The RETAILER View
How do travel retailers view
the year ahead? What are
they anticipating in the way
of economic challenges as the
world’s business and government leaders struggle to right
the listing world economy? Travel Weekly
Editor at Large Nadine Godwin, who has
been reporting on travel agents and agencies for more than 35 years, posed those
questions to a cross-section of the trade
and found some surprises in the answers.
M ichael Batt, chairman
T ravel Acquisitions
We need to be prepared for
a very tough time ahead. I
don’t believe there is a quick
fix to the country’s debt problems, and as all businesses will
scale back, agency business
plans for 2009 should reflect at least a 15% to 20% reduction in revenue. This may be overly pessimistic, but
it’s better to plan for the worst and hope to be pleasantly
surprised than the reverse.
We will also see suppliers increasing commissions for
an increased share of business.
The volatile economy will clearly accelerate industry
consolidation. Expect at least one more airline mega-merger. Weaker travel agencies, tour operators and
other suppliers will close or be bought by larger, stronger ones, and some asset-based businesses still will face
bankruptcy as yields and occupancies decline.
Cruise lines will have to consider how significantly
reduced pricing will affect the distribution channel.
As they cut retail prices and rely more on noncommissionables, they are damaging their commissioned sales
force, and eventually fewer people will sell and market
The recession will put weaker agencies out of business, and their business will provide a great opportunity for more aggressive agencies. It’s time to set ambi-
tious goals. The great majority of us will come through
this stronger than before — witness 9/11 — and well-thought-through strategies and hard work will eventually pay off.
G ary Fee, president
O utside Sales Support
At OSSN, we see more
a gents moving from storefronts to home. This migration of veterans will continue
to grow as more full-service
s torefronts close their doors
during the economic downturn. Many will find the
change more profitable as they shuck the extra overhead and the cost of the commuter ride to and from
work. More will turn to specific niches and find working from home a pleasure.
As unemployment rises and more businesses close
their doors, job seekers will look to travel as a viable
full-time or part-time option.
Travel suppliers will continue to support and embrace the home-based agent channel as it moves toward
a more dominant form of leisure-travel distribution.
There will be more opportunity for host agencies to
grow their work force and cultivate new travel sellers.
B ert Rivero,
r egional director
for the Americas
At IATA, we are already seeing a dynamic shift in the way
a gents do business in the U.S.
a nd overseas.
In the U.S., we are seeing
agents using the Web more than ever; indeed, the Web
is changing the way agents do business so fast that market providers cannot keep up. For example, at Iatan we
have seen a 68% increase in usage of our online services
from U.S. retail agents in the last six months alone.
Overseas, the economic situation is more in the
agents’ faces because it has suddenly become harder
to obtain the bond or other financial guarantee from
banks. … IATA requires newcomers to have a bank
guarantee, and the crisis is making it much tougher on
new entrants. The door is closing on them.
Established agencies that experience any irregularity
in settlement with IATA also must have a bond or other
guarantee, and for them access will be more limited, as
Overseas, developments have tended to run three to
four years behind the U.S., but the current crisis will accelerate the shift of agency operations from storefronts
to the home- and Web-based models. This shift will occur faster than it did in the U.S. due to consumer demand and the crisis.
Finally, these events are driving superheated consolidation to the point that in some countries only a
few travel agencies are issuing air tickets for all other
We have already seen a huge decline in numbers of
IATA-approved ticketing agencies overseas and will see
more. They’re not going out of business but changing
their business model to adapt to the environment.
S hannon Stowell,
Adventure Travel Trade
In 2008, we held two international conferences, in Norway and Brazil, both of which
occurred during the heaviest
days of the U.S. economic
meltdown. So, we were able to watch companies from
around the globe react firsthand.
Sustainability will continue to be a major focal
point in 2009. It is clearly not a passing fad, and companies with any sense of self preservation and vision
will look for ways to lessen their and their customers’
impact on the environment and the diminishment of
However, with the economic tightening, financial
issues will trump all other concerns for a significant
number of companies, so a better return on marketing
and sales efforts will be key. The basics for surviving any
downturn will be important — cost cutting, etc. — and
it will be a time when staff who are not as productive
for a company’s survival will be at high risk.
For North Americans, day trips and long weekends