Travel Agencies vs Online Travel Sites

Marketing Research Project

Prepared by:

Dillon LaHaye

Hillary Minnaert

Nancy Mohamed

Thomas Obarski

Brandon Wagner

MAR 413: Marketing Research Fall 2014

Dr. Nancy L. Harrower

December 14, 2014

Travel Agencies Versus Online Travel Sites

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Concordia University December 2014 Travel Agencies Versus Online Travel Sites

Table of Contents

Executive Summary .....................................................................................................................3

Background ...................................................................................................................................4

Objective ........................................................................................................................................5

Population Description ...............................................................................................................5

Sample Selection ..........................................................................................................................5

Research and Design ...................................................................................................................6

A) Methodologies ................................................................................................................................. 6

B) Limitations ........................................................................................................................................ 6

Data Analysis ................................................................................................................................7

A) Survey ................................................................................................................................................ 7

B) Interviews ........................................................................................................................................ 43

C) Secondary Research ...................................................................................................................... 46

Recommendations ......................................................................................................................48

Conclusion ...................................................................................................................................50

References ....................................................................................................................................51

Appendix .....................................................................................................................................52

A) Online Survey ................................................................................................................................ 52

B) Interview Questions for Travel Agents ..................................................................................... 64

C) Real Tourism Output: U.S. Bureau of Economic Analysis .................................................... 65

D) Travel Leader’s Price Guide ........................................................................................................ 66

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Executive Summary

With the expansion of the Internet, many businesses have found it increasingly difficult to

compete with online companies. This holds especially true for travel agencies across the United

States. The number of travel agencies has decreased a significant amount as the number of

online travel booking sites has increased. The purpose of this research project is to compare the

viability of the current travel agency business model to that of online travel booking and

discover how the travel agency business model can be improved to compete more effectively

with online travel booking sites.

In order to gain insight to the current travel agency business model, interviews were conducted

at travel agencies in the Minnesota Twin Cities Area and in Moline, Illinois. A survey was also

sent out to Concordia University, Saint Paul students, staff, and faculty, as well as family,

friends, and acquaintances of group researchers, with the intention to survey those who have

traveled within the last year. A total of 672 individuals took the survey on traveling, with

74.55% of those qualifying to take the full survey.

An analysis of both surveys and interviews was conducted to evaluate client and agent

responses. It was discovered that different age cohorts have different perceptions towards travel

agencies. There is also a general lack of knowledge about the services and prices offered

through travel agencies. Those surveyed expressed a concern with the time and convenience

required to book through a travel agency, as well as a concern with relationship development

between clients and agents.

Recommendations were formulated based on the responses from the surveys and interviews.

The following are recommendations to improve the business model of travel agencies:

1. Reposition the perception of travel agencies in the eyes of customers.

2. Research and market to each age cohort based on the unique characteristics of the

generation.

3. Develop a strong relationship with clients through the implementation of technology in order

to eliminate concerns with time and convenience.

Through the appliance of the recommendations, which are based on extensive research, travel

agencies have the potential to gain a higher percentage of customers and improve the current

business model in order to more effectively compete with online travel booking sites.

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Background

Within the last 100 years, there have been advancements in machinery and technology that have

revolutionized the way that humans live. Automobiles and airplanes have become common

means of transportation, and the Internet has allowed access to information through the simple

click of a button. The effects of these inventions are such that businesses must adapt to ever

changing and advancing technologies in order to keep up with the new desires, demands, and

expectations of consumers. At one point in time, it was common to load the kids in the car, grab

a map, and set out for the Grand Canyon. That tradition shifted to the utilizing of travel

agencies to book the perfect family vacation. With the Internet becoming ubiquitous in the

United States, travel booking sites have sprouted across the vast field of the World Wide Web,

allowing travelers to book their trips online without leaving home.

In light of this technological revolution, it appears that travel agencies are being choked out of

existence by the ever-growing online travel booking sites. According to Rebecca Weber, travel

analyst for CNN, there are only 13,000 travel retail locations currently in the U.S in comparison

to 34,000 locations in the 1990s (Weber, 2013.) Another report from the Bureau of Labor

Statistics found that in 2012, there were 64,680 full time travel agents whereas in 2002, there

were 95,360 (Kennerly, 2014). This dramatic decrease in travel agencies and agents can be

correlated to the increase of users on Internet travel sites such as Kayak and Expedia. According

to website trafficking analysis site Alexa.com, Expedia.com has 25 million unique visitors each

month and Kayak has 13 million unique visitors each month (Competitive Intelligence, 2014.)

Unfortunately for travel agencies, the Internet and its users are not going anywhere; the

problem will only grow. Social media and travel applications are expected to continue to

whittle away at the remaining agency market share.

