With the genesis of OTAs and direct B2C opportunities, there was a time when travel suppliers were keen on working around the travel agent channel. But is the profession still as challenged in these relationships as it once was?
FOLLOW ANY SOCIAL MEDIA GROUP where travel advisors connect to communicate and support one another and it doesn’t take long to come across complaints about one supplier or another appealing for their clients’ business direct. It may be a tour operator, more often a hotelier – whether offering a credit that can’t be redeemed if the client were to use a travel agent or a rate that retailers simply can’t match.
But at the same time, as co-president of Ensemble Travel Group Lindsay Pearlman points out, it’s hard to come by a direct-to-consumer supplier campaigns that don’t suggest “contact your travel advisor” as part of the call to action. So, what gives? Is the issue of undercutting travel agents actually still an issue?
“I believe there was a point in time, several years back, that there was a concerted effort of disintermediation – the attempt to cut out the travel professional to go direct to the customer,” Pearlman tells CT. “Flash forward to today and that activity is still happening, but not to the degree it was.” Judging from recent online discussions, the observation is spot on. One recent post from the group ‘Agents helping agents’ reads: “I am a member of a FB group for clients who travel to the Mayan Riv (sic). There is currently LOTS (sic) of chatter about Bahia and changes that they’ve made to their past guest program. It seems that members can now only get credited for stays booked with Bahia direct. If they booked with a TA, it doesn’t count. One lady has stayed 23 times and only got credit for two stays since she normally books with a TA.”
“Getting frustrated with resorts that do this,” says one comment on the post. “The Friendly Vallarta offers past guests a very low rate if you call them direct. Nothing I have found can even come close. I have addressed it with one supplier and they told me that they dropped the Friendly because of this practice.”
Jen Smolik, a member of The Travel Agent Next Door, told CT that she believes “most suppliers are very supportive of travel agents,” though one recent experience with Excellence Resorts has her reeling. “If clients book direct through Excellence for an air and hotel package, it ends up being about 50 per cent cheaper than any other travel agent supplier,” she tells CT. “I bent over backwards to try to price match one package that a client could find for $7,300 but even my NET pricing was $3,000 more.”
When Smolik inquired with an Excellence representative about the discrepancy, the response was only that the company does not offer a commission for packages available on its webpage.
Which begs the question: Why bother working with Excellence and other suppliers that an agent or agents feel undermine their position? For Smolik and other agents CT spoke to on the matter, the answer is simple: They don’t – unless it’s a product their client really wants.
And this is where the discussion turns from one about price to one about value – and not just value of product, but value of service. Do travel advisors really need to work with suppliers that undercut their prices in one way or another? And do they really need to take-on clients whose main concern is the credit card charge and not the service being provided?
There’s no denying that there are supplier tactics that attempt to eliminate the travel professional in-between, but it seems that many are moving in the exact opposite direction. Take Carnival Cruise Lines, for example, which leaned heavily on the agency channel to rebound after a number of issues impacted consumer confidence in the brand years ago – think back to 2013 when 3,100 passengers were stranded onboard the Carnival Triumph due to a fire – without power or a working septic system.
Fast forward to 2016 when Carnival Corp. CEO Arnold Donald said that travel partners are “critically important” to its success. The company has put money where its mouth is, now offering an enhanced GoCCL Agent Portal, CCL Rewards and a ‘find a travel professional’ link on its website.
Collette is another example of a business that once had a reputation for its consumer-direct tactics, but in the past two decades has wholly invested in retail partners. As a result, more than 90 per cent of its business comes through travel agents, according to Christian Leibl-Cote, senior vice-president of global business, who credits the shift to Collette’s efforts in becoming “the friendliest company to the agents.”
What does that mean, exactly? “We don’t allow any discounters to use commission rates to rebate the tour, so we’re protecting travel agents,” Leibl-Cote says. “And, when clients phone into our call centres, the first question we ask is, ‘Do you currently work with an agent?’ If the answer is ‘yes,’ we need to make sure we connect the booking to the agent. If the answer is ‘no,’ we ask if we can recommend a travel agent, and then we give them to one of our preferred partners.”
On the topic of tour operators, Sunwing Travel Group is often criticized not only for its consistent investment in direct-to-consumer activations but also for its dealings with travel agents. For instance, one travel agent posted to a group: “Anyone else lose their DW (destination wedding) group to Sunwing’s Wedding Vacations department?!”
Weighing-in on the issue, Deana Murphy, vice-president of sales for Sunwing, admits that “a small portion of clients” go directly to them for group bookings and it’s true that product is available through multiple channels, though she adds, “we would never hijack a booking from an agent.
“To the very contrary,” Murphy insists. “We always ask any direct consumer request first if they are already working with an agent or have received a quote.” If it is determined that a customer is working with an agent, Sunwing will work with that agent to secure the group.
“There are times when a customer comes to us and has advised us that they do not want to work with an agent and they assume responsibility for collecting payments, relaying information to the group etc...,” she continues. But, “most people prefer the experience of a good travel agent.”
As for the Facebook posts, Murphy says, “We would encourage agents to speak to their Sunwing business development manager before taking to negative forums.”
“I did have a complaint this week where the agent was given a group quote from us and the passenger advised they got a much better rate from us,” she says, pointing out that there are many sides to a story. “[There was] a timely investigation and many people involved to find out that the passenger did indeed get a lower rate – however, the quote was from over three months ago! This is all too often the case.”
And Bahia? When a representative was asked about the aforementioned complaint, he told CT: “The comments are not particularly relevant to Canada, as for a client, it is much cheaper to book via a travel agent or agent website to buy a package.”
“It would be unlikely a client would book direct with Bahia Principe since prices are quoted in U.S. dollars,” he continued. “However, like most hotel chains, there is an ability to book direct which might suit other markets or corporate groups etc.”
So, what’s the industry to do? It seems the onus is on suppliers to “walk the walk” if they’re “talking the talk” when it comes to their commitment to travel agent partners, but also on agents to re-evaluate their business model if they find themselves frequently plagued by the issue of undercutting. In the end, Pearlman believes all sides can win.
“I believe that it is the travel professional who ensures the right customer purchases the right vacation for the right value,” he says. “This is a win-win-win – the value that the supplier builds in their product is recognized and not sold to the lowest bidder; the customer, because they are placed with a product that suits their needs (not necessarily the cheapest) and are provided a level of service that the supplier may not be able to deliver; and to the travel professional, for providing the expertise that drives value and loyalty, which ultimately drives compensation. To date, the computer on the desk or the phone in your hand can’t do that as effectively.”