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travel agents face

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    Travel agents face
    Melissa Maugeri
    October 28, 2006 12:00am
    http://www.news.com.au/sundaymail/story/0,,20655654-3122,00.html

    EXTRACT from this article related to Webjet
    According to Richard Noon, chief executive of online group Webjet, some in the industry haven't realised their role has changed.

    Mr Noon foresees a huge shift for agents as consumers access more and more information about their travel destinations via the internet.

    Despite many agents predicting customers will limit online direct bookings to domestic flights, Mr Noon says Webjet had seen a bigger growth in its international bookings.

    "There's a generational change under way (with travellers), 25 per cent of transactions are done online in the travel sector, in the US it's 35 per cent," he says.

    Mr Noon predicts it could growth to more than 50 per cent in the next five years.

    "What the internet is not good at is lifting the veil on the international flight combinations available," Mr Noon concedes.

    And it is the complexity involved in travel that could prove a limitation for the internet, even when its capabilities expand.

    FULL ARTICLE:
    AMID sustained travel industry rationalisations, takeovers and the growing impact of the internet, pundits are predicting dramatic changes in the way travel agents operate.

    This week's $1.6 billion bid by the founders of travel agency group Flight Centre to privatise the company has put the spotlight on the challenges the industry is facing.

    But will slashed airline commissions and increasing online transactions mark the death of the traditional travel agent?

    Industry insiders are divided about how dramatically the role of the travel agent will evolve into the next decade, but all agree agents have to change tactics.

    Lucrative corporate markets and niche travel areas are being sought after as the margins in mass discount trade, especially in the once bread-and-butter airline ticketing, are squeezed.

    According to Richard Noon, chief executive of online group Webjet, some in the industry haven't realised their role has changed.

    Mr Noon foresees a huge shift for agents as consumers access more and more information about their travel destinations via the internet.

    Despite many agents predicting customers will limit online direct bookings to domestic flights, Mr Noon says Webjet had seen a bigger growth in its international bookings.

    "There's a generational change under way (with travellers), 25 per cent of transactions are done online in the travel sector, in the US it's 35 per cent," he says.

    Mr Noon predicts it could growth to more than 50 per cent in the next five years.

    "What the internet is not good at is lifting the veil on the international flight combinations available," Mr Noon concedes.

    And it is the complexity involved in travel that could prove a limitation for the internet, even when its capabilities expand.

    Australian Federation of Travel Agents spokesman Bob Steel, who has worked in the industry 25 years, expects fee-for-service to become more common as agencies look for different income streams.

    "There's been a decline in upfront commissions from airlines but more people are paying agents for the time they spend advising clients," Mr Steel says.

    And he thinks the impacts of the internet on travel agencies may have been overblown in some quarters.

    "It is more of a tool for agents to use with their expertise to advise clients," Mr Steel says.

    "A lot of customers now come into stores after they have browsed on the net and then want help in how to make it work."

    Travel agent fees for services presently vary from a percentage of a total trip cost to $50-$100 per hour for service.

    Independent travel agent Sandra Skelton has seen reductions in airline commissions of about 44 per cent during the past two years. There is no commission on domestic bookings.

    But she says corporate travellers, who make up about 70 per cent of Skelton Travel's business, are happy to pay for good service.

    "They don't have the time to work it out themselves," Ms Skelton says of her inner suburban customers.

    She says her agency focuses on the high end leisure market where internet competition is not much of an issue.

    "Our clients want what you can't Google," Ms Skelton says.

    "Even the corporates want something different, a boutique hotel geared to business."

    She also expects fee-for-service to continue to expand in the industry.

    "We realise our expertise and knowledge are valuable and worth paying for," Ms Skelton says. "People don't mind paying for something if they are getting good value and peace of mind."

    Flight Centre managing director Graham Turner says he has seen margins squeezed tightly at the discount end of the Australian travel market.

    But even he sees the future for his company in providing a better experience for the customer.

    At the Flight Centre annual general meeting this week, he spoke about shops of the future that would be interactive for customers and highlight the range of product on the market.

    He says he plans to expand the company's internet presence but sees this as more as a service for customers who would come in-store for their more complicated travel plans.


 
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