As travel suppliers report record sales, they are also reporting record revenues coming from a channel that was supposed to be going out of business less than a decade ago – retail travel agents. Speaking to over 800 advisors who are part of the TRAVELSAVERS and NEST networks at their conference here in Florida, John Tolbert, the president of Waldorf Astoria’s Boca Raton Resort & Club said last year the hotel saw record sales through agents.
The over 3,000 agencies represented by the two consortia of independent agencies generated over $22 billion in annual sales in 2017. On the leisure side, they are mainly small and medium-sized enterprises, a seeming long shot in the battle against the behemoth online travel agencies and even their own suppliers who over the years have cut the commissions they pay and launched ad campaigns, loyalty programs and websites designed to generate more direct reservations.
The TRAVELSAVERS and NEST networks of travel agents met this weekend at the Boca Raton Resort & Club in Florida to discuss ways to keep the momentum in their battle against online travel agencies and suppliers for the hearts, minds and wallets of today’s travelers. Doug Gollan
However, it’s the smallness or at least the agility of the mostly owner-operated agencies that is proving to be the greatest strength of these middlemen. Against huge multinationals that have billions of dollars to spend on research and advertising, Jennifer Doncsecz, president of VIP Vacations, Inc., a specialist in destination weddings, says by sitting alongside her team of Millennial-aged advisors she’s been able to adapt businesses processes to the changing ways consumers communicate.
For example, while suppliers and online agencies vociferously are building their databases of email addresses and trying to minimize the expense of human contact via bots, Doncsecz says she was noticing many prospects who had initially shown interest randomly stop responding to emails during the sales process. Follow-up phone calls, she says, would go straight to voicemail. But when she started texting them follow-up information, she would get responses right away. The agency now asks clients how they want their communications, providing options for anything from email, phone calls and texts to direct messages through Facebook, Twitter, Instagram and Whatsapp.
Agents who once upon a time were constrained in building their businesses due to geography and the expense of advertising in newspapers, magazines, billboards and direct mail now have a myriad of digital and social network tools at their disposal that are free or cheap. Ryan McElroy, CEO of The Travel Valet and Travel Agency Tribes, pointed out 70% of pictures on Instagram are travel related and tools like Facebook advertising enable agents to target consumers cost-effectively. He says to reach 1,000 consumers who like a specific cruise line or destination can cost as little as $8. By sharing their expertise on social media, agents can develop new customers. At the same time, by following clients on social media and liking or complimenting clients’ posts agents can reignite dormant customers. It also gives agents a way to notice what people like and then target them with a tailored offering. For example, if a client is posting about wanting to go to Tuscany, an agent can email them a video about things to do in the Italian countryside.
“The internet is your best friend. When a consumer Googles any cruise line, there’s so much information there’s consumer confusion. Agents help guide the consumer into making the right buying decision,” Royal Caribbean Cruises SVP Vicki Freed tells travel agents from the TRAVELSAVERS and NEST networks of travel agents during their conference being held this weekend in Boca Raton, Florida. Doug Gollan
Suppliers seem to agree. Melissa da Silva, the U.S. president of Trafalgar Tours, a unit of The Travel Corporation, told the audience in the main session, “People don’t want to work with a faceless brand.” Vicki Freed, a senior vice president at Royal Caribbean Cruises, Ltd., told the agents, “The internet is your best friend. When a consumer Googles any cruise line, there’s so much information there’s consumer confusion. Agents help guide the consumer into making the right buying decision. You’re not selling. You are side by side guiding (consumers),” she says.
Adolpho Perez, a senior vice president with Carnival Cruise Lines, a unit of Carnival Corporation & PLC, says agents build their business “by delivering great services to clients who refer friends and families.” While cruise lines have been attracting first time cruisers with bigger ships and more amenities, Perez says agents are at the forefront, going into their local communities and developing groups, which often attracts new cruisers. The idea is five or six other families from your local scout troop or softball league are going on a cruise, so you feel more comfortable since you will be joining them.
Successful agents use the personal touch, says Dondra Ritzenhaler, senior vice president of Royal Caribbean’s Celebrity Cruises unit. Instead of the post-trip surveys you typically get emailed by suppliers, agents call customers who after a happy vacation are often glad to refer friends. Freed said smart agents actually get referrals before the trip even begins. She says as soon as you pay, a good agent will ask you if there is anyone you want to join you on your vacation. She says agents who do this convert about 25% of prospects.
Ellen Bettridge, president and CEO of Uniworld Boutique River Cruises, a division of The Travel Corporation, told the agents, “You know how to qualify customers. You know how to put people in the right products.” Guy Young, the group’s chief engagement officer, said over 90% of sales from its more than 30 companies, which includes luxury hotel brand Red Carnation, come from travel agents. Jason Montague, president of Regent Seven Seas Cruises said, “Agents make customers dreams come true, while Lori Sheller, a former agent and now vice president at MSC Cruises said good agents spend the time it takes to work with clients whereas suppliers closely track how much time each res agent spends on a call.
One reason agents today can focus more on service, professional advice and use social media to market themselves are groups like TRAVELSAVERS and NEST, which stands for Network of Entrepreneurs Selling Travel. Jim Mazza, the chief operating officer of parent company American Marketing Group, says more and more agents have handed off functions like issuing airline tickets to his company so they no longer have to spend time and energy to quality control air reservations or track weekly sales reports. Instead, they focus on the customer and being an expert on what they are selling.
What’s the future for agents? Dan McCarthy, the editor of Travel Market Report, a daily e-newsletter with a readership of over 100,000 leisure-focused agents in the U.S. and Canada, says smart agents have adapted their businesses to be more consumer-centric. Mazza noted when AMG launched NEST 12 years ago it received over 1,000 applications but ended up accepting less than 75. “There was a lot that wanted to book two trips a year from their kitchen table so they could get discounts,” he says. McCarthy adds the agents who are thriving today are the serious agents who are doubling down in their role as advisors instead of taking orders.
Camille Olivere, a senior vice president at Norwegian Cruise Line, told the audience that without agents to explain the various options of its promotions, which can provide over $2,500 in value and offer free alcoholic drinks, dining at its specialty restaurants or amenities such as WiFi, many customers simply miss out leaving freebies on the table.
It was Delta Air Lines in 1995 that initiated the push to sideline travel agents with the first round of airline commission cuts that were the main source of agent revenues at the time. During the conference, Jenny Ho, president of Delta Vacation, told the audience, “We no longer ask if agents will survive. You’ve proved your value. We’ve moved on to how can we support you.” Scott Wiseman, the president of Travel Impressions, a tour operator quipped, “If Mary and Joseph had used a travel agent, they would have had a room at the inn,” while Scott Nesbit, CEO of Globus Family of Brands, which operates both tour and river cruise companies, said when its companies get consumer calls, they try to refer them to agents who specialize in their products after taking training courses. “We know those agents are going to do a good job,” he says.
Of course, not everyone believes retail agents will prevail. Last year, Mark Okerstrom, Expedia’s new CEO, a former consultant with Bain, conceded, “In the race of man versus machine, in the area of delighting the customer, so far man has won,” before adding, “In the future, we think the machine can win.” While there’s no doubt the online agencies continue to sell lots of travel, how well they do it is open to question. The website Consumer Affairs gives his company just one out of five stars when it comes to customer satisfaction, and I’m guessing he hasn’t met the likes of Doncsecz or McElroy.