This is a premise shared by many agents these days, especially with cruise lines.
The “commodity” idea is a red herring. There has never been a time when someone wanted to pay more for their travel and the hotel room, stateroom, etc has always been just that, a hotel room, stateroom, etc. Price has always been an issue; it was not as transparent as it is now.
Suppliers pay higher commission percentages to travel agencies so agencies would be the suppliers MARKETING and sales avenue. Suppliers knew they could not reach every neighborhood in a city as large as Los Angeles or in a rural area such as Wood River, Nebraska. Brick and mortar agencies had great displays, brochure racks, and posters on the walls or in the windows. Agents went out into their community and marketed suppliers product. Many agencies sent out supplier direct mail pieces to their client list or took out co-op ads in the local travel section of their Sunday paper. Suppliers needed us to market product.
When the Internet first started, suppliers started to jump on, as did agencies, but it still did not have the reach it needed. At the same time there was a growth in cable channels such as the Travel Channel, TLC, Discovery, Nat Geo, History, etc. along with a growth in reality shows that showed off exotic locations. This helped market supplier’s products either directly through paid advertising, by doing a show on a specific destination such as Disney World or indirectly by showing and highlighting these destinations.
In the last few years, we have seen the phenomenal growth of social media, coupled with the ease of access to this social media. At first it was forums such as this one (TRO) setup for whatever interest you had. Now with one tap on your Smartphone, someone can send a message out to thousands or possibly even millions instantly. You can research and book travel right from your phone. Clients can instantly share information about their travels while traveling.
Suppliers have become aggressive in their marketing on these media platforms and they are getting the benefit of thousands of other websites promoting them at the same time. I typed in major cruise line in Google and I got 3,960,000 results. Only one of these is the official website of this cruise line, but the cruise line is getting the benefit of all the other pages loaded by travel agencies, past guests, fans, critics, blogs, etc. They pay for nothing for this marketing.
The suppliers are aware of the discounting agents are doing (yes, mostly online agencies, but other agents are doing the same in an effort to close the sale and not lose a client.) The supplier does not need us as their marketing avenue any longer and since agencies are closing sales by discounting (rebating their commission), suppliers do not see the need to pay these higher commissions. Once your client goes on their trip, the supplier has all the information they need to market direct to that client.
Success for travel agents will be by adding service and value to the potential client. The travel agent industry will need to shift from being a retail industry where compensation is based on what you sell, to a service industry, where the client pays you for the service and value you add.
