The Failure of The Travel Agent Industry

Contrary to what one might think, the tragic events of 911 and the subsequent “war on terror” have not stopped people from travelguidecompany. In fact, the demand for travel has actually been growing, mostly due to the ever-increasing numbers of retired baby boomers who love to travel. Now, the travel industry is generating annual revenue well in excess of 6 trillion dollars. However, despite this tremendous growth, the conventional travel agent business model has been failing miserably and this represents a great opportunity for you to profit handsomely by marketing wholesale travel direct to the public. Here’s why.

The key to the travel agents’ business was the their ability to get exclusive information to book travel. They had information that the general public was unable to get. In the past if you or I wanted to book a trip it would be necessary to use a travel agent who would access the information through private computer systems such a PARS, SABRE and APOLLO and then relay that information to us. We would use this information to get the best possible travel accommodations to fit our budget and schedule. The Internet has dramatically changed this situation.

Thanks to the Internet, the general public can now access information that was once only accessible by travel agents. Now anyone tap into airline websites directly to book flights and lodging accommodations. In addition to that, there are sophisticated travel search portals such as Priceline, Travelocity and Expedia that access huge databases of travel service to providers to offer attractively priced travel accommodations to the public. The competition for your travel dollar is extremely fierce.

This has had a negative impact on travel agent commissions. The generous commissions that conventional travel agents once enjoyed have now dwindled to nickels and dimes! The airlines reduced travel agent commissions to such an extent that they’ve effectively told the travel agents, “we don’t need you anymore”. Consequently storefront travel agents are leaving the business in droves! Three years ago there were about 190,000 travel agent storefronts in operation. Today that number is down to about 65,000. That’s roughly a decrease of 66 percent! You may refer to detailed supportive data compiled by the U.S. Department of Labor at this address – http://www.bls.gov/oco/ocos124.htm

At this point it should be clear that the conventional travel agent business model is on the decline despite the growing demand for travel. There is yet another factor which I am about to share, that will make you realize the tremendous potential of the wholesale travel niche. That factor is excess capacity!

Excess capacity has always been a bane to the travel industry. Why? Because hotels, cruise lines and resorts can’t make money from empty rooms! So they are willing to negotiate surreptitiously with select travel service companies and even companies outside of the travel industry to make sure that those rooms are filled with travelers even if it means giving them away for free!

They know that once a traveler is on their property, that person will spend money at their affiliated gift shops, nightclubs, restaurants, tour programs and casinos etc. Thus, giving away free accommodations can turn out to be quite a profitable venture. So they’re eager to make arrangements with wholesale travel distributors who will help keep their room filled to capacity every night.

Wholesale travel packages allow a consumer to easily book their own travel arrangements with prestigious service providers and enjoy complimentary and deep discount travel privileges up to 75% off retail rates. Even the hugely popular travel search portals mentioned earlier can’t match these savings!

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