Intermediaries
To me this is the most fascinating part of the travel industry. I have spent the majority of my career either working directly with intermediaries or supporting them. There are three types covered below. But, before I jump into those descriptions let me answer the main question that all of them get asked regularly.
How do they make money?
Intermediaries are paid a commission when they sell a supplier's product. One key thing that most consumers don't understand is that the supplier's pricing is the same whether you book directly with them or through an intermediary. If you book directly with a supplier they keep the commission for themselves and essentially make more money on that particular booking. Suppliers pay intermediaries a commission because the intermediary is providing the sales and service to the consumers. In addition, many travel agencies and agents charge fees for access to their time, knowledge and expertise. In essence, the client is hiring the travel agent to plan and book their vacation.
Let's get into it...
Travel Agencies & Agents
I'd call them "traditional travel agencies" but, in the evolving landscape many of them are anything but traditional. When referring to travel agencies on this website I'm talking about bricks and mortar retail travel agency locations and travel agencies that have some/all of their agents working from home. The key differentiating factor is that some/all of the travel agents that work for them are employees. Travel agencies exist in many forms:
- Independent - Agencies that are completely independent. They have no affiliation or dependency on any other agency or agency group.
- Consortia - Agencies that join a consortia to obtain benefits like higher commissions from suppliers, marketing support and more.
- Franchised - Agencies that sign a franchise agreement (e.g. the McDonald's of travel agencies) and receive higher commissions from suppliers, business operating guidance and more.
Like travel agencies, travel agents exist in many forms:
- Independent Agents - Agents that are completely independent, typically they are a 1-2 person shop.
- Independent Contractors - Agents that are affiliated with a host agency or with a retail agency but, they are not an employee of either.
- Retail Travel Agents - Agents that work as an employee of a travel agency.
There is a lot of talk about "home-based" agents in the industry. The truth is that an agent can be home-based and work under any one of the categories above. Just because they are home-based does not mean they are independent and/or part of a host agency.
Want to learn more? Here's the nitty gritty on the main players of Travel Agencies and Agent Types.
Every year Travel Weekly (the most-read trade publication) publishes the Travel Industry Survey, check it out to learn about the latest trends, issues, up-and-comers and more.
Below are some great articles about travel agents that have been featured in trade publications, USA Today, Skift, Cosmopolitan, Fortune and others.
Travel Agencies Are Having a Moment Amid Covid-19 Chaos
In The Land Of Travel Agents, The Tables Have Turned
The Real Secrets About Travel Agents That Travelers Don’t Know
The Truth About Working with a Travel Agent
What a Travel Agent Can Do for You That a Search Engine Can’t
Online Booking Is, Like, So ‘90s: The Humble Travel Agent Is Making a Comeback
Why travelers are returning to travel agents
Millennial Families Are Turning to Travel Agents
Travel Agents Are Back, Says A New MMGY Report
Travelers Are Embracing Human Travel Agents Again
12 Reasons Why Being a Travel Agent Should Be Your Dream Job
Millennials Are More Likely to Use Travel Agents Than Any Other U.S. Demographic
Six Reasons Travel Agents Are Back
Travel agents haven’t been replaced by the Internet — in fact they’re more in demand than ever
Five reasons to use a travel agent for a destination wedding
Travel Agent Industry Executives Argue That Agents Are Coming Back
Why You Should Use a Travel Agent
Online Travel Agencies (OTAs)
Before the internet, travel agents were the only resource for consumers to go to for travel planning advice and making a booking. Since the Internet completely disrupted this space, one of the key disruptors has been OTAs. Consumers can now be their own travel agent because OTAs put all of the inventory and options at their fingertips. What OTAs are lacking is the personalized service and confidence that comes from a travel agent. The biggest names in the OTA business:
Aggregators
These guys are the middle men of the middle men. Aggregators pull together all of the options, but in the end send you off to an OTA or a Travel Agency to make the booking. Aggregators are helpful if you want to search multiple options across brands or be your own travel agent, etc. The biggest names in the aggregator business:
Kayak