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"Online is no longer always the least expensive alternative"


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#1 TammyWright

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Posted 06 November 2007 - 12:48 AM

source: eyefortravel.com - Travel Distribution News, Events and Analysis

Quote:
"Online is no longer always the least expensive alternative"

Business travel itineraries booked on public Internet sites such as Orbitz, Expedia, Travelocity, and the airlines' direct sites have been found to average $75 more per itinerary than those booked by a corporate travel agency, according to a study conducted by Topaz International. - (10/31/2007)

The independent research firm serving the corporate travel industry has provided comparative studies since 2001, and in each year, found that agency fares were equal to or lower than those offered through online sites in over 91% of itineraries.

"The five years of comparative airline purchasing patterns indicates that the online alternatives are not always cheaper, but in fact have been higher over the past few years," said Bradley Seitz, President and CEO of Topaz International.

According to an official release, there are two primary drivers in the purchase of business travel today: price and service. And, in both differentials, corporations that use a travel management company are coming out on top.

"The model of the airlines in recent years has been to encourage travelers to go online to book directly on the airlines' websites. This circumvents the travel agent, who has always served as an advocate for the consumer, keeping their best interests in mind. The problem is that while web fares initially created the perception of low cost, suppliers are now maximising their yields by driving up prices. The result? Online is no longer always the least expensive alternative. Travel agents, on the other hand, have the ability to search online fares and traditional GDS [Global Distribution System] fares, and pass along the best possible deals to their clients," said Don Raad, Owner of MSW LI, a Long Island-based boutique travel agency that generates $20 million in annual travel sales, and a member of the TRAVELSAVERS international marketing organisation.

The issue of service fees must also be considered. "Most online sites charge a whole litany of service fees, for uploading supplier discount contracts, managing profile data systems, and monthly online management fees, just to name a few," said Azzam Hajyousif, President of Apollo Travel, an independent travel agency with annual sales of more than $30 million and offices in the US and Greece. "A corporate travel agency typically only charges $15-20 per airline ticket."

But, according to Hajyousif, the greatest value in using a travel management company, from a pricing perspective, lies in the fact that an agent constantly analyses travel expenditures on their clients' behalf and uses their personal relationships with suppliers to negotiate the lowest fare options, which are generally not available to the public.

"Taking this operational model one step further," he said, "when an agency is part of a global organization, like TRAVELSAVERS, where we engage in account-sharing practices with other agency members around the world, the benefits to corporations increase exponentially. For instance, when a multi-national client has travel requirements in the US, Mexico, Germany and Asia, we have experts on the ground in those regions who have access to the lowest fares, and who can provide local intelligence and highly personalised service."

A.J. Rick Mazza, President and CEO, TRAVELSAVERS, a global marketing organisation for independent travel agencies, summed up the latest round in the online-versus-agency debate: "Disillusioned with the Internet, both business and leisure travelers are now eagerly returning to their travel agents. On the positive side, technology has opened up so many extraordinary possibilities in our world, but we also need to be careful about its dehumanising efforts. We advocate for corporations to take advantage of the best of both worlds…work with an experienced travel agent who uses today's technology to assess and manage your travel expenditures. And, keep in mind that in our hyper-speed digital society, relationship-building is still a key element of any business transaction. Travel has always been a personal business, and always will be. Corporate travelers need the high-touch factor that a dedicated travel agent provides."

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#2 MsShelley

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    Posted 06 November 2007 - 08:49 AM

    that's good information, thanks Tammy!

    #3 edna

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      Posted 07 November 2007 - 12:45 AM

      Very interesting Tammy!!! Thank you

      #4 JennyK

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        Posted 28 December 2007 - 11:04 PM

        