Online Travel Agencies (OTAs) such as Kayak, Expedia, and Orbitz make booking travel— for both business and pleasure— as easy or as difficult as the traveler chooses. With a simple search and a click of a button, a traveler can comprehensively book accommodations and flights. With the convenience and 24/7 availability of OTAs enables travelers to find excellent deals, if they devote the time. On the other hand, travelers not as motivated to save money on bookings, such as business travelers, may take advantage of the OTA system to book the first flight that fits their schedule, regardless of cost.
Travel agents and business travel have typically gone hand in hand, but with the newfound strength of OTAs, can agents prove their value? While OTAs are largely implemented in leisure and business, agents remain popular in niche markets, continuing their tradition of booking.
A place for agents?
Travel Leaders Group conducted a travel habits survey in late 2015 and 40.2% found business-focused travel agents expect corporate travel bookings to remain steady in 2016. Further, 36.6% expected bookings to in fact increase year-over-year. Altogether, traditional US travel agencies still account for $95 billion in revenue in 2013 (CNN).
Continued usage of travel agents in the digital era is likely due to the intrinsic knowledge and guidance of individual agents. Business travelers appreciate the comprehensive, personal advice from travel agents. When a trip is booked, travel agents will be fully briefed all components of booking— necessary visas, recommendations, lodging, etc.
This information is available via OTAs, but is often lost in the vast amount of resources that travelers can access in seconds. A less experienced traveler may get lost in the vast amount of information and resources. This overwhelming access to information causes business travelers to hand over booking responsibilities to a human agent.
The niches where travel agencies are holding especially strong are a diverse set: corporate travel, luxury, cruises, emerging markets, and specialty trips (CNN Travel). The value of expertise over savings is tradeoff that these markets are willing to make.
A few specific countries—namely Germany and Australia— have a strong preference for business travel booking through agencies. As of 2015, 47% of Australian business travelers still preferred to book with travel agents, according to a Roy Morgan study.
However, no matter the loyalty from some business travelers, the industry of in person travel agents is overall declining.
Rise of the OTA
As of 2013, the number of traditional travel agencies in the United States has declined to about 13,000. Comparatively, there were approximately 34,000 travel agencies in the mid-1990s (Forbes).
Google conducted an in-depth study of leisure and business travel habits in 2014, finding that 77% of business travelers use the internet for business travel planning in the US. Further, 70% of business travelers use an OTA specifically, citing reasons of lower prices and better deals.
The bottom line drives the majority of business travel bookings, and business travelers can clearly see these savings—instantly— in OTA platforms. Especially when the issue of travel compliance arises, easily accessible savings and comparison are helpful to the business traveler.
The Google research additionally found that 2 in 3 business travelers are open to trying new loyalty programs if they provide a “new, different, or unique experience.” Thus the airline and hotel loyalties traditionally maintained by travel agencies hold less value to the traveler, driving use of OTAs.
For the motivated, modern business traveler, online travel agencies offer a cheap 24/7 planning option. The trip is not comprehensively managed, but with extra effort, businesses can reap savings.
Emerging Technology Mobile Travel Chat Poses Challenge to OTAs
Looking to bridge the gap between a 24/7 accessible online booking and the personal touch of a human agent, mobile travel chat brings artificial intelligence (AI) into the trip planning process. A virtual travel agent, created entirely through AI, has the capability to plan, organize, and manage entire trips.
TNooz, a website that reports trends in travel technology, describes the capabilities of the virtual travel agent: “Mobile Travel Chat – also known as Mobile Travel Concierge, Mobile Travel Agent, Artificial Travel Intelligence, Travel AI — is a new mobile travel application that is making waves in the consumer travel industry. Harnessing the power of machine learning and natural language recognition, it offers a more personal and free flowing experience than OTAs because of the way users interact with it.”
The personalized nature of the service, combined with the convenience of being SMS/ mobile based, is drawing immense interest in mobile travel chat. With a virtual agent, convenience, price, and service do not have to be compromised.
As companies turn rely more and more on innovative travel solutions to save money on business-related travel, emerging technology has the opportunity to edge in on the competition and win over users with its comprehensive services and mass appeal.