Businesses must be ever adapting and evolving in order to keep up with competition and

consumer demands. The moment a business becomes obsolete and archaic is the moment that

business dies. For businesses that are primarily based on service, it can be especially difficult to

compete when technology replaces human interaction with online services. This is particularly

true for travel agencies as attempts are made to compete with the ever growing and increasing

online travel booking sites. Although there are still some travel categories such as luxurious

vacations or corporate trips in which utilizing a travel agent is preferred, it is still vital for travel

agencies to try and regain customers from online travel sites.

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Objective

The purpose of this study is to gain knowledge and insight of the travel industry. Specifically,

this study will attempt to discover traveler preferences and explore options as to how travel

agencies can gain a larger market share of the industry. To achieve this, the following question

must be posed and answered: Compared to a growing trend in online travel booking, what is

the viability of the current travel agency model and how can it be improved to compete with

online travel booking sites?

Population Description

When considering the population for this study, it was concluded that there are three distinct

populations that need to be surveyed and interviewed. These population groups were selected

because of the influence and potential aide each contributed to the process of solving the

objective. The population therefore will include those who book tickets online, those who book

tickets through a travel agency, and travel agents.

The desired population is as follows:

United States travelers who have traveled by flight or cruise within the last year

Travel can either be foreign or domestic

There is no bias on demographics including age, gender, income and ethnicity so that

correlations can be drawn between specific cohorts and travel preferences

Travel agents who are currently involved in the travel industry

Sample Selection

Three sampling techniques were chosen for this study: theoretical, purposive and convenience

sampling. Theoretical sampling starts from theories made based on previous published

information about travel agencies. The theoretical sample will put these assumptions to the test

by designing the survey questions to let the participants confirm whether the initial theories are

right or wrong.

Purposive sampling, which relies on the judgment of researchers to select the population of the

sample, will be used to choose the survey participants. This is due to the specific traveler

population needed to solve the objective. Therefore, travelers that use the Internet to book trips

as well as those who use travel agencies will be surveyed. Finally, convenience sampling will be

utilized to find candidates to fit the population. Convenience sampling selects participants

based on the proximity and convenience of the researcher. With this in mind, the survey was

issued to students, faculty and staff of Concordia University in St. Paul as well as family,

friends, and acquaintances of group researchers. Also, travel agents were interviewed based on

the location of the agency in relation to the researcher’s living arrangements.

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Research and Design

A) Methodologies

In order to facilitate exploratory research requirements, group research members emailed and

phoned travel agents to organize interviews. One member made several phone calls and

messages to four local travel agencies in the Maple Grove area with two responding with

interest and one responding beyond the deadline for information collection period. Two other

members telephoned the first two travel agencies listed on a Google search of “Travel agencies

in Woodbury, Minnesota.” Both agencies responded with enthusiasm and support of the

research assignment allowing interview dates to be set. The remaining members used personal

connections for the interviews located at The Best Travel Agency in Moline, Illinois as well as

CTS with Amy Mohamed.

The selected travel agents ranged from 6-22 years of experience in the industry and were in

various departments and positions including owners, managers, and department associates.

In regards to the survey, marketing chair and Professor Dr. Harrower provided an email list of

all current students, faculty, and staff. The survey was then developed through the survey

construction website, Survey Monkey, which allowed the facilitation of all responses as well as

in-depth view of the data collected. The survey was then sent to the provided email list on

Friday, November 14th 2014 and was closed on Monday, November 24th 2014. Additional

surveys were broadcasted by research members on social media sites such as Facebook and

Twitter and were also sent to personal contacts via email. To entice respondents to complete the

entire survey, incentives were provided in the form of a chance to win one of two Target gift

cards for ten dollars.

B) Limitations

Although the process of the study was mainly positive, there were a few limitations experience

in the course of research. The limitations faced are as follows:

No other email list was used other than the one provided by Dr. Harrower

The survey was only open for ten days with no guarantee that potential respondents

would see and reply to it within that timeframe

Some surveys were incomplete with open ended questions not answered fully

25.45% of respondents did not qualify for the survey

A Travel Agency responded one week after asking for interviews, deadline to collect

information was over.

One travel agent refused to be recorded

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Data Analysis

A) Survey

To learn more about the tendencies and preferences of travelers, a survey was developed and

sent to Concordia St. Paul students, faculty, and staff members, as well as family, friends, and

acquaintances of group researchers. With 672 respondents, the following charts reflect the given

responses.

Question #1

This question was used to eliminate respondents that did not meet the population

requirements. If the respondent did not travel by air or by cruise within the last year, they were

disqualified from the rest of the survey. The results show that most of the population traveled at

least once during that period. The purpose of this question was to assess whether the

information provided is based on recent information.

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Question #2

Question number two was used to separate the population into two groups, online travel site

users and travel agency users. This allowed further analysis to be developed because

correlations could be drawn between the responses of the user and the group they

encompassed.

