Travel agencies need to get younger, and more creative, if they're going to survive. For what it's worth, some agencies are doing what it takes protect themselves from the travel companies that want agents sliced out of the industry.
At first glance, it seems like travel agents faced another tough year in 2015.
Travel brands like Lufthansa Group continued the push to get consumers to book directly, therefore eliminating the need to pay travel agent commission.
States around the U.S. also tried to pass additional taxes that would pare away the bottom line of travel agencies.
American Society of Travel Agents (ASTA) CEO and president Zane Kerby, however, says that U.S. consumers have begun to embrace travel agents once again, even if the message hasn’t made it out into the media.
Kerby, who is about to enter his third year at the helm of ASTA, recently oversaw the introduction of a reduced-cost membership for independent agents. He spoke to Skift about the rise of independent agents, how industry trends are helping travel agents and the ways in which smart travel agencies are preparing for the future.
Skift: Anyone following trends in the travel agency community knows that independent agents, and home-based agents, have become a strong force in the industry. Is ASTA’s new reduced-cost membership for independent agents due to a recognition of this?
Zane Kerby: I’ve been out and talking with many of our membership groups, our local chapters, our local magnet chapter members, and if you’re brand new in the industry or you’re a second career person just looking to get in, the price point was sometimes a struggle.
This is a way for us to provide some services to that small member who needs what ASTA provides, mainly some consumer awareness to our travel agent portal and maybe getting plugged into what’s happening on the advocacy front in their state.
Skift: At the same time, these independent agents face an uphill battle because their business isn’t visible.
Kerby: There’s a mass majority who get all their new customers through word of mouth referrals. They don’t need to be as visible.
We have to do more as an industry to tell the expertise that travel agents provide. To be honest with with you, there is such a glut of information out there and so many ways to get roped in on the internet, that I mean, I don’t think there’s been a better time to be a professional travel agent.
Skift: Looking back on 2015, travel agencies reported strong results. But at the same time, online travel agencies and hotel chains still took shots at the agency community. How do you assess how things went last year for agents and ASTA alike?
Kerby: I think it was a very successful year for agents. The mood is good. People are doing more business than ever. They’re being relied upon by the traveling public for their expertise more than ever.
I don’t meet a lot of down and out travel agents, which I think is a very good thing. The same time, on the regulatory legislative fronts, we’re still targeted because I think travel is such a obvious revenue source and travelers are easy targets for legislators; 14 times last year, in 14 different states, travel agents and agency services were targeted trying to increase taxes.
All 14 states proposed increased taxes on travelling services. Because of our membership reaches into these individual states and communities, we were able to beat back all 14 of those tax proposal increases.
That part’s really good. We’re still also waiting for the new proposed rule-making for Department of Transportation that will either give consumers and agents a fair access to ancillary fees, or to at least a small bucket of ancillary fees like your seat and whether or not you pay a bag fee, and how much that bag fee is in all distribution channels. Either we’ll have it or we won’t, but ASTA has been fighting for that for a very long time.
Skift: Agents faced a lot of negative publicity last year, as usual, in both the press and advertising. What’s your take on that continued tension?
Kerby: Yeah, combating that is one of the more challenging things that we do. Each business is going to make its own decisions and we’re very appreciative that Marriott pulled their ad down.
It’s easy journalism to say the Internet fixes all problems. Even though the online information doesn’t fix all problems. Most people don’t have unlimited discretionary income and don’t to have a do-over when they mess up their once-a-year family vacation.
Again, helping people understand the value of using a professional travel agent is a job that we relish. We love extra mile of work every year. We have a great story to tell, now we don’t have a Budweiser budget to tell it, but I’ll tell you, I wish I did because we could really do wonderful things.
Skift: Intermediaries also faced pressure last year from travel providers. I’m thinking of Lufthansa’s distribution surcharge, for instance. How do you assess that showdown?
Kerby: Any move to disadvantage the agency channel we think is short-sighted. Obviously businesses are going to make business decisions, but when you take a holistic approach and see what kind of value the agent community brings to any particular travel company, we think that cutting off your nose to spite your face is never a good strategy. Agents bring in the most loyal customers. And a cost-shift like that is just bad business.
Skift: One of the biggest overall problems facing travel agents is the simple aging out of the workforce. What are agencies doing to bring young people into the profession?
Kerry: An agency owner in the Signature network told me a story. He said that they were changing over their 401k plan and looking at their data: 85 percent of the people who worked in his office had a target retirement date of 2015. He realized he had a real problem with his current workforce.
So he went to the local university and he interviewed 30 kids. He hired six of them who wanted to come into travel. He courted them and trained them for a month. It was almost like a boot camp. He trained them for a month and the teachers couldn’t keep up with them by the end. They were that good.
I think like forward thinking agencies like that, agency owners like that, they’re the ones that are going to win the future. Certain other agency owners that have talked to me and told me about this problem, I’ve given them the same response, which is if you give me a great story to tell as to why young people should join this industry, then I’ll tell it. There are great things about joining the industry, and we need more good agents.
Skift: Looking ahead, what are the major takeaways for travel agents headed into 2016?
Kerby: They have to know their customers inside and out. I think the commission cuts 20 years ago crystallized the message of who agents really work for. They really have to understand they work for the traveling public. If they do that, then I think their future is really, really bright.
There continues to be downward pressure from all the major travel categories and segments to sweep costs or bring costs out of the distribution channel. There are companies out there that that just are looking to increase their commissions to the agents by 50 percent. We would love that if they did. If they did, they’d be on the front page of our homepage. That’s just not the case anymore. Agents have to understand who they work for. They work for the traveling public and the should fall in love with charging service fees.
I think agents are wise to look at the wide-breadth of opportunities in front of them. Who knows what the future will bring in that regard, but if I were Airbnb I would definitely want to plug into the agency community.
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Photo credit: ASTA president and CEO Zane Kerby. ASTA