The airlines’ brave new world: Not a consumer utopia
Recently some airline CEOs have been asked about their vision of the future. Coincidentally, both Delta Air Lines CEO Richard Anderson and American Airlines CEO Richard Arpey share the same vision, or in Arpey’s case, “dream.” Regardless of the terminology, both men indicated they foresee a future in which travel intermediaries pay for the privilege of selling their product. A reverse commission, if you will.
Much like Aldous Huxley’s Brave New World, both men envision a utopia that punishes individuals for breaking from their planned universe. They see a world in which everyone will happily accept that what they say is right and good. A world in which travel agents and online travel agencies will pay for the privilege of selling what has become a transportation commodity, and not a pleasurable one at that. They see a place where they, not the customer, are the center of the universe.
Under their vision, gone will be any semblance of customer service or follow through. Why should it exist when consumers will simply select the cheapest flights, go straight to that airline’s Web site and book it. Will consumers choose to use a travel agent? That depends on the level of service you provide and whether the value they place on your services offsets the additional costs.
Imagine if this were to happen in another industry—say the grocery business. Consumers would just go to TIDE.com, or Cheerios.com, place their orders and on top of that pay a hefty delivery charge, all because your local grocery store refused to pay distribution fees or worse, because the grocery store could no longer afford to do business. Think about it–a world with no middlemen, and all customer interaction is via the Internet.
Well, my customers don’t envision that world, and if I have anything to do with it, they never will.
They don’t call me looking for an airplane seat. They call me to help them plan their vacation. They call me because they have a last-minute business meeting in London. They call because they want me to plan their family reunion next summer or because they have a funeral to attend. They call me for my assistance, for my expertise and for the value I provide them, and they are willing to pay for my services. They know they can go online and find out the price of everything. I sell them on the value of everything.
Big travel companies, especially those that are publicly traded, are always asked by Wall Street analysts, what they are doing to control costs. Fuel, they can’t control, labor is always a struggle to get right, but distribution? Surely they can control that. Well, distribution for an airline, for example, includes much more than simply offering a seat and taking payment. Credit card merchant fees are included, as are GDS segment fees and commissions paid to international agents and large online travel agencies. With all these expenses there are few costs associated with travel agents. They took care of that a long time ago. But as the airlines start to look around, they see that travel agents are still in business and still making money. Money that isn’t going into their coffers.
Why? Because we are where America shops for travel. Travel agents can manage a customer’s needs for air, hotel, car, insurance, theater and more. Consumers want choice. Consumers want service. Consumers want advocates who will fight for their rights. They want a distribution system that gives them full access to the entire travel industry, both leisure and commercial.
Ultimately, the brave new world that the airlines envision is whatever the consumer wants. Or did they forget? The customer is always right.
If you woudl like to discuss this, please join and participate in ASTA’s LinkedIn Group.
Chris Russo, owner of Travel Partners, in Broomfield, Colo., is serving a one-year term as the president and Chairman of the Board of the American Society of Travel Agents (ASTA) starting Sept. 7, 2008. Russo has been involved in the retail travel business for 20 years. He was a retail travel agent for 12 years and has been a travel agency owner for the last eight years. Russo was voted one of the top 40 travel professionals under 40 in 2003 by Travel Weekly magazine and voted one of Travel Agent magazine’s rising stars in 2003.