Abandoned travel agencies are again flying high

It's no secret that business travelers have, at various times, both loved and abandoned travel agents and business travel management companies.

There was a time when business travelers relied almost exclusively on travel agents for their air, car and hotel reservations. Back then, agents poured over pages of airfares in the periodically-published Official Airline Guide (OAG), hand-wrote airline tickets, and made long distance calls (or relied on TWX telegraphy) to secure car and hotel reservations. It was a very hands-on business and travelers hit the road carrying reams of paper travel documents everywhere they went.

When the airlines introduced computerized reservation systems (known as the Global Distribution System, or GDS) in the mid-to-late 1970s, travel agent efficiency made a giant leap forward. Business travelers benefited, too, from speedier access to a growing and more complex inventory of airfares.

Fast-forward to the early 2000s and the emergence of online booking sites like Orbitz, Travelocity, Expedia and others. The new players stormed on the scene with flashy Web sites and mega-advertising budgets, each declaring they had the lowest fares and steering computer-savvy travelers away from their longtime love affair with travel agents.

To add insult to injury, many major airlines decided they, too, no longer needed travel agents. By making the formerly GDS-only seat inventory available to the upstart booking sites, airlines instantly had a vast new distribution tool.

To emphasize their infatuation with the online sites, the airlines put a final and resounding end to the already-dwindling practice of paying commissions on agency-booked tickets. All-in-all, it was not a good time for travel agencies nationwide. Several, especially smaller mom-and-pop operations threw up their weary hands, whimpered "uncle" and closed the doors for good.

As so often happens in the ebb-and-flow of the marketplace, the bricks-and-mortar travel agencies that made it through the tough years following the dot-com bust and September 11, suffering slings, arrows and client defections, are now regaining favor as the road warrior's trusted sidekick.

Why the resurgence?

Why is this happening? There are a number of reasons.

Many companies recognize the need to more tightly manage travel, typically their second largest budget item. Back in the free-wheeling days, it was easy to let the travel program take care of itself, let the travelers decide when to go, how to get there, and which of their favorite airlines/hotels/car companies to align themselves with. As long as they made sales and generated income, little changed.

But then something did change. Today, business has slowed down, the U.S. dollar has tanked against foreign currencies making international travel outrageously expensive. Skyrocketing fuel costs have had an almost-daily impact on airfares and add-on fees. Airlines have gone bankrupt with alarming frequency and the steady hum of business-as-usual has begun to resemble a herky-jerky clatter.

Clearly, it was time to adjust something. Companies began scrutinizing travel.

Online booking sites began to lose some of their allure as shortcomings surfaced. Travelers and their support staff found they were spending too much time tracking down the elusive "best fare" and managing the many pieces of their online program.

They've also discovered that when a flight booked on an online agency site was canceled (a common occurrence among frequent business travelers), it could be difficult to reuse nonrefundable tickets, or turn them into transferable vouchers, a service routinely offered by full service business travel agencies.

Upfront expenditures were required in some cases. Hotel rooms booked through the online agency required an immediate charge to the company (or traveler) credit card, regardless of the date of travel. Changes or cancellations were difficult if not impossible to make.

And if the traveler needed on-the-road assistance? This, too, could be a problem, when online customer service staff (sometimes located far, far away) was busy on other calls. Call the airline directly for help and hear, "Sorry," they can't access Orbitz/Expedia/Travelocity's online inventory. Frustrations like these sent companies back to the travel agencies they abandoned a few years back.

Service is a factor

"The fact is," said Scott Mast, executive vice president at Burkhalter Travel in Madison, "online agencies offer boiler plate booking programs using their rule sets, and that might not reflect the needs of the client company.

"We give our business travel clients a local senior level agent staff, sophisticated quality control program, monthly reports, accounting assistance if needed, and a lot of efficiencies. We're an ombudsman for travelers whenever they need us. Our services are personalized because we recognize that each company has different needs."

So, is the pendulum swinging? Are companies looking again at traditional travel agency services?

"Absolutely," said Mast. "Almost all of the new-business calls we get are from companies that had been booking with one of the online programs."

Pat Tracey, manager of client services for Fox World Travel, agrees there is a definite trend away from consumer online booking tools. Based in Oshkosh with several Wisconsin locations including Madison, Fox World Travel offers a broad range of business travel services with an emphasis on managing unused tickets and making sure that the client's negotiated air, car and hotel rates are accessed for each reservation.

"Companies are finding that the complexities of corporate travel are too much, that relying only on consumer online booking tools like Orbitz, Expedia and others is not working," said Tracey.

"They are leaving too much money on the table because consumer sites do not factor in negotiated contracts or corporate frequent flyer programs."

To reinforce the message that fares found in the traditional agency GDS are as low or lower than those available from online agency sites, traditional travel agencies cite the annual independent study of business travel fares conducted by Portland, Oregon-based Topaz International.

Each year since 2001, the study found, airfares booked with traditional agencies through a managed travel program were lower more than 90 percent of the time. The study compared a series of identical itineraries booked through online travel retailers like Expedia, Orbitz and Travelocity, airline Web sites, and traditional travel agencies. In the March 2008 study, travel agency fares were less costly on nearly 95 percent of itineraries compared with the same itinerary available online to the public.

Consistency helps

The key word here is "managed." A well-crafted travel policy with a strong top-down mandate is the cornerstone of a good travel management program. Agencies with sophisticated quality control software can program the smallest company policy details into the various tools they use behind the scenes, imposing anything from a gentle reminder to a flat-out "That's an order!" on travelers and travel managers. The resulting consistencies can reduce annual travel expenditures by as much as 15 to 20 percent, even more.

But what about the traveler or travel manager who prefers the convenience of online booking or who doesn't particularly care to talk with a travel agent? Sophisticated agencies have an answer for that too.

Most offer an online booking tool that can be private-branded for the client company, with company logo, individual traveler profiles, and travel policy details tucked in behind the scenes. Reservations booked through the online program receive the same quality control and oversight as those that involve a travel agent and all data is captured for reporting purposes.

In many ways, business travel management is once again hands-on, the way it was back in the '70s but with greater efficiencies and more choices. And far better technology.

Betty Stark is a Madison travel industry consultant and business travel writer with 25 years' experience.