Letter: Travel agency owner disputes travel market analysis

As a travel agency owner, I felt it necessary to respond to a recent article.


First, your article is titled incorrectly as the primary reference is to air travel and there is a huge market for tours or cruises which require even more assistance than ever before because of expanded choices.


Second, your article referenced priceline.com. Here is a Web site that succeeded early on solely because of their advertising revenue. Check their early results and see that cost of sales exceeded sales. Check their third quarter results that showed a decrease from the previous quarter in both sales and advertising revenue. Check their bottom line for the third quarter where losses grew significantly. Have they ever made a profit? I know they didn`t from air sales. Check their stock price which is now about $1 per share down from $104 per share. How will they survive without additional capital and other sources of revenue?
Third, your article mentions great prices. Many of the travel bargains to be found on the internet are on airline-owned sites. The airlines are offering discounts to travelers to purchase on the web in an attempt to push purchases on the web. But those discounts with the added mileage bonus are greater than the commissions to travel agents. How long can airlines offer net prices online that are lower than their net revenue from travel agents? What happens when travel agents no longer exist and the consumer choices no longer exist?
Fourth, you mentioned that price motivates people. While price is a prime motivator, service is also a great factor. How many online travelers did Delta cancel holiday plans for? How many of those travelers received any help from Delta or the online service they booked on? In the meantime, travelers who were booked by travel agencies worked feverishly to rebook or to accommodate their passengers. Maybe it wasn`t successful all the time but we worked our butts off to assist them.
Fifth, you failed to take into consideration the cost factor on business travel. Have a corporate executive making $100,000 a year make his/her own reservation and you have wasted a minimum of $65 in labor cost and more likely $200 in lost opportunity costs. Compare this to a travel agent that charges $10 to $25 for an airline ticket and takes up significantly less time than booking it on the internet.
Sixth, you failed to take into consideration the ingenuity of travel agencies. Effective, January 1, 2001 we will be offering our clients a new service. We will book their flights as normal. We will then check their flights through Qixo or others for their date of travel. If we find a last minute bargain, we will advise them of the option and book it for them on whatever site it is available. For this we will charge a higher fee than we charge for central reservation bookings. Remember the airlines have profited mightily from the prices they have charged their corporate customers. What is the impact on an airline if 25% of their corporate customers fly on last-minute fares even if the passenger throws away half the ticket?
Seventh, the travel agents that have survived the commission cuts are stronger than ever. We will survive this also with service, knowledge, ingenuity and perseverance.
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