Online is no longer always the least expensive alternative
Business travel itineraries booked on public Internet sites such as Orbitz, Expedia, Travelocity, and the airlines' direct sites have been found to average $75 more per itinerary than those booked by a corporate travel agency, according to a study conducted by Topaz International. (10/31/2007)
The independent research firm serving the corporate travel industry has provided comparative studies since 2001, and in each year, found that agency fares were equal to or lower than those offered through online sites in over 91% of itineraries.
"The five years of comparative airline purchasing patterns indicates that the online alternatives are not always cheaper, but in fact have been higher over the past few years," said Bradley Seitz, President and CEO of Topaz International.
According to an official release, there are two primary drivers in the purchase of business travel today: price and service. And, in both differentials, corporations that use a travel management company are coming out on top.
"The model of the airlines in recent years has been to encourage travelers to go online to book directly on the airlines´ websites. This circumvents the travel agent, who has always served as an advocate for the consumer, keeping their best interests in mind. The problem is that while web fares initially created the perception of low cost, suppliers are now maximising their yields by driving up prices. The result? Online is no longer always the least expensive alternative. Travel agents, on the other hand, have the ability to search online fares and traditional GDS [Global Distribution System] fares, and pass along the best possible deals to their clients," said Don Raad, Owner of MSW LI, a Long Island-based boutique travel agency that generates $20 million in annual travel sales, and a member of the TRAVELSAVERS international marketing organisation.
The issue of service fees must also be considered. "Most online sites charge a whole litany of service fees, for uploading supplier discount contracts, managing profile data systems, and monthly online management fees, just to name a few," said Azzam Hajyousif, President of Apollo Travel, an independent travel agency with annual sales of more than $30 million and offices in the US and Greece. "A corporate travel agency typically only charges $15-20 per airline ticket."
But, according to Hajyousif, the greatest value in using a travel management company, from a pricing perspective, lies in the fact that an agent constantly analyses travel expenditures on their clients´ behalf and uses their personal relationships with suppliers to negotiate the lowest fare options, which are generally not available to the public.
"Taking this operational model one step further," he said, "when an agency is part of a global organization, like TRAVELSAVERS, where we engage in account-sharing practices with other agency members around the world, the benefits to corporations increase exponentially. For instance, when a multi-national client has travel requirements in the US, Mexico, Germany and Asia, we have experts on the ground in those regions who have access to the lowest fares, and who can provide local intelligence and highly personalised service."
A.J. Rick Mazza, President and CEO, TRAVELSAVERS, a global marketing organisation for independent travel agencies, summed up the latest round in the online-versus-agency debate: "Disillusioned with the Internet, both business and leisure travelers are now eagerly returning to their travel agents. On the positive side, technology has opened up so many extraordinary possibilities in our world, but we also need to be careful about its dehumanising efforts. We advocate for corporations to take advantage of the best of both worlds…work with an experienced travel agent who uses today´s technology to assess and manage your travel expenditures. And, keep in mind that in our hyper-speed digital society, relationship-building is still a key element of any business transaction. Travel has always been a personal business, and always will be. Corporate travelers need the high-touch factor that a dedicated travel agent provides."