Travel Agents Are Staging a Comeback

SmartMoney Magazine
Travel Agents Are Staging a Comeback
By Kristen Bellstrom

WHEN SHE WAS PLANNING her birthday trip to New York City, Caroline Koons Forrest started where most of us do: online. She checked everything from Hotels.com to the Four Seasons' site. No luck. Everything was booked solid, outrageously priced or completely unfamiliar to her (the Days Hotel, anyone?). So the West Palm Beach architectural designer did something she hadn't done in ages: switched off her computer and called a local travel agent. Minutes later Stacy Small of Elite Travel International phoned back with a room at her first-choice hotel, the Four Seasons, at half the $1,600 price tag for a suite Forrest had spotted on the web. The icing on the cake? An actual birthday cake, which awaited Forrest and her husband when they entered their room.

After more than a decade of decline, the humble travel agent is staging a comeback. Frustrated with the recent rash of sold-out hotels and airline seats, travelers are discovering that for all the hype, web sites like Hotels.com, Orbitz and Travelocity are losing some of their edge, especially when it comes to high-end locations. And customer displeasure is starting to show; growth in the once red-hot online travel business is cooling, up 20% last year after a 28% increase in 2004. Enter the travel agent, the most savvy of whom can use longtime connections to secure that "sold out" room or coveted aisle seat. Written off as dinosaurs not so long ago, agents are seeing a welcome bump in business, with the 2006 average weekly sales per agent location up 15% over the year before. High-end travel is turning up as well, with members of Virtuoso, a consortium of more than 300 luxury agencies, racking up $4.2 billion in sales last year, an 11% jump over 2005.

Many agents have become a specialized bunch, some offering adrenaline-fueled adventure trips, others pricey safaris. Travelers come to Stacy Small for high-end requests like a line on a Tuscan villa or a lesson with the best ski instructor in St. Moritz. Other agents go after even thinner slices of the travel pie, with specialties ranging from twins-only cruises to kosher dude ranches. Linda Androlia of Sunstone Tours in Malibu, Calif., books nothing but small cruises to wildlife-rich spots like Alaska or the Galapagos. But fair warning: Such expertise comes at a price. Some agents charge anywhere from $150 to redeem a frequent-flier award to a $500 consulting fee for arranging customized trips.

For an industry that was all but left for dead, any recovery is quite a shift. In the 1980s, agents were the gatekeepers of travel, booking nearly 80% of all airline tickets. That changed in the mid-1990s, when airlines began hacking away at the commission rate until it finally disappeared after 9/11. At the same time, the first online travel agencies started to gain traction, and consumers began to discover that they could book their own tickets just as easily — and often for less. Sales plummeted, and the number of agency locations dropped by nearly 50% between 1996 and 2006.

Setting the stage for the agency renaissance is a booming travel market that has vacationers scrambling to find room at the inn. Airports are mobbed, with the major U.S. carriers filling 79% of seats last year, the highest rate since World War II. At the same time, hotel occupancy rates hit their loftiest mark in nearly a decade last year, according to Smith Travel Research. It doesn't hurt that agent-friendly businesses such ascruise lines are also growing, with a record 12.6 million people expected to take a cruise this year.

And while travel web sites point to their service alerts and 24-hour hotlines, traditional agents often have the upper hand when it comes to dealing with the mounting travel hassles. Ellison Poe, president of Poe Travel in Little Rock, Ark., recently fielded a desperate call from client Terry Harris, a marketing vice president who was en route to a meeting in Cuba when a hurricane stranded him in Miami. With all the nonstop flights out of commission, Poe had to get creative, ultimately managing to get Harris to Cuba by way of Mexico City. "I can't imagine booking a trip without her," says Harris.