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Threatened by Web, Travel Agents Adopt New Tactics

Consumer services: Despite rise in self-booked trips, industry pros are creating niches by exploiting the power of the Internet and offering a personal touch.


Online travel shops from to aim to cut out middlemen such as John Dekker, yet high-tech companies and Internet analysts are spurning Web sites to book trips at his Golden West Travel.

Lower commissions from airlines and higher Internet bookings have helped reduce the ranks of traditional U.S. travel agencies by 16% in the last six years. But by exploiting the very high-tech tools that threaten their business, creative agents are saving clients time and money--often far more than travelers could save online.

Fighting to survive, the agencies have sued airlines and pushed for legislative relief. But their personal ties to clients have proved their most powerful weapon. Customers especially value "the ability of a travel agent to solve problems if something goes wrong," said Bear Stearns analyst Jason N. Ader.

Dekker, a Carlson Wagonlit franchisee, is a case study in what thousands of real-life agents still do best: Target an area, then play an "information-giving, advice-offering, hand-holding role," as Ader put it in a recent report on travel and the Web.

Pounding away at a computer keyboard in his Westminster office, Dekker caters to upscale, Web-savvy corporate travelers who could easily go online to buy, say, a last-minute business-class ticket from Los Angeles to London and back.

On one recent day, however, they would have paid $7,433 for that trip, yet Dekker could get it for them at $4,912, with a bonus trip to Greece thrown in.

How he does it is an insider's lesson in manipulating the system. He tacks on an open-ended Athens visit to the London trip because the two-stop journey is cheaper. He buys the return legs in drachmas, and the fare is cheaper still, thanks to the dollar's strength against the Greek currency. The client saves $2,521 and has a London-to-Athens ticket, usable within a year.

"I used to book our trips online, but I don't have the time to surf the Internet for fares that aren't that great of a deal," says Stacey Cole, an executive assistant at, a San Francisco supplier of news and games to Web sites. Dekker has saved her time and thousands of dollars for the company, Cole says.

Despite such testimonials, traditional storefront agencies are clearly under stress. Lower commissions from airlines and the push both by airlines and bargain travel Web sites such as and already have taken their toll: While travel spending continues to rise, the number of U.S. travel agencies peaked at 32,913 in 1994, started falling the next year and was just 27,729 last December, the American Society of Travel Agents reports.

Senior Internet analyst Henry H. Harteveldt at Forrester Research in Boston expects the number of storefront travel agencies to fall 15% more as online travel bookings rise from $16.7 billion this year to an anticipated $40.7 billion in 2003--about 9% of the total market.

"Travel agents who simply wait for the phone to ring so they can take an order will die," says Harteveldt, another client of Dekker's. "The guys who get it--who add value--are going to make it."

Using the Web to increase his own value, Dekker monitors sites where frequent fliers trade tips and others set up by the airline ticket discounters known as consolidators.

Faxing confirmations to clients using his ticket reservation system used to cost him 50 cents a page. Nowadays, he e-mails them--courtesy of a free messaging account at Yahoo Inc., whose travel site is an online competitor. Dekker saves $3,600 a year on faxes, he figures.

Other agents are using their own Web sites to provide information about still-lucrative specialties, such as cruises and adventure travel.

John Schmitt, for instance, recently debuted a site promoting vacations in Florida, Hawaii, Las Vegas and other resort areas. Nowhere does the site mention that his four-office Superior Travel Service, based in Flint, Mich., also sells airline tickets.

"Niche marketing is the big industry buzzword," Schmitt says.

His site describes popular vacations, provides travel tips and gives links to family-activity Web pages. His strategy is to encourage potential clients to call agents, not to book online themselves, though it is possible for them to do so.

"People still want a handshake relationship," he says.

At the other end of the spectrum, Navigant International Inc. has bundled 32 regional business-travel agencies into a national firm during a three-year merger blitz. It emphasizes high-tech travel management for such corporate clients as Fluor Corp. in Aliso Viejo, which engineers huge construction projects around the globe.

On a bank of video monitors at Navigant's Southwest regional office in Santa Ana, software robots check endlessly to improve each booking with cheaper fares and lodging, better seats and frequent-flier upgrades.

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