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Online Travel Site Users

Question #3

In this chart, the main reasons that caused the population to choose online bookings are

clarified. People want to book trips easily and rapidly without having to pay travel agent fees.

Also, travelers prefer to have more control over booking choices.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Why did you choose to book online? (check all that apply)

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Question #4

The results show that most of the survey’s population traveled for pleasure and not for

business.

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

Business

Pleasure

What was the primary purpose of your last trip?

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Question #5

This chart shows that more than half of the population traveled only once or twice during the

year preceding the survey. It is interesting to note that almost 20 percent of the population did

however travel over five times.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

1

2

3

4

5+

How many times within the last year did you travel by air or on a cruise?

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Question #6

This chart reveals the money spent by travelers among the population on travel services,

lodging and entertainment during their trips. Most of the travelers spent less than $3,000.

<$1,000 35%

$1,001 – $2,000 28%

$2,001 - $3,000 16%

$3,001 - $4,000 9%

$4,001 – $5,000 4%

$5,001 - $6,000 2%

$6,001 + 6%

APPROXIMATELY, WHAT WAS THE TOTAL SPENT ON YOUR LAST TRIP? (INCLUDES TICKETS, LODGING,

OTHER TRANSPORTATION, ENTERTAINMENT, ETC.)

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Question #7

Results demonstrated by this chart show that about 96% of the population suffered little to no

stress during booking of trips.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

No Stress Some Stress Stressed Very Stressed

What was your stress level while booking your last trip?

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Question #8

The results show that most of the travelers did not spend more than a couple of hours booking a

trip.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Less than 1 Hour 1-2 Hours 2-3 Hours Over 3 Hours

How much time did you spend booking your last trip?

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Question #9

The results have indicated that almost all the travelers were satisfied through the previous

booking experiences.

Yes 96%

No 4%

WERE YOU SATISFIED WITH THE BOOKING OF YOUR LAST TRIP?

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Question #10

Top five common responses:

1. It was easy to use

2. Able to control all aspects of trip

3. Booked trip for cheap price

4. Convenient to use online services

5. Did not take a lot of time

Top five quotes from responses:

1. “Easy, cheap, convenient, comparable and efficient.”

2. “It was simple and easy to do from the convenience of my own home. I was able to keep

searching until I came up with a price that I liked. We felt we got the best deal we could.

We were able to explore our options as far as airlines and prices and felt in control of our

trip.”

3. “I am very busy. The time that I had available to book the trip was very late at night. No

travel agencies are open at that time. I could then print everything off at my

convenience.”

4. “Used the same site as I have in the past. They have all my personal data store and flight

preference as well as billing information. After picking out a flight that fits my time, it

literally takes less than a minute to complete the required info.”

5. “We were in charge of the choices we made. We saved money compared to what was

quoted at the travel agent.”

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Question #11

Top Responses

1. More flight options

2. Elimination of variable pricing between the various agencies that are booking for the

same flight on the same airlines

3. No false advertising

4. Cheaper ticket prices

5. Less fees after booking

6. Show other dates/prices

7. More available dates for planning

8. Easier to use

9. More tools to compare the flight cost on different days

10. Calendar with prices for every booking site

11. Cancel and fix errors online

12. Being able to see if price was expected to go down or not

13. Have pop up videos and written steps on how to make the arrangements needed

throughout the booking process

14. Accurate ticket availability display

15. More reviews

16. Send flight change updates

17. Save search history

18. Easier to speak over phone

19. Notify if price drop

20. Being able to use reward miles

21. Descriptive baggage fee prices

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Question #12

This chart shows that only about 20% of travelers intend to use a travel agency for the next

booking. It also shows that about 30% of travelers are open to the idea of travel agents.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Yes No Uncertain

Would you consider using a travel agency instead of booking online for your next trip?

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Question #13


1. If the price is reasonable/comparable to online sites

2. If it was very easier

3. If there was little to no service fee

4. If there was a complex trip to coordinate

5. If the destination was new to the traveler


1. “I might use an agency if I thought I would get better prices on flights and hotels.”

2. “I have in the past. It is very easy - tell them what you want and they book it all. Just

more expensive.”

3. “It’s about the price. If they can find excellent flights and maybe have the ability to use

purchasing power, I would definitely use them. I would not use them for the same price

plus fees for the same flights.”

4. “For overseas travel to countries (especially those that are not commonly frequented by

tourists) I think it’s good to have one person you can connect with if there are issues;

otherwise, it’s not worth the cost.”

5. “If it was for pleasure, and had multiple components. For one trip this year I did and it

went well. They helped with the actual on-site activities; I still booked the air online

myself.”

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Question #14

The survey data reveals that most of the participants were females.

Male (29.4%)

Female (70.6%)

WHAT IS YOUR GENDER?

