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2015 and the comeback of traditional agencies? Yes, but not all of them!

God helps those who help themselves

Two new phenomenons advocate for a return of traditional agencies in travel intermediation: the negative growth online trip sales by pure players and the cost of Internet advertising (Google in particular), is bringing back brick and mortar agencies both to the general audience and producers. Yet should we assume that nothing has changed and that everything could pick up like before?

Rédigé par Jean Da Luz translated by Joséphine Foucher le Vendredi 16 Janvier 2015

Only the agencies that have included the (major) features of the web-to-store and took the necessary measures logistically, with human resources, and technologically, will be equipped to take on that challenge. - © Jérôme Rommé -
Only the agencies that have included the (major) features of the web-to-store and took the necessary measures logistically, with human resources, and technologically, will be equipped to take on that challenge. - © Jérôme Rommé -
2014 marked a turning-point in the young history of online travel distribution.

In fact, after more than a decade of 2 figure growth, this sector has slowed down leading to a significative downfall last year.

While the economic crisis may be responsible of this, it doesn’t explain everything.
E-commerce is witnessing a logical mutation in all sectors.

Showing that, however powerful and resilient it may be, Internet will never win 100% of online distribution.

Let’s also add the surprising resistance and adaptation capacity of French travel agencies compared to other countries, such as the the United States for example, where 30% of physical agencies have disappeared in the last ten years.

The maturity of consumers, the disenchantment with the “Do it yourself” attitude, and the economic mutation all explain this new era of online tourism.

The travel agency is not more expensive than Internet

A renewed interest in agencies is the result of better knowledge of the online marketing processes.

Consumers have explored the question and uncovered the little tips and tricks (sometimes a bit crude) of online sales such as lack of stock, unfairly promoting products, and other questionable procedures.

They also understand that the deadweight effect was only relative because it was strained by hidden costs, a great speciality of online air travel sales.

Last but not least: after counting their bill, Internet users have often noticed that the travel agency on the street corner was not much more expensive.

The advices it gave them seemed relevant, and especially, made them save hours of online surfing.

Purchasing behaviors are also seeing lots of changes.

Before, online agencies were seen as the only option. The consumer would pride herself in creating her trip alone (dynamic packaging) and brag about it to her “tribe.”

The democratization, or even vulgarization of the Web, has outdated this “Do it yourself” attitude. Even the American clientele now understands the worthiness of returning to travel agencies and the benefits resulting from that.

Free online distribution, a Utopia

Of course, this doesn’t apply to the totality of trips bought online, but only to more sophisticated packages.

The business traveler who mostly buys tickets has never stopped going to travel agencies…

A phenomenon that is doubled by the return of the physical store: the famous web-to-store and its double, the store-to-web.

What is that? Simply the possibility for the consumer to buy his trip at a traditional sale outlet and to finalize or pursue his purchase online or inversely.

For B2B also, the trend seems to be favorable to traditional distributors. First of all, because professionals who thoughts to be done with agencies have actually become cynical.

The Google ogre that slowly sanctions them a bit more everyday has forever shattered the utopia of free online distribution.

Secondly, major Online Travel Agencies (OTA) that are confronted to the problems of increasing margins, are producing more and more and thus flirting with physical travel agencies.

The major challenges of web-to-store for agencies

In other words, the cards have been drawn and everything proves that traditional players are regaining their role and predominance of the past.

But it would be ignoring that history never repeats itself, even though it sometimes has the hiccups…

To take advantage of this new situation, we will need to be proactive. In fact, only agencies that have understood the (major) challenges of the web-to-store and that have done everything necessary in terms of logistics, human resources, and technology, will be able to take on the challenge.

Yet today, we can’t help but notice the large void when confronted to the digital native clientele, that has never set foot in a travel agency and doesn’t know what’s there or what’s sold!

We’re very surprised to note that a large majority of these stores does not have social network presence and that their websites, meant to link to their retail outlet, harms their image and commercial interests.

There is today a unique (historical?) chance for distribution to catch up and get back in the game by taking on the leading spot that it should have never let go of. Easier said than done…

One thing is certain: the innovation train does not not run twice and if distributors don’t take this opportunity, new entrants will steal their spot.

Let’s not forget the old adage: Errare humanum est... Perseverare diabolicum!

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