by professionals in the market have been seriously misinterpreted by airlines and web marketers. “Web-based systems may shift market share away from the Caribbean,” he stated. “New user demographics will limit Caribbean sales growth from web-based systems in the future.”
From his research, he concluded that many online travel websites will not survive. He also reported that their expenses continue, in many instances, to exceed their revenue in the sale of travel, and depress major airline revenues.
“Travel agents can market the Caribbean,” he added. “Computers can’t.” Then looking at the major airlines, he noted that the airlines lost some $10 billion last year, and are expected to lose another $8 billion this year, with further losses next year.
“They use websites to reduce their distribution costs, but instead, this reduced their revenues even further,” he said. “They need travel agents to market their air travel.”
Jenks also predicted that one or two major airlines will fold during the next six to 12 months. He stated, however, that the folding of those airlines is expected to increase travel in the marketplace.
Studying airline profitability, the travel professional reported that in the early 80’s, there was a problem with the airlines, which resurfaced in 1991 and 1992, and again in 2001 and 2002, and is expected to continuethrough 2003.
Then, touching on the Internet, he questioned whether there is still Internet growth, then provided information which revealed that a leading web service reported that Internet traffic was doubling every 100 days. He later explained, however, that the internet companies counted all fibre optic capacity as traffic, which made their statistics useless. The travel agent then noted that growth in the field was around 1,000 per cent in 1995 and 1996 as the users changed from just scientists and scholars to the mass market.
“The growth has now slowed tremendously,” he reported. “Traffic growth could be as low as 40 percent next year.” He further revealed that broadband and high speed service, which was expected to make the new transformation, have not done so.
Jenks told those gathered that the Internet has been, and will remain a source for planning. He noted that online travel agency sites are really being used by 62 to 63 percent of travel clients. He further reported that destination sites are going down, and that web shoppers are changing, noting that the bulk of the shoppers over the next five years will be under 18, which is not a good market for Caribbean products.
Jenks then reported statistics which further revealed that shoppers aged 35 – 49, which are important in the market, will drop from 49 percent to 19 percent of the total e-shopping generation, and although teenagers will make up 20 percent, rather than five percent of the total, they are not good shoppers for the Caribbean.
He added that adults, aged 19 – 35, who currently represent 47 percent of new shoppers, will account for just 19 percent of the new shoppers by 2006.
He further noted that consumers, at least within the next 15 months, are concerned about not having enough money and time to travel; leisure travels are taking shorter one to three night trips, which does not include the southern Caribbean, there is an increase in the amount of senior tourists who don’t purchase travel on the web, and there are emerging destinations which are prompting other destinations to rethink the design of their products.
“These changing patterns suggest that agents are critical for marketing the Caribbean,” he stated. “It can’t be done by computers.”
Discussing purchases during the last two years, according to a Travel International study, Jenks noted that airline purchases and overnight lodging are going down, rental car purchases are going down, vacation packages are going up and there was no comparison for cruises.
“Caribbean Tourism Organisation (CTO) tourism needs agents to market the Caribbean,” he added. “Travellers using ‘Go Caribbean’, which is a product being developed, believe they get the lowest prices, but only airlines and hotels who pay Expedia, or the Caribbean hotels charitable trust are included.
“Many tour operators, travelling scheduled airlines and hotels are missing, so we have an imperfect system selling a product. “The higher prices, the longer flight times displayed and the connection displayed by Go Caribbean, will move travellers to Mexico and other perceived, less expensive and shorter travel times destinations.
The travel executive further stated that, according to the Airline Transport Association, the decision to travel by air involves many factors, including the total trip time, the size of the party, the total trip costs, including taxes and fees.
“We used to argue to the Caribbean countries that your taxes and fees are too high,” he explained. “Now the problem lies within the United States itself.”
He further described factors as the personal and procedural hassle, the availability of substitutes like Mexico, Puerta Plata and Cuba, the economic environment, safety and security perceptions, the quality of the product and the congestion found in the airports.
Jenks noted that web page booking tools present biased displays, often with preferential advertising and placing, and excluding most low fare airlines, wholesalers, charter air fares, and offer higher fares than booking through a professional travel agent.
He suggested that ministers of tourism, in place of Expedia, should allow consolidated air and chartered air-only seats to be sold to their respective destinations.
“Then travel agencies can build their hotel packages with all hotels, including time-share units, otherwise our clients will go to non-Caribbean destinations which seem to offer more for less.”
By Patrick McGregor