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Question #15

The survey data shows that almost 60% of the survey participants are 34 years of age or

younger. The largest single age group was that between 25 and 34 years old. This age group is

defined as Generation Y.

25.7%

34.0%

15.3% 14.4%

10.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

18-24 25-34 35-44 45-54 55+

What is your age?

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Question #16

About 74% of the participants were either dating or married.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Single Dating Married Widowed

What is your relationship status?

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Question #17

This chart helps to understand the demographics of the respondents in a stronger way. Since

the vast majority of the respondents were Concordia University’s staff and students; the

majority of respondents were in education positions or in training.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

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What is your profession?

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Question #18

This graph illustrates the household incomes of the survey takers. Most of the survey

population earns less than a $150,000 annually. The largest bracket includes participants that

make less than $50,000 every year.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

What is approximately your annual household income?

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Question #19

This chart shows that 62% of the survey population does not have any children.

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Not Applicable

1

2

3

4

5+

Please check the amount of children you have.

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Travel Agency Users

Question #3

Out of the different reasons that drove some participants to use travel agents; convenience was

the strongest reason with about 47% of the responses.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

Easy to use

Convenient

Travel agency service provided by employer

Cost effective

Less time to accomplish

It was recommended

More control over outcome

Why did you choose to book through a travel agency? (check all that apply)

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Question #4

This pie chart shows that the majority of the travel agency customers surveyed were traveling

for pleasure.

Business 29%

Pleasure 71%

WHAT WAS THE PRIMARY PURPOSE OF YOUR LAST TRIP?

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Question #5

About 94% of participants that used travel agencies are not frequent travelers.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

1 2 3 4 5+

How many times within the last year did you travel by air or on a cruise?

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Question #6

When the results in this chart are compared to the corresponding spending chart of online site

bookers; the data shows that travel agency customers spend more on travel then online travel

site customers. While only 37% of Internet booking participants spent more than $2,000 on their

last trip; 74% of those who preferred travel agency booking exceeded that amount.

<$1,000 16%

$1,001 – $2,000 10%

$2,001 - $3,000 33%

$3,001 - $4,000 19%

$4,001 – $5,000 4%

$5,001 - $6,000 2%

$6,001 + 16%

APPROXIMATELY, WHAT WAS THE TOTAL SPENT ON YOUR LAST TRIP? (INCLUDES TICKETS,

LODGING, OTHER TRANSPORTATION, ENTERTAINMENT, ETC.)

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Question #7

The results presented in this chart show that the stress levels are similar for both methods of

booking. Both online site and travel agency customers do not suffer high stress levels while

making travel arrangements.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

No Stress Some Stress Stressed Very Stressed

What was your stress level while booking your last trip?

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Question #8

Travelers spend less time booking trips through Internet websites than those who book through

travel agencies. 49% of online booking site customers spend less than an hour booking trips as

compared to 33% of participants spending the same time using travel agency booking services.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Less than 1 Hour 1-2 Hours 2-3 Hours Over 3 Hours

How much time did you spend booking your last trip?

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Question #9

This chart indicates that 92% of participants using travel agencies are satisfied with the booking

of the last trip. That percentage was 96% for Internet booking customers. Although both results

indicate high levels of satisfaction; Internet booking was slightly better.

92%

8%

WERE YOU SATISFIED WITH THE BOOKING OF YOUR LAST TRIP?

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Question #10


1. Everything went as planned

2. Easy and convenient

3. Agency was very knowledgeable

4. Didn’t have to worry

5. It was booked through employer


1. “No surprises, everything was well explained and documented, was able to book the trip we

wanted without having to do all the research and tracking of process on our own. This agency

guaranteed a reduction in the price if a promotion came up from the cruise line prior to

departure, and when we received a sale flyer, we contacted the and received an immediate

refund of $300.”

2. “Made all the arrangements for us and had connections on finding a travel guide for us.

Didn't have to worry about making any arrangements.”

3. “The travel agency never updated their apple book. So we were flying to Cozumel, Mexico

and our resort went from a 5 star to a 2 star and the agency never mentioned it to us. It went

under new ownership.”

4. “Transportation to and from the airport was set up, so we did not have to worry about setting

it up once there.”

5. “Information provided by travel agent was excellent, accurate, and effective.”

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Question #11


1. Less waiting

2. More details about the trip

3. More personal contact

4. More services

5. Listening more to customer wants


1. “They should be well informed on the changes for the resorts and hotels. They should listen

to what each customer wants.”

2. “Slow with communication to actually book a flight and the price went up about $500 a day

later after we had wanted to book.”

3. “We had a great experience overall, more advice on when and how to get through the airport

would have been helpful.”

4. “Promote companies and services. I don't know of any travel agencies that offer trips to

individuals. I only know of large group travels.”

5. “Make sure wait times are low (or offer a call-back feature so you're not on hold for a long

period of time).”

