The market place has changed and your role must adapt. Allow me to describe an analogous set of market dynamics. If we go back about 25-30 years ago, travel agents were enjoying a commanding position in the travel services industry. They were virtually indispensable as the penultimate middleman linking travel consumers to vendors. They were the access point to travel reservations, whether it was planes, trains, boats, hotels or tours. By and large, the vast majority of travel consumers researched their travel through a travel agent and relied upon their advice in selecting travel vendors.
Consumers could not comparison shop travel options or pricing. Travel agent fees (compensation) were built into the pricing of the tickets and room charges so most of us did not know how travel agents were compensated, nor did we know how much they were paid. After all, we did not even use the term transparency then. And, for the most part, we did not care since we did not have direct access to reliable travel information, nor could we interact directly with travel vendors. Do you see the parallel here?
At about that time, many major corporations starting creating their own travel departments to handle all travel reservations for business travel for their employees and executives. That was a major setback for travel agents, but they still held a lock on the personal or leisure travel market, and it was a growing segment of the industry. While many were concerned, even anxious, about the market dynamics, especially since a number of their peers had already sold or merged or simply closed their doors, still they had always made a very comfortable living and surely this would continue since they provided great service and their clients were very loyal. Does any of this sound familiar?
Then, out of left field, this global communication tool called the Internet exploded on the scene and it was the last straw. It provided consumers with direct access to information, decision support tools, comparative pricing and access to all manner of travel vendors. So for those that had defined their role as the access point to travel services, they were rendered irrelevant or obsolete in the span of a decade.
There is hope
And yet, there still are a small number of highly successful travel agents who read the writing on the wall and realized that their value proposition was their knowledge and expertise. So, they morphed their business model and no longer handle commoditized service offerings. Instead, they specialize in tour packages, exotic destinations, more complex travel itineraries, and cater to a more affluent clientele.
In short, they reinvented themselves and leveraged their professional capabilities, technology and relationships to make themselves a trusted adviser whom consumers will pay for their services.
I sincerely hope that you can see that this all has been happening in our industry for quite some time already, and that even more dramatic change is on the horizon. Please stop and reread the prior several paragraphs and fully grasp that the analogy is very real and quite valid. Then decide which course of action is best for your business. Standing still and remaining the same is not an option. Just ask all the former travel agents. Contact me to discuss this further or to share your opinions. Its that important.
Kwicien is managing partner at Baltimore-based consulting and advisory services firm Daymark Advisors. Reach him at jkwicien@daymarkadvisors.com.
