Face-to-face deals plus online interface still the future for agencies

PUBLISHED : Monday, 17 April, 2006, 12:00am
UPDATED : Monday, 17 April, 2006, 12:00am

It's so easy to call the travel agent, they explain all the options when making a travel booking and there you are. How can you replicate that component online?

This is not a bricks-and-mortar travel agent speaking, but George Harb, marketing director Asia for online Cendant Travel Distribution Services. He believes innovative travel agents have a bright future because Asia is a very different market from the rest of the world.

The retail travel agency business here is actually growing, he says. 'The online space is also growing, but one of the key things brought out in our white paper on changing travel trends was that consumers still like face-to-face contact and verbal confirmation of their booking.' One of the problems with online in Asia is the cash economy and no indication that the desire for a face-to-face relationship is diminishing.

So does he believe traditional travel agents have a future?

'I wholeheartedly believe they do. Online was supposed to kill two industries, retail and travel and it hasn't.'

Mr Harb was concerned that last week's Travel Trade gave the impression that the company only handled online business direct to the consumer, when a large part of their activities concern B to B.

It is not a question of the internet squeezing out travel agents, he insists. 'There is a market for everybody and as it matures, we will facilitate agents' ability to go online to better manage their travel.' Cendant gives them 'massive amounts' of consolidated content in the form of travel distribution systems such as Galileo.

'A Hong Kong travel agent cannot have and manage 20,000 hotel contracts themselves, but we supply the technology to make it available to them.' As Malaysia Airlines joins Singapore Airlines in seeking to reduce agent commissions, they must ramp their other revenues by providing comprehensive packages. Surely they are doing this already? 'In my experience, not enough,' he says.

Cendant will split into four independent companies from the second quarter, one each for its real estate, travel distribution, hospitality and vehicle rental businesses. The new hospitality arm will be named Wyndham, the real estate business Realology, with the other two still to be named.

'It changes nothing operationally, but strategically, the company will be more in control of its own destiny,' says Mr Harb.

Airfares stable

Although Asia-Pacific airfares across all classes remained stable in the three months to January, they have risen steadily over the last three years.

The latest quarterly American Express Airfare Index, which surveys 924 published airfares, recorded changes in Australia where first and business class fares increased 0.9 per cent and 0.5 per cent, respectively, while discount economy and lowest excursion fares from Australia fell 1.7 per cent and 0.6 per cent. Only minor changes were recorded in other regional fares over the quarter.

First class fares from Hong Kong increased 2.7 per cent year on year, business class was up 1.8 per cent, full economy increased 0.4 per cent and discount economy fares 0.1 per cent.

From Singapore negligible changes were recorded during the quarter, with year on year increases of 3.7 per cent, 4.1 per cent, 2.8 per cent and 2.7 per cent for first, business, full and discount economy.

But regional fares have increased steadily over the past three years in first and business class, up 8.3 per cent and 9.5 per cent, respectively, for the period to the first quarter of this year. The full and discount economy airfare indices increased 6.2 per cent and 6.4 per cent, respectively, over the same period.

Airfare increases in the leisure travel economy categories increased more slowly, with the lowest peak season excursion and lowest off-season excursion indices increasing just 1.4 per cent and 1.7 per cent, respectively, over the three years.

'The growing influence of low-cost carriers is clearly visible in this quarter's survey,' said Robert Tedesco, head of consulting services Japan Asia Pacific Australia at American Express.

'As demographics change and the rate of liberalisation within the region gathers pace, this momentum will continue, with low-cost carriers and their hybrid cousins yielding improved market shares across a number of routings.'