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Question #12

More than 55% of travel agency customers would consider using online services for their next

booking. It should be noted that 10% of this population would not consider using an online site

for the next trip.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Yes No Uncertain

Would you consider using an online site instead of booking through a travel agent for

your next trip?

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Question #13


1. If I wasn’t booking for a large group

2. If it was cheaper

3. If desired travel was in the U.S for the next trip

4. Would like to have more control

5. If it would be more convenient


1. “We only used a travel agency because it was our honeymoon and we wanted the least

amount of stress as possible. In the past we have used online sites and been satisfied.”

2. “If it is easy to get around in the site and my questions are answered, I would have no

problem online.”

3. “Personal. Yes. Business, No.”

4. “If not international, I don't need travel agent help.”

5. “Depends on the deals offered.”

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Question #14

The percentage of male to female online booking participants is very similar to that of travel

agency customers. 75% of the travelers that preferred travel agencies to online booking were

female.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Male Female

What is your gender?

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Question #15

35% of the participants that prefer travel agencies are between 18 and 24 years old. This age

group is defined as Generation Y.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

18-24 25-34 35-44 45-54 55+

What is your age?

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Question #16

This chart shows that the percentage of people dating is higher by approximately eight percent

for survey respondents preferring travel agencies that it is for those who prefer online booking.

On the other hand; the percentage of married people that prefer Internet booking is higher by

about five percent than it is for those who prefer travel agencies.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Single Dating Married Widowed

What is your relationship status?

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Question #17

The data in this chart indicates that the decisions of customers on whether to use Internet or

travel agency booking were not significantly affected by the participant’s occupation. A notable

difference though; is that while the percentage of people with jobs in education was 35% for

travel agency bookings, that percentage was 43% for Internet bookings.

0.0%

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10.0%

15.0%

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35.0%

40.0%

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What is your profession?

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Question #18

This chart shows that the household incomes of travel agency customers exceed those of

Internet booking customers. In the group preferring travel agencies; 35% of the households

made less than $50,000 annually while that percentage was 31%. On the other hand; 27% of the

travel agency households made between 75 and a 100 thousand dollars annually while that

percentage was 15% for Internet booking websites.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

< $

50

,00

0

$5

0,0

01

-$7

5,0

00

$7

5,0

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-$1

00

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$1

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,00

1-$

15

0,0

00

>$

15

0,0

00

What is approximately your annual household income?

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Question #19

58.3% of the group that booked at travel agencies did not have children while that percentage

was 61.8% for participants that preferred to book over the Internet.

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Not Applicable

1

2

3

4+

Do you have any children? If so, how many?

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B) Interviews

To gain a better understanding of the travel industry, nine interviews were conducted with

travel agents in Minnesota and Illinois in order to learn more about the agency clientele, the

agency perspective on the current business model in comparison to the past model where

online sites were not prevalent, and the agency feedback that has been received from past and

current customers. The following are summaries of the results from all nine interviews.

Which type of transaction is the most common service performed at your agency? Group

travel, multiple city travel destinations, cruise ships with air travel etc.?

Many agencies offer both business and leisure travel services with separate departments that

specialize in each service. The business department of the agencies assists only business

transactions and business clients. Leisure departments have a high frequency of groups and

destination weddings as well as families and packages. Therefore, leisure departments have a

larger variety of transactions.

What are the most common types of customers you have? Business travelers, families,

couples, males, females, younger, Baby Boomers?

Those interviewed in the business department saw mainly business clients. Those interviewed

in the leisure department saw a larger, more varied range of clients. The most common type of

clients found in the leisure department are groups and couples. Couples who are planning a

destination wedding tend to frequent travel agencies for booking and planning. Groups that

need a lot of coordinating also tend to be common customers at travel agencies. In regards to

gender, women are more commonly found at agencies as customers compared to men. Owner

of The Best Travel Agency in Moline, Illinois, Connie Van Tieghem says, “Even if the woman is

not signing the check, they’re the ones making all of the travel plans.”

Tell me about the amounts of time and money spent here on booking.

The business department has a very steady amount of business, with most planning and

transactions taking place on the phone and by email. According to Connie Van Tieghem,

“Travel is the third largest corporate expense for most companies.”

Many leisure departments find the dollar amount spent per booking averaged $3,000-$4,000.

The more elaborate the trip, the more time and money is spent at the agency. For a couple

(excluding destination weddings), about an hour is spent at the agency with a few follow up

phone calls and emails.

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What is the target market for your travel agency? Why is this market a good target for your

agency?

Most agents feel that all travelers can find value in travel agencies, regardless of age,

demographics, and income. The Best Travel Agency defined couples aged 40 or older with an

annual income of $80,000-$100,000 as a good target market due to a higher disposable income

and the desire to have an authentic travel experience without being too concerned with the

price.

