Surviving amid turbulent market: Local travel agencies consolidate, specialize

Barbara Davis is sitting behind her desk at Great Southern Tiger Travel checking the roundtrip fares for Northwest flights on her computer when she suddenly becomes excited: prices have dropped dramatically.

Davis, the manager of the agency’s downtown branch, is purchasing tickets for an eight-person group of University of Missouri administrators planning to fly from Columbia to Washington D.C., connecting through Memphis. She’s using WorldSpan, a software program that travel agents use to book travel, including air, cars, hotels and cruises.

The itinerary is complicated because the travelers are departing on different days to attend a national conference in the capital. Davis knew the cost of the flight for the November trip had been $402. She sees on her computer that some of the fares dropped to $324 and, even lower, $299, in some instances. She quickly books the flights, still smiling.

“If you booked these tickets on Expedia last night you would not be able to change to the lower fare today, and you probably wouldn’t even be aware of the fare change,” she says.

Travel agencies in Columbia and across the nation have been forced to adapt to a series of developments that began with the terrorist attacks on Sept. 11, 2001. Many people stopped taking passenger flights, the country entered a recession, airlines stopped paying commissions and more people gained access to the Internet and made their travel arrangements online.

Nationally, the number of travel agencies fell from 30,077 in December 2000 to 17,914 in September 2008, according to the Airlines Reporting Corporation.

In Columbia, there’s been a two-thirds reduction in full-service travel agencies since 2000. There now are three major agencies, none of which are locally owned: Great Southern Tiger Travel, Suzi Davis Travel and AAA. Consolidation has been a prominent trend in town with agencies being bought out by larger corporations.

The current economic downturn and low consumer confidence is making their jobs even more difficult. The Travel Industry Association predicted in October leisure travel will drop 1.3 percent in 2009 and business travel will decline nearly 3 percent.

To succeed, travel agencies have learned to cater to a wider range of travelers. Leisure and corporate services are still provided, but agencies have also become specialized. They’re offering trips for specific segments of consumers, such as student travel.

Agents known for providing good service have also seen a return in customers. Agents say travelers have had bad experiences with Web-based arrangements and now want personalized, human service again.
Roy Shelby, manager of the Great Southern agency in the Forum Shopping Center, points out a key element that online booking sites don’t have: experience. Right now, Shelby has more than 150 years of experience among seven employees at his office including him. “And with experience comes loyal customers,” he said.
Consolidation is another method of making ends meet. “It’s cheaper to do things with a big company,” Shelby said. “Cost saving, not revenue, is the name of the game right now.”

Shelby’ office became a part of Great Southern in 2006 when Shelby and his wife, Francee sold their agency, Global Travel, which they had co-owned since 1991.

Barbara Davis owned Canterbury Travel from 1975 to 2005, when she was bought out by Great Southern. She’s  now the manager of Great Southern on 10th Street downtown. The two Great Southern offices in Columbia will become one at the Broadway Shops by the end of the year, Davis and Shelby said. Great Southern is a regional agency that has 12 locations in Missouri, Kansas and Arkansas.

Jerry Price was the owner of Summit Travel at the Crossroads West Shopping Center for 21 years before the agency was purchased by Suzi Davis Travel earlier this year. Suzi Davis is a regional agency with two locations in Missouri and six in Illinois.

Price said that Suzi Davis approached him to see if he was interested in selling Summit Travel. “Suzi Davis is a great partner for us, and it was an issue of perfect timing,” he said. “After visiting with Suzi Davis, we decided to follow through with them because it was a win-win situation for me, the staff and the community.”

Price has remained as manager of the agency with five employees. He said Cooper Travel and O’Hara Travel Service are among the agencies that have folded in the past six years.

Travel agencies make money through fees and commission. After travel agents stopped getting commissions from airlines, they started to charge fees to their customers for booking  flights. Typical prices for corporate or leisure flight booking include $25 for domestic flights and $40 for international flights, but the charges vary by agency. For AAA travel, also located at Crossroads West Shopping Center, there are three different priced memberships. The company charges fees per booking depending on a customer’s membership status, but also will provide service to a non-member.

Travel agencies receive commissions from hotels, tour companies, car rental agencies and cruise lines when they make the travel arrangements. The AAA travel agency is part of the larger American Automobile Association that provides membership, insurance, maps and financial help. Lynne Schwartze, the agency manager, said commission varies from 8 percent to 20 percent, but the amount depends on the market.

Specialization is another key aspect for the evolution of travel agents. In a phone interview, Peter Greenberg, “The Today Show” Travel Editor said, “To avoid going out of business, travel agencies have become specialized.” Agencies are segmenting their market to succeed, he said. “It’s not so much the Internet versus travel agents, as it is the Internet versus information and specialization,” he said. For example, he said agencies are providing student travel, cruises, senior travel and even quasi tour travel.

