Are agents still relevant in the distribution channel? | TravelResearchOnline


Are agents still relevant in the distribution channel?

Are travel agents still relevant?  Really? Truly?

Over the years I have had the chance to talk to hundreds of Business Development Managers, District Sales Managers, Executives, Owners, Partners, Founders, Directors and every other title you might come up with for a supplier representative. One constant among 90% of them is that they truly believe in the agency distribution system–as do I. But, they are also very concerned about that same system’s failure. Think about it.  If they were that confident in the ability of agents to fill berths and beds, why are so many of them aligning with non-travel partners and selling direct to consumers?

Nothing is guaranteed in life. Especially a commission.  Have you noticed that suppliers are not calling as often? Not stopping by like they used to? Do you recall the last time a supplier bought lunch for you or your office? Do you wonder why? It could be that you are failing your suppliers. Maybe they are not seeing the value in your book of business. If you feel somewhat abandoned by suppliers, take it as a red flag and be proactive and do something about it.

Prior to the recession, I had a conversation with a supplier who was scared of going out of business. The concerns were consumer confidence, the economy, and agency support.  Ultimately, this supplier did indeed close.  Certainly agencies are not able to sway consumer confidence or the economy, but we do have the ability to offer our support when it makes business sense.   Of course, all suppliers are not created equal, and some (in all honesty) deserve to go out of business. But for the ones that make sense for our own businesses, we need to be supportive.  I fear that when the time comes, the agency community will not step up to the plate again.  Again? Glad you asked!

History has a way of repeating itself. Way back in the days of airline commissions, all airlines followed Delta’s lead and eliminated them. Except one. Frontier Airlines believed in the agency distribution system and they vowed to maintain a commission (albeit a capped commission) for travel agencies. Their reasoning was that with agency support, they could grab market share from Southwest and  America West. They had a nicer livery, better on-time performance, friendlier employees and some really cool paint schemes on the planes. It really seemed like a doable plan that would enable a modest size regional carrier to survive in a limited market against the Goliaths. The travel agencies all got the memo. Unanimously they praised Frontier for their stance. They all vowed to support Frontier because they knew the relevance of agents. So, what happened?

They sold away from them and actually eroded their market share. And Frontier quietly eliminated all commissions several months later.

Don’t let this story re-surface. In today’s travel market, it is so important to not only use preferred suppliers but to create allegiances and partnerships with them. Your travel suppliers need to know that in tough times, you will be there for them. And they need to let you know that they will be there for you.  When there is an issue–find a solution to work together, or agree to part ways.

I am a staunch supporter of working with a limited number of preferred suppliers.  As we head into the final quarter of the year and are putting together our 2014 marketing plans, maybe it is time to take a look at the suppliers we support and figure out which ones we really support and which one we simply sell. Maybe it’s time to whittle down your preferred supplier list and send those suppliers a very clear message…

I’m relevant…and I will show you!

I am curious…how is your relationship with your suppliers? Please leave a comment!

  2 thoughts on “Are agents still relevant in the distribution channel?

  1. Ann says:

    So, the other side of the coin is that by selling only certain suppliers we are accused of being biased, “doing it for the money,” and not having the client’s best interests at heart. Between and rock and a hard place. The answer to this is a fully net environment. Are we ready for that? Suppliers are slowly eroding commissions (think NCFs) – it’s like dying the “Death of 1000 Knives”. After airlines eliminated commissions, everyone was “I’m not selling air tickets anymore” and moved to cruises/all-inclusives. Where can they go now? Is this where we finally get down to the truly dedicated agents and finally get recognized as professionals? Is net the answer? What do the suppliers say?

  2. Karen Dawson says:

    As a BDM for a major travel franchise, I often had discussions with owners regarding the suppliers they supported. Their agents could proudly tell me their “A” list of suppliers for their top destinations, but when each agent was asked who the “B” supplier to that destination, (in case “A” was sold out) each agent had a different answer. As a result, the agency did a lousy job of supporting any of them well. Looks like we all should make that A & B list for those top destinations we sell, even Home based agents.

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