What is the stress level of customers while they’re here?

Stress levels vary from person to person but clients at a travel agency typically “come in

stressed from booking online and stress decreases when here at the agency,” according to Nora

Blum, the certified travel specialist and marketing manager at Travel Leaders Maple Grove

office. Clients have the comfort of knowing that the main purpose of agents is to alleviate stress

and help with frustrating booking details.

Tell me about a time a customer really found value in your travel agency service.

Many customers who have had problems while traveling have found value and satisfaction in

the travel agency service. Corrections can immediately be made to any errors and emergencies

that occur to the traveler. Customers who book online do not have access to such a support

system.

Conversely, do you remember a time a customer expressed dissatisfaction and why?

Dissatisfaction usually occurs when customer expectations and reality are dissonant. Agents

attempt to bridge that gap by having knowledge and experience, but there will always be those

who cannot be fully pleased. Beth Roth, manager of the leisure department at The Best Travel

Agency recalls, “One client blamed the agency because it rained.”

What are your views on online booking sites? What have customers said about them to you?

Have you used them?

In general, agents have a favorable opinion of booking sites for very short trips and emergency

situations with many agents also utilizing online booking sites for these purposes. Agents also

appreciate when clients have looked at sites before coming to the agency because those

customers are usually more specific with destination desires. However, agents are aware that

online booking sites do not give the final price of the trip until the very end of the transaction

and often neglect to mention transfers and transfer fees. Online booking sites do not offer much

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customer support and there can be an overwhelming amount of clutter, causing confusion and

stress to the customer. With travel agencies, there is more security that the client will get what

was paid for and the option for more deals and discounts. Ultimately, online booking sites are

viewed as a price comparison tool.

How was the travel agency business model affected with the rise of online booking sites?

With the rise of online booking sites, many small agencies have consolidated or shut down.

Many more agents have also opted to work from home, meaning there are fewer storefronts.

This does allow agents more time to work on larger and more complex groups. However, many

clients have a do-it-yourself attitude and according to Sheree Powers, owner of Travel by

Nelson Ltd., “Travel agencies now have to win over the customer and prove the agency can

greatly assist them with their travel needs.”

What are some of the challenges of competing with online booking sites?

With online booking sites, travelers have the opportunity to research flights and destinations

almost instantaneously. Prices and times can be browsed at the leisure of the client, no

appointment necessary. Customers compare prices on online booking sites and also compare

prices to travel agencies. Most clients are not aware that travel agencies offer price matching to

online booking sites, which makes competing with online booking sites difficult.

How can Travel Agencies improve their business model to gain more clients?

Specialization was mentioned by two different agencies as a method to improve the agency

business model. If agents in the leisure department specialize in a specific area, such as

destination weddings or European travel, agents will be able to provide expertise and efficiency

for clients. Agents also felt that finding ways to reach target markets as well as communicating

agency benefits effectively will improve the business model. The younger generations seem to

be difficult for agencies to reach.

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C) Secondary Research

Upon analysis of question #15 regarding the age of the respondents, it became apparent that

further research must be conducted to better understand how to reach each age cohort through

marketing strategies and tactics. The most predominant age groups were travelers aged 25-34.

However it can be noted that there was a wide range of ages represented in the survey. With

this in mind, identifying and understanding the target market is a crucial decision in

advertising and promoting service generated businesses. Advertisers commonly define a target

audience based on several criteria including demographics and psychographic characteristics,

which includes lifestyles, attitudes and behaviors (Hawkins & Mothersbaugh, 2013).

Each generation has unique expectations, experiences, generational history, lifestyles, values,

demographics, and psychographics that influence purchasing behaviors. Accordingly, many

companies are reaching out to each age cohort in attempts to understand and gain the attention

of these diverse buyers. Multi-generational marketing is the practice of appealing to the unique

needs and behaviors of individuals within more than one specific age cohort or generational

group, with a generation being a group of individuals born and living at about the same time.

This means that marketers for the travel agency industry would need to understand three U.S.

generations: Baby Boomers, Generation X, and Generation Y.

Marketing to these specific generations requires an understanding and strategy appropriate to

each generation’s behaviors and characteristics, focusing primarily on how to communicate the

benefits and values of using a travel agency. The following recommendations for Baby Boomers

would be to focus on building value, being flexible, and producing options with the travel

agency. If Baby Boomers feel they are getting superior service at a good value, price sensitivity

decreases for this age group. A major concern for Baby Boomers is health due to ageing;

however it is imperative to note that Baby Boomers do not like to be reminded of this fact.

Marketing and interactions with this generation need to replace words including senior citizens,

golden years, retirees, and age related phrases such as “Prime time of Life” with less sensitive

options. Travel agents should market to Baby Boomers with travel adventure packages, music,

or vineyard based travel as their focus is indicating the “Me Generation,” entitling this

generation to the good life (Hawkins & Mothersbaugh, 2013).

