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Remember the time…?

Lars Thykier is managing director of the Association of Danish Travel Agents and Tour Operators

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Not too long ago, distribution of travel was simple, with transportation companies, hoteliers, and other service providers relying almost solely on the sale of their products via GSA’s and travel agents. Only in their home markets, the travel product suppliers were able to have a noticeable footprint through their own-sales, otherwise third-party sales were the rule of the day. This has changed dramatically.

After the arrival of the then revolutionizing computer reservation systems, the “CRS’s”, initially developed by airlines to enable faster and smoother bookings, things began to change. Agents could have the CRS installed allowing (almost) the same information on pricing and seat availability on airline flights all over the world as the airlines themselves. The airlines owned the CRS so it took a while before other service providers were included in the CRS, but they got in there. Remember that time…? Back then we thought this impressive set-up would survive “forever”.  Later we realized that “forever” in the travel industry translates into “less than 10 years”.

The internet made travel more transparent

With the deregulation and the increased competition between airlines, things began to change. And then the internet made travel more transparent. After a while, the airlines that owned their own CRS decided to sell them off in order both to improve their balance sheets and in order to off-load what they saw as “unnecessary” administrative and maintenance heavy systems that were not considered important from a competitive perspective!. The latter opinion may now have changed at some Airline HQ’s!

A cacophony of apps

Since the beginning of the new Millennium, travel products and their availability has grown exponentially, not only via the internet and the use of desk- and laptop computers but through the development of several completely new travel distribution channels. As an example the popularity of smartphones using a cacophony of apps have enabled travel hungry consumers to access travel-related products within seconds, products that would earlier have taken ages to access for a consumer or maybe weren’t available at all.

Where we are now

Parallel to this evolution, suppliers of travel products have become increasingly focused on building customer relationships in order to gain (direct purchase) customer loyalty and business and attempting to circumvent the intermediaries that they relied on previously to get their business such as the traditional travel agent.

We are now in the middle of a battle for consumer loyalty at a time when consumers themselves are continuously changing their behavior and preferences, where peer-reviews and friend-likes are “King” and where the latest travel trends may only last for less than a year. Based on that it is appropriate to ask where is the travel business going?

Where do we go from here?

There is still room for all stakeholders in the travel supply chain. Obviously, the suppliers of travel products, need to continue to develop their travel enhancing transportation and/or hospitality products and make them available to the travelling public. The intermediaries, e.g. the CRS’ are still necessary in order to provide the overview to travellers and advisers alike. In addition, the consumer advisers, i.e. the travel agents/tour operators are still key players when a collection of single products needs to be turned into a seamless package where expert advice is provided to consumers that are looking for the perfect combination of travel advice, assistance, quality, and price when they purchase travel.

The airlines, accommodation providers, car rental companies and all the rest need to develop and deliver quality products, as required by a loyalty programme, and make their products available in as many sales channels as possible.

The OTA’s, travel agents and tour operators must professionalize their product development, make their products unique and package them in a way that meets consumer needs possibly even with content that only the travel agent is able to provide.

The intermediaries, i.e. the GDS’s, the aggregators and the likes, need to continue to provide an overview of all or as many travel products as possible. They all have a place in the travel supply chain. One question remains though for which I have no answer: When is the current travel business environment considered completely old school? Only time will tell.