Tough times for travel agents

May 15, 2017 by  
Filed under Don Ross, Travel Logs

BANGKOK, 15 May 2017: The monthly Association of Thai Travel Agents data on travellers booked with its member companies should sound a warning to travel agency owners that all is not well with their business model.

Declines are showing up in the figures counted at Bangkok’s two gateway airports based on clients booked on member company tours. Yet, the Ministry of Tourism’s month figures show a healthy growth in travel to the country even if you take out the dubious overland arrivals that mix tourists and border traders.

Tour operators who have traditionally concentrated on quality tourism from Europe have cause to worry.  Their market share has declined in recent years mainly due to Europeans feeling confident they can book a Thailand holiday online including domestic fares. There are even online services that offer sightseeing excursions in all the major tourist destinations.

True, economic uncertainties in key European markets chipped away at the growth rate, but that only partly explains the declines that have hit travel firms.

Call it the impact of disruptive technology if you wish, but that is no comfort for a travel firm that is locked in to the European travel market. They may not have the ability, or desire, to diversify and compete in Asian markets such as China and India where yields are low and competition intense.

Disruptive technology continues to make inroads. Travel and media were the two industries that felt the first impact of the digital tsunami. But it continues with the likes of Airbnb and Uber invading villa rental and taxi markets. It will eventually empower the tour guide creating opportunities for them to serve travellers directly online without a middleman or agency. In the end it will challenge the core elements of guide registration and licensing as booking apps will empower citizens to act as hosts and share travel experiences with visitors. And why not, tourism is for everyone; individuals and communities, or so the government would have us believe.

It is just one step beyond the scope of Uber to empower a private citizen who has a car to go on online and welcome guests to their home town to show them around through a  ‘Trip Host’ app with payment made through a credit card.

Travel firms survive by retreating into safe niche markets, but rocks and caves they seek refuge in are diminishing.

Today, travel companies can claim they still have a role to play when travellers book multiple destinations requiring complicated itineraries.  However, it is just a matter of time before that niche is also invaded.

We will use travel companies if they offer us something we cannot find elsewhere. If they hire expert guides who can make a travel experience magic and memorable then we would book them.  Only the very special will survive.

Comments

One Response to “Tough times for travel agents”
  1. Tor says:

    Well said. It was more than a decade ago that one could see it coming. Many big and well established travel companies, across the globe from Swiss to Thai based are in real danger of becoming dinosaurs of this sunset industry. Have a look at some of their websites and it is apparent there is plenty for them to catch up in this digital age.