between suppliers and agents. Suppliers need agents as
the aggressive sales and marketing force, but it will not
work if the net income is less than $50 for a package. In
some way or form, the suppliers will need to ensure that
their sales force can survive.
The suppliers that proactively address this with
strong partnerships and programs will reap the rewards
of loyalty when things get better — and they will, but
probably not until 2010.
K evin Maguire,
p resident and CEO
In the corporate world, coll ective buying or consortia-t ype programs will become
m uch more numerous in
Global economic deterioration will increase the downward pressure in supplier rates for airlines, hotels, car rental and land
There will be a permanent cultural change in the way
companies of all sizes handle business travel; i.e., more
mandated travel policies, stricter adherence to pre-ferred-supplier agreements, reduced number of travelers, more technology alternatives to travel.
Strategic meetings management will become the
benchmark for how companies plan, justify and quantify meetings.
Consolidation of suppliers will continue.
Airlines’ service levels will continue to deteriorate,
and passenger service/satisfaction will drop to still more
Airline ticket pricing will become even more confusing with the introduction of more nickel-and-dime
add-ons to the base rate as more airlines unbundle
fares. Most airlines will cite potential oil price increases
as justification for not dropping fuel surcharge fees, although crude prices are falling dramatically.
The economy and the travel industry will begin to
turn around toward the end of the second economic
W alter Gay, president
T ravel Automation
As GDS vendors and air-l ines jockey for position to
l ower their distribution costs
while all parties try to increase
m arket share, travel agents
will again be caught in the
middle of this impossible trinity.
In 2009, airlines and GDS vendors will begin negotiating their content agreements to extend them past the
current 2011 expiration dates.
Agencies shouldn’t expect any relief from the reduced segment incentives for “full content” that began in 2006.
GDS vendors will propose new and more efficient
products and services in order to help increase
While these tools may be a technology upgrade,
agencies will not see a sufficient increase in business
to offset the costs of these new “efficiencies.”
Large agencies will continue to get larger through
acquisition; travel suppliers will not reward them for
increasing their size but will only reward them for increasing the supplier’s market share.
More small-to-midsize agencies will go out of business due to a lack of planning, strategy and cash flow,
while travel suppliers continue to overlook this segment of the business.
On the other hand, I expect agencies to form more
business alliances so they can aggregate volume for
negotiating GDS contracts or so they can aggregate
travel sales for better commissions by, for example,
funneling all sales for certain suppliers through agency No. 1, sales for a second set of suppliers through
agency No. 2 and sales for another set of suppliers
through agency No. 3.
I would expect these partnerships to involve members of varying consortia so the partners could take
fuller advantage of each of the various consortia
C hris Russo, owner
a nd ASTA president
a nd CEO
People are as worried and
nervous for 2009 as they were
in 2002. The challenges for
2009 will continue to focus
o n the struggling economy.
As an agency owner, my challenge will be to find
more creative and cost-effective ways to promote our
services and to keep my wonderful staff intact while
revenues are down.
As president of ASTA, I believe this will bring other
unique challenges to the industry. With a struggling
economy, more state governments will be looking
for additional revenues, which could mean more attempts to collect taxes from our industry, as we have
seen in the past.
These times make it even more critical to be an
ASTA member, as ASTA will be the watchdog for
such tax issues and has great consumer outreach
with the consumer website Travelsense.org included
It could be a very opportune time for anyone looking to expand because there will be more consolidation of agencies.
B arry Richcreek,
c hairman ARTA
The new year will bring
c hanges to the way consume rs purchase travel. While a
s truggling economy will affect
t he industry overall, the cons umers’ desire to get away will
s till be important. However,
these consumers will choose wisely during the buying
process. Impulse buying via the Internet will slow, and
low supplier prices may not be enough to entice the
consumer as they once did.
The consumers’ need to be precise in making the
right decision will be paramount in 2009, as it may be
their only vacation of the year.
The big winner in 2009 should be the travel consultant who recognizes these consumer changes early. Both
the suppliers and consumers will need these travel professionals more than in recent years.
R obert Joselyn,
p resident and CEO
J oselyn Tepper &
Associates and Travel
In an economic downturn,
the very wealthy usually will
not change their travel life-style. This should not be confused with the luxury
market or what is sometimes referred to as the “
aspira-tional” market. Luxury travelers are likely to take fewer
vacations or shorten their vacations but are not likely to
downgrade the quality of the leisure experience. There
will be some shift from expensive international destinations to less expensive international destinations and/or
Midmarket travelers are likely to take fewer vacations,
shorten the length of vacations and downgrade travel.
The “thrifty” market may stop the kind of travel sold
by travel agencies altogether.
The opportunity to promote supplier initiatives
should be greater because suppliers have their challenges, too. Co-op funding should be available … and at a
far better sharing rate than 50/50, and in some cases, at
no cost to those agents with well-thought-out plans for
When business slows down, the potential return is
less with media promotions; it is time to pick up the
phones and contact existing clients.
As for corporate travel, some businesses are unaffected by general economic woes, and others may actually
do better. Commercial clients may ask agents to propose
cuts, including in their fees, or they may put accounts
out to bid to see what “deals” may be available to them.
Clients also may cut costs by reducing the amount or
type of travel or may seek better deals with suppliers.