Traditional Travel Agents vs Online Travel Agents

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Introduction

The conditions of the global travel agency industry have significantly changed over recent years, mainly because of the development of the new technologies, electronic commerce and the major changes in tourism consumer behaviour.

Increasingly, people are booking their travel over the Internet, directly from the suppliers or on electronic retailer’s websites affecting traditional travel agencies on the high street. Further, the market starts to show signs of overload because of the high competition.

Due to all of these factors, the industry is in an uncertain situation and high street travel agencies are worrying not only about how to secure their profits, but in many cases of how to survive. How can they gain competitive advantage over the travel suppliers who once used to be their partners, and who are now trying to cut them out of the distribution chain? Some sources predict that the end is in sight for the traditional travel agencies because of the competition with their online rivals. However, other sources report that consumers are slowly turning back to high street travel agents seeking a human touch. ABTA (2012) reveal that "consumers value the help of a human being and the reassurance of dealing with someone face-to-face".

In order to deal effectively with this problem of disintermediation, the topic has been researched with the purpose of investigating the future situation concerning high street travel agents.

Main body/ discussion

According to the latest figures from ABTA (2012) consumers are turning back to the high street travel agents. Its latest Consumer Travel Trends Survey has found a significant jump in bookings through agents over the last three years. It has also recorded a drop in consumers booking holidays direct with airlines and hotels.

This shift has been explained by confusion about the overload of choice on the internet and increasing concerns among consumers about being properly protected when travelling.

According to Travelmole (2012) report the percentage of people booking a foreign holiday through a high street travel agent has grown from 17% in 2010, to 25% in 2011 and 27% in 2012. While, the number of consumers booking independently organised holidays has fallen from 43% in 2011 to 27% in 2012.

Surprisingly, the younger generation of consumers seem to be the biggest fans, with 45% of 15-24 year olds value the services of a travel agent, up from 30% in 2011.

Mintel’s (2012) research shows that the older people get, the more enjoyable they find the whole planning/booking process and the more content they become with their holiday. Younger travellers, though, are more accepting to advice and guidance. For travel agents who can engage with under-35s, there may be not only short-term opportunities but long-term gains as they age and their travel needs change.

According to Page (2003) "Travel agencies are service companies which consists of meeting traveller ́s needs and expectations related to travels within the tourism market. Travel agents act as intermediaries between travel consumers and tourism suppliers and destinations."

The 3 main functions of retail travel agents can be described as: Carrying out a mediating function between tourism suppliers and customers acting as a middlemen on behalf of the consumers and making arrangements with tourism suppliers, such as hotels, airlines, tour operators, car rentals, etc. and been paid a commission from these suppliers. "The travel agents carries no stocks and the financial risk is low because they do not purchase products themselves, they receive a commission for each sale." (Page S. and Connell J.) Retail travel agencies mainly sell prepared package tours from tour operators. However they can also carry out a producing function - designing and organising tourism products generated by the combination of different services and prepare individual itineraries driven by the demand, so called...
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