One specialized type of traveling in Columbia is athletic department traveling. Davis said the Great Southern works closely with MU for travel itineraries. If an agency is handling athletic travel, it needs to have knowledge of NCAA regulations for coaches and recruits she said. “For instance, just think of the expertise required to know the type of aircraft equipment that can accommodate the poles for pole-vaulting for the track team,” Davis said.

Conferences bookings are another niche Great Southern serves. For example, Davis said they have handled the Annual Dialysis Conference for 12 years. With seven employees, Great Southern also handles a lot of student travel, she said.

Destination weddings and honeymoon travel are specializations that Shelby’s office provides. Shelby also mentions affinity groups: “These are any groups that have an affiliation or common interest whether it be senior travel, student travel, church groups or adventure travel,” he said.

Schwartze of AAA said they are more of small full service agency that serves Columbia and the surrounding area. She said the company will try to accommodate all requests from their clients but they don’t specialize in particular. There are three agents and one part-time worker at the agency.

Also over time, some agents become experts at a certain type of travel.  Dan Stookey, at Shelby’s Great Southern, specializes in Brazil. He was in the Peace Corps in Brazil and met his wife there. He still returns a few weeks every year and knows the country well. Others include a specific agent knowledgeable about Disney travel, honeymoon travel and European river cruise travel, Shelby said.

Price said that Suzi Davis travel is more of a full-service retail agency and handles all types of travel. But he mentioned that he is a Mexico specialist because he has traveled there extensively. The company also has an agent that works on the cruises and another agent that usually handles the corporate travel bookings.

Another recent trend is that people are leaving the Internet to book travel and are beginning to use travel agents again. These examples are not in response to the Internet but rather people are beginning to see that using a travel agent is more efficient and reassuring.

Davis breaks it down into corporate and leisure travel to explain. For corporate, companies want to know how their money is being spent, she said. Companies don’t have time to find the best deals online and donÕ’ want their employees spending time to do so either. Davis also said using an agent helps set a corporate policy to monitor their employees.

For leisure travel, Davis has seen a return of consumer confidence in the industry. “Too many people have been burned online and they want personalized human service,” she said. She mentions a travel horror story. For example, a couple booked online what they thought was a flight to San Jose, Costa Rica but the ticket was actually for San Jose, Calif. “They had a great time in California,” she said, laughing. “But since they booked online there was no one to call to try and fix their plans.”

Price offers another advantage of travel agents. People are beginning to see the value of a travel agent because we can save the consumer time, he said. Travel agents have more tools available to find the best price because they have a software program to check all the prices for any part of a trip, he said. Plus many don’t think about traveling on a different day or flying out of an alternative airport, he said.

Mike Detrick, the director of business development at Great Southern, said that traveler security is most important. He said they can get a customer out of an area faster if a natural disaster is coming or they can rebook a flight faster if it is canceled. If customers don’t use a travel agent, whether booking travel with the Internet or not, they are going to have to stand in line at the airport to rebook their flights if they are canceled. If customers book with an agent, just a phone call is needed to get them on a different flight, he said.

Fritz Cropp, director of International Programs for the MU School of Journalism, uses travel agents in town from a corporate standpoint. “Using a travel agent saves us administrative time instead of surfing for fares and you have more flexibility to change your tickets,” he said. The school wants to offer the best rates for students and group travel is often a way to do this.

With trips and semesters abroad to Europe, South America and Asia, travel agents are a valuable source of information for Cropp and the International Programs staff. Travel agents are also helping in getting refunds or credit for another trip if you need to change plans, he said.

But are people even still traveling? According to Shelby they are. “People are booking with us but further in advance and some budget a little more,” he said.

Schwartze agrees. AAA members are still traveling to many parts of the world, she said, citing Disney World, Alaska and cruises are the most popular bookings.

As with any business, agencies are still trying to stay on top of their game. Great Southern now offers business hours from 6 a.m. to 10 p.m. and a phone number to call after hours.  The agencies also have Web sites that offer online bookings, and customers can see what packages and deals are available.

And with the Internet comes more educated travelers that come to a travel agency. Schwartze said, “People are much more informed.” People may not be booking travel on the Internet but they are researching their travel plans on the Web, she said. So now agents must be even more knowledgeable about destinations and be more accessible to their clients, she said. For example, a client may come into her office wanting to travel to France. That client may research for weeks on destinations, hotels, and travel options in France, so Schwartze needs to make sure that she continually researches destinations and traveling because “unfortunately I haven’t been everywhere,” she said smiling.