Why Travel Agencies Are Still Going Strong Despite Airlines Offering Cheap Air Tickets?
There were times when a clear distinction could be drawn between a travel agency
and an airline since the former offered complete travel packages and not just the cheap air tickets which the latter used to sell. As internet based commerce picked up, the airlines realized the scope of diversification and reduction of their dependence on the agencies for getting more customers. Since the facility of online booking of flights was provided right on the websites of the airlines, it became very easy for people to do flight booking on the airlines website directly, without going through the agency route.The demand of cheap air tickets from a large section of the population resulted in rethink about fat commissions which the airlines used to pay to the agents. This was more possible now than any time before since internet-based commerce reduced dependence on agencies for filling the seats of airplanes. The airlines were doing all that could be done to meet the aspirations of the people of low-cost travel by air and at the same time take the growth route. This had made many critics to begin imagining the end of the travel agencies. But, so far this has remained far from true. It is true that there has been an increase in competition since a number of players have entered the fray of online ticketing. Many of these have closed shop due to the same reason of more competition and less sustainable profitability.
However, some of the agencies are still going strong, contributing to flight booking on large scale. What makes these agencies keep growing and gaining strength?
Despite the advent of internet-based commerce, the airlines have not been able to generate fuller occupancy rates. Their physical reach in the different geographical markets has not been developed to the extent to which the travel agencies have been able to do. This offline reach is important distinction since the agencies have closer interaction with the people rather than the airlines which helps in developing their brand awareness among the masses. Closer reach also helps in generating goodwill and credibility since the people can approach these with their queries and complaints with ease. This is a key point where the agencies score over the airlines since once the people get in direct touch, it gives more confidence to people in interacting with the agency and take its services. Big agencies are able to establish their foothold at multiple locations and this helps in increasing their reach.
Therefore, even if the airlines drive optimal levels of bookings on their sites, the reach of travel agencies always gives them more markets to explore and business to grow. So, the agencies fuel the growth of airlines in new market where cheap air tickets are sought by passengers.
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