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Praise for real travel agents as OTAs stumble

November 15, 2017 Headline News 2 Comments Email Email

This is not a great time to be a robot. Major online travel agencies (OTAs), largely backed by algorithms and robotics, have seen their share prices hammered by anxious investors – and an influential American travel commentator has told his audience: “Don’t be afraid to call a travel agent”, meaning a human one.

Shares in US-based Priceline Group dived 13.5% last week. The group owns and operates travel fare aggregators and travel fare metasearch engines including Booking.com, Priceline.com, Agoda.com, Kayak.com, Cheapflights, Rentalcars.com, Momondo, and OpenTable.

Meanwhile, shares of TripAdvisor fell 23% and Expedia’s shares dipped by 2.74%. While the Expedia fall was not great, Reuters pointed out that Expedia’s share price had plunged 19% in the past three weeks (since 26 October 2017) – when the company reported weaker third-quarter results than markets had expected.

So what has sent the OTAs flying into rougher weather? Fiercer competition from sharing economy sites like Airbnb and hotel booking sites are among the causes cited. Some hotel chains’ own sites are refusing to be beaten on price. Hotels are offering incentives such as free WiFi to customers who book directly via websites or mobile apps.

In Europe, OTAs are still trying to recover from the reputational damage caused by a European Commission (EC) survey of online travel booking earlier this year, which found two out of every three sites displayed misleading prices.

Travel planning

The European review, deriving from one of the most comprehensive sweeps of travel websites ever undertaken, found online travel sites to be disturbingly unreliable and untrustworthy, with one third giving a final price which was not the same as the first price shown. See: Online travel sites hopelessly unreliable: official report

Travel agents – the real, flesh-and-blood sort – are looking better than ever.

Travel guru Johnny Jet, writing in the American business and finance publication Forbes, said last week that “people of all generations still use travel agencies”.

Jet wrote that while the internet had made it easier to book travel directly, “if you don’t have the time to research or simply can’t seem to put all the pieces to the travel puzzle together, don’t be afraid to call a travel agent. After all, it’s their job to book these complex fares so that you can have the trip of a lifetime.”

Jet said that over one third of Millennials used “offline” travel agents – bricks and mortar in other words.

For the past 20 years, Jet has averaged over 340,000 flown kilometres and 20 countries a year. He has been featured in many major publications and has appeared on ABC, CBS, CNBC, CNN, FOX, MSNBC, NBC and PBS – so his word carries weight.

Jet went on to tell Forbes readers that finding a travel agent who was an expert on the region they wanted to visit would enable them to book the best flights, hotels, and even receive “top-notch recommendations of where to eat and sightsee”.

Jet summarised: “Since the agent has already ‘been there, done that’, they can immediately tell you where to go so you can maximise every minute of the trip.”

It may be the age of robotics and algorithms, but things like service and first-hand experience still count, it seems.

Written by Peter Needham

Currently there are "2 comments" on this Article:

  1. Andrew North says:

    Don’t be fooled by this article. OTAs aren’t going down. OTAs have achieved their success because at heart most people are lazy and they can do all their planning and booking whilst sitting on the lounge surfing on their phone. This means they don’t have to find the time to get to a Travel Agent outside of work hours.

  2. Neb Tintack says:

    Andrew, I suspect anyone that lazy would never travel much at all. Too much effort. They’d rather sit on the lounge and watch it on TV. If OTAs are so great why are investors dumping their shares?

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