Contributed Column


Travel Bug

by Ted Child, Child Travel Services

What a Long, Strange Trip It's Been

Writing about the last 20 years of the travel industry makes me feel both nostalgia for the old days and excitement for the future. These last two decades in this business have been a bit like a turboprop plane ride on a windy day ... so here is my top-10 list of events in the last 20 years that have had a major impact on the travel business.

10: PeopleExpress

People Express was the first real low-cost carrier in our market and changed forever the way people traveled. We went from traveling by bus to traveling by air, and traveling became a way of life for many more people. Keeping track of reservations was a problem. The police were called in numerous times at Florida cities to keep crowds from rioting. There were incidents of over 400 travelers showing up for flights that held 130.

9: Travel Agent Commissions

Ten years ago, travel agencies were paid a 10 percent, uncapped commission on all the airline tickets they sold. A few years later, the commission dropped to 8 percent, followed closely by a drop to 5 percent, only to land at 0 percent within less than a year. Travel agencies by necessity had to become fee-for-service entities, working harder and smarter to find lower fares, provide better service and compete with other distribution channels. It became a whole different way to sell travel.

8: 9/11

We are all painfully aware of the effects 9/11 has had, not just on the travel industry but on our nation as a whole. Our industry lost billions of dollars in revenue and the airlines continue to feel these effects. Going back 20 years, the rules and regulations for issuing tickets have changed dramatically we used to be able to issue "unisex" tickets and people would fly on other people's tickets all the time.

Security at the airports and the way people now have to travel are part of the new reality of this industry forever. In late 2000, there were 30 flights each way between Burlington and Boston; now there are three. With the new screening and security procedures, most folks now find it quicker and easier to drive to Boston.

7: Southwest and JetBlue

When Southwest moved into the Manchester, N.H., and Albany, N.Y., markets, it was estimated that 20 percent of local travelers were driving there to get better fares. With the arrival of JetBlue in Burlington a few years ago, most of the fares went down and almost all the travelers came back. JetBlue has been a remarkable story here in Burlington. Airlines are like sheep: If one lowers the price, they all will.

6: Burlington International Airport

The airport expansion has allowed for new airlines to come into our market, increased service and options for travelers and secured the airport's future viability. For a city our size, Burlington International has done an incredible job providing both the airlines and its travelers with fabulous service.

5: Increased Use of Regional Jets

The upside of having more regional jets in the system is that it has provided more economies for the airlines and offered more flexible schedules and better connections through hub cities. The downside is less-than-spacious seating in these smaller planes and, in many of the destinations, gates that are far away from connecting flights.

4: Emergence of Business Specialty Travel

Corporate travel has exploded over the past 20 years, and for the travel industry, this has meant both opportunity and challenge. Technology to manage and implement corporate travel programs has allowed agencies to become travel management companies.

No longer do we just book air, hotel and car rentals for our business clients, we also negotiate contracts, implement quality- and cost-control programs, provide budget analysis and recommendations, and need to stay at the forefront of changes to corporate travelers' needs and corresponding technology to do a better job.

Consolidation of the national travel organizations has helped to provide agencies with stronger and more expedient technological advances as well as global networks for corporate clientele.

3: Industry Consolidation

Twenty years ago, there were at least twice as many travel agencies nationally and locally as there are now. All the agencies in Burlington have and continue to be some of the best in the nation and operate at the cutting edge of the technology available in our industry. We have had to consolidate to compete for fewer dollars and offer greater options and better service than ever before. Like the airlines, it is survival of the fittest.

2: Health of the Airlines

We all know the trouble the airline industry is in. Labor costs, distribution problems, fuel costs, security changes, ticket pricing the list is long. Our economy, both domestic and global, depends on an efficient and safe public air transportation system. Many scholars would argue that all this is the natural progression of airline deregulation that started in 1978. Let the market dictate. Who do you think will still be around in six months or six years? Ultimately, fewer seats will mean higher prices.

1: Technology and the Internet

As the Internet opened its doors to the traveling public, the airlines, in their haste to capture business, lost complete control over their pricing. What initially was a place for the airlines to get rid of excess inventory quickly became the norm for buying airline tickets. For example, a ticket to Chicago that once cost $1,200 now costs $250. For some reason, the airlines thought the business person would continue to pay these high prices, while the leisure traveler would pay the lower fares. As people began demanding lower fares, the airlines started dropping prices to compete. The result has been the legacy of carriers' lowering their fares below their cost of doing business.

The good news is that consumers are better educated and agencies have been able to offer more professional and specialty service. Everyone in the travel industry is now adapting to the emerging model of travel distribution that will erode the differences between traditional bricks-and-mortar agencies and Internet companies selling travel.

Over the years, traditional travel agencies were more "high-touch, high-feel" with their clients. Internet travel sites cherry-picked the e-commerce customers who didn't care as much about service. As we begin to offer more e-commerce options and the Internet companies begin to realize that customers demand at least a minimum level of service, we will start to look very much alike.

Many questions remain to be answered for the future of this industry. So much is contingent on the airlines' coming up with real strategies for helping themselves in order to return to profitability. In addition, with costs driven down and aggravation at an all-time high, when will consumers demand that more resources go toward better service and then be willing to pay for it?

This flight isn't over yet. Keep your seat belts fastened and tray tables ....

Ted Child is the owner of Child Travel Services in Colchester.

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