Online Travel Agents – A Boon Or Profit Eaters For the Airlines

It is no secret that the last few years have been difficult for the tourism industry. But amidst all this pessimism, one segment of the tourism industry that has ducked the downward trend and has flourished is online travel. One third of the total online transactions are related to travel, such is the hold of the online travel industry on internet. All-the-more, the sale of travel products is ideally suited to the online channel given the existence of a vast network of global travel suppliers (e.g. airlines, hotels and tour operators) and a widely dispersed customer pool; leading to a simple order fulfillment process as there is no physical product to be delivered to the customer.

All the popular airlines have websites of their own which help the customer book their tickets online and create brand awareness as well. Travel agents have also developed an internet presence of their own by creating travel websites with detailed information and online booking capabilities. The elite also feature detailed advisories on travel with brochures and travel tips. Although, airlines encourage the consumers to book directly through their websites in order to reduce distribution costs by eliminating the commission paid to the agent, the emergence of brand and/or product awareness has limited the impact of these single branded websites. In comparison, online travel agent has grown in popularity by facilitating the search for the best travel deal amongst different airline operators offering the independence and choice in terms of multiple brands and an extensive product range. For e.g., they give information not only about flights but the decisions a traveler takes after landing, like car rental, hotel booking etc.

The intermediary role of the online travel agent does not differ much from the role traditionally fulfilled by the high street travel agent. The online agent provides the convenience of 24-hour access and up-to-date information; but where they differ from a supplier in the airlines industry is when they facilitate the choice of several brands and products and of course the promise of the lowest price (which may not be the case many times); but it saves a lot of effort for the seeker and provides a one stop portal for his entire travel needs.

The present travel system has check marks at very important phases in the holiday cycle of a person. It makes him/her do a reality assessment at various important pit stops and make informed decisions ahead. Online booking is the first among these. It splits the traveler’s tracks by offering multiple choices and various options like lowest prices, packaged deals etc.

Those airlines, who view the online travel agent as a competitor rather than a strategic partner to widen their distribution reach, may increasingly miss out on incremental sales and profit opportunities. That is why travel agents are definitely a boon and not a bane for the airlines industry.

Author: Search Travel

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