Issues & Trends – September 2012

Like OTAs, TTAs are growing and using latest technology

ONLINE Travel Agents (OTAs) are not the only travel retailers growing their businesses and making effective use of technology.

Traditional travel agency (TTA), Orient Express Travel Group, has experienced “double digit” growth every year for the past decade, Tom Manwaring told the TravelTech con-ference in Sydney earlier this month.

Declaring himself “extremely optimistic” about the future for bricks and mortar agencies, he pointed to the increased supply of airline seats, which has seen first and business class airfares drop to about half the level of three years ago and provided agents with the leverage to improve their margins.

“Our guys are making more money than for some time,” he said.

Home-based agents comprise ano-ther thriving TTA sector, according to TravelManagers executive general manager Mandy Scotney.

She pointed to exponential growth for her company which has increased membership from 50 to 360 members in five years.

And she pointed out that this relatively new TTA business model “couldn’t exist without technology … but we overlay that with personal relationships”.

She said TravelManagers’ consult-ants had an average 16.5 years travel industry experience so they can add value for clients booking travel with them.

Her comments echoed the words of Travelport’s new general manager for the Pacific region Alex Fitzpatrick in an interview with travelBulletin (page 28).

Recently arrived from the UK, Fitzpatrick is lavish in her praise of tech-savvy Australian agents, express-ing confidence that they have a bright future because they have established strong relationships with their client base and are embracing technology that enables them to deliver rich content to clients efficiently and cost-effectively.

Expedia Australia managing direc-tor Georg Ruebensal maintained OTA sales growth is outstripping TTA growth and was backed up by figures released at TravelTech by Sydney-based consultancy Quantium.

Based on National Australia Bank electronic transaction data they show OTA sales grew by 55 per cent between June 2010 and June 2012 while TTA sales revenue was virtually static. (See story page 26)

Nevertheless Ruebensal himself provided some evidence that the packaging of high-yielding complex itineraries remain the preserve of TTAs. OTAs may be able to cross-sell from point-to-point airfares to accommo-dation but Ruebensal revealed that his company’s attempt at more sophisticated bundling was a failure.

“We did try and sell packages in the mid-2000s,” he told his TravelTech audience, explaining that the company handed out $150 coupons in Sydney and Melbourne.

It sold a grand total of 20 packages to people redeeming the coupons.

Ruebensal also implicity acknow-ledged that TTAs continue to play a key but hidden role in hotel room distribution with a reference to the success of Expedia’s travel agent affiliate program (TAAP).

The program enables Expedia to boost its online sales volumes by adding bookings from bricks and mortar agents.