Some marketing considerations for Generation X would be to enhance the attitude and lifestyle

characteristics that greatly influence this age cohort. This includes balancing a family, work, and

a personal life. Generation X members work to live, not live to work, compared to the Baby

Boomer friends before them. Generation X is a practical and price conscious generation that

wants to know the features of a product or service and why that specific feature is necessary.

Travel agencies must know that this generation responds to honesty, candor, and

straightforward facts. Information overload and accessibility is needed to educate this group

into buying. Generation X responds to the recommendations of peers, word of mouth reviews,

and social gatherings (Hawkins & Mothersbaugh, 2013.)

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Marketers aiming for Generation Y need to first know that this generation is self-reliant and

self-absorbed with a very strong sense of autonomy and independence (Hawkins &

Mothersbaugh, 2013.) This group is wise and well grounded, and was born into an advanced

technological, wireless, and electronic society. Generation Y has significant respect for ethnic

and cultural diversity and a heightened social awareness. In order to succeed in marketing to

Generation Y, a plan is needed to attract this group at an early stage and gain its loyalty to the

travel agency industry. Generation Y is strongly attracted to the experience which makes for a

perfect fit to this industry. Marketing campaigns need to focus on uniqueness, honesty, humor,

and information with ethnic and cultural diversity imploring an image driven message.

Generation Y responds well to e-mail, voice-mail, the Internet, multi-media, direct mail

catalogs, magazines, college and high school newspapers, websites, school-based media boards,

college guides, and sponsored on- and off-campus events (Hawkins & Mothersbaugh, 2013.)

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Recommendations

The business objective identified as well as the recommendations given for travel agencies,

primarily deal with multi-generational marketing techniques.

However, convenience sampling and descriptive data collection identified three major

generations that are currently using travel agencies, Baby Boomers, Generation X, and

Generation Y. The marketing strategy for travel agencies would be to learn the different

characteristics and behavior patterns of each generation. With this in mind, three

recommendations were developed to improve the business model of travel agencies.

1. Reposition the perception of travel agencies in the eyes of customers. Repositioning can occur

by:

Travel Agencies need to sell the experience. This is done by through the emphasis that

the travel agent is working for the client, the client’s family, and working for the clients

personal best interests

A Marketing Promotional Campaign can emphasize that travel agents are experienced

and specialize in all facets of leisure and business travel, including air, hotel, cruise, and

wedding destinations

Travel agents also specialize in the locations and destinations for personal, business and

family entertainment

Travel agents can help during the transaction with travel problems and after arrival to

hotel locations versus online booking

Client reviews help drive business, need to implement a plan to have customers submit

reviews of trips to encourage use of travel agency versus online booking

Price match guarantee

Be transparent with all possible and additional fees

2. Research and market to each age cohort based on the unique characteristics of the generation

by:

Referral based recommendations, word of mouth marketing plan to enhance business

Social media promotion, Skype promotion, ‘live chat’ computer transactions

Extended agency hours, 24-hour emergency contact for leisure travelers

Travel agency service with open computers with agents versus a closed system to

customers

Target each age cohort individually

3. Develop a strong relationship with clients through the implementation of technology in order

to eliminate concerns with time and convenience. This could be done by the following scenario:

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In addition to reaching different age cohorts through different mediums, there are also

programs that agencies can develop and implement in order to increase and retain the number

of clients.

For instance, many travelers site the reasoning for not using travel agencies due to the

accessibility to information online and the preference to exercise control over price comparison

and outcomes. One way to fulfill this customer desire would be to invest in a software

application that allows an individual to create a travel package, similar to the way consumers

are able to build a customizable vehicle through Subaru or Chevrolet. Just as a customer can

select vehicle make, model, and color, the application would allow clients to have the control to

explore travel options while adhering to a specific budget, destination, and time frame from the

comfort of home. Limitations would arise when an option that a client desires is not available or

when confusion is experienced by the client. For example, if a customer desires to travel to

Panama yet that destination is not listed, the customer will immediately look elsewhere.

Similarly, if a customer becomes confused with the process, it is more than likely the customer

will give up or look elsewhere. In order to remedy these limitations, a live-chat option with a

travel agent could be put into effect. Having a live-chat option would allow travel agents to

help solve client questions and concerns as incurred. Live-chat would also help build

relationships with customers without the stress of finding a time to meet at the brick and mortar

agency.

By properly marketing to the Baby Boomer, X, and Y Generations and utilizing software

applications, travel agencies can shift customer perception and develop solid relationships with

clients, which are paramount to the success of the travel agency industry.

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Conclusion

The objective of this study was to research the viability of the current travel agency model in

comparison to the growing amount of online travel booking sites and what travel agencies can

improve to compete with these sites. To achieve this, a survey was developed and sent to

Concordia St. Paul students, faculty and staff members, as well as extended friends and family

of the researchers. Interviews were then conducted with travel agents, travel agency users and

online travel site users to further learn the psychographics involved with booking a business or

leisure trip. After analyzing these results, the conclusion was made that travel agencies can

improve the current business model by altering the current marketing strategy. This can be

accomplished by properly addressing each age cohort with specific advertisements tailored to

the characteristics of each generation. Also, a stronger relationship with clientele can be

achieved through the implementation of technology to make the travel planning process more

convenient. Finally, the perception of travel agencies must be repositioned in the mind of the

consumer to eliminate misconceptions of the available services, prices and fees. Through the

aforementioned recommendations, travel agencies have the potential to expand and improve

the current business model, therefore increasing business, and enhancing customer

relationships.

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References

Competitive Intelligence. (2014). expedia.com Site Overview. Retrieved October 22, 2014, from

http://www.alexa.com/siteinfo/expedia.com

Competitive Intelligence. (2014). kayak.com Site Overview. Retrieved October 23, 2014, from

http://www.alexa.com/siteinfo/kayak.com

Hawkins, D., & Mothersbaugh, D. (2013). Consumer behavior: Building marketing strategy (12th

ed.). New York: McGraw-Hill Irwin.

Kennerly, B. (2014, January 14). Travel agents back in demand. Retrieved October 23, 2014, from

http://www.usatoday.com/story/travel/2014/01/14/travel-agent-booking/4474853/

Top 15 Most Popular Travel Websites | October 2014. (n.d.). Top 15 Most Popular Travel Websites

| October 2014. Retrieved October 23, 2014, from

http://www.ebizmba.com/articles/travel-websites

Travel Agents. (2014, April 1). Retrieved November 6, 2014, from

http://www.bls.gov/oes/current/oes413041.htm

Travel Agents. (2010, July 1). Retrieved November 9, 2014, from

http://www.bls.gov/spotlight/2010/travel/

Travel Agents: Occupational Outlook. (2014, January 8). Retrieved November 3, 2014, from

http://www.bls.gov/ooh/sales/travel-agents.htm

Weber, R. (1970, January 1). The travel agent is dying, but it's not yet dead. CNN. Retrieved

October 21, 2014, from http://www.cnn.com/2013/10/03/travel/travel-agent-survival/

http://www.alexa.com/siteinfo/expedia.com

http://www.alexa.com/siteinfo/kayak.com

http://www.ebizmba.com/articles/travel-websites

http://www.bls.gov/ooh/sales/travel-agents.htm

http://www.cnn.com/2013/10/03/travel/travel-agent-survival/

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Appendix

Appendix A) Online Survey

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Appendix B) Interview Questions for Travel Agents

1. Which type of transaction is the most common service performed at your agency? eg. Group

travel, multiple city travel destinations, cruise ships with air travel etc.?

2. What are the most common types of customers you have? Business travelers, families,

couples, males, females, younger, Baby Boomers?

3. Tell me about the amounts of time and money spent here on booking.

4. What is the target market for your travel agency? Why is this market a good target for your

agency?

5. What is the stress level of customers while they’re here?

6. Tell me about a time a customer really found value in your travel agency service.

7. Conversely, do you remember a time a customer expressed dissatisfaction and why?

8. What are your views on online booking sites? What have customers said about them to you?

Have you used them?

9. How was the travel agency business model affected with the rise of online booking sites?

10. What are some of the challenges of competing with online booking sites?

11. How can Travel Agencies improve their business model to gain more clients?

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Appendix C) Real Tourism Output: U.S. Bureau of Economic Analysis

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Appendix D) Travel Leader’s Price Guide

All professional fees are listed per person unless otherwise noted. Please ask your travel consultant about specific fees for your upcoming trip. Airline Tickets Domestic $30.00 International $50.00 Void/Refund/Exchange $30.00 Frequent Flyer/Points/Rewards Starting from $40.00 Vacation Packages Airfare/Hotel or Airfare/Car rental $20.00 Touring or Guided (per room) $50.00 Cruise vacation (per stateroom) $50.00 Independent Travel (per booking) Hotel reservations $20.00 Rail reservations $20.00 Sightseeing or activities reservations $20.00 Car rental or transfers reservations $20.00 Domestic Multi destination trips Starting from $100.00 International Multi-destination trips

Depending on the number of destinations or length and complexity of trip

Starting from

$150.00

Other Services Travel Insurance $20.00 Accounting Record Research $30.00 Fed Ex Overnight Delivery Starting from $20.00 Visa services Not including consular entry fees or visa processing fees. Will depend on countries visited and urgency of request. Starting from $50.00

Documents

Travel Agencies vs Online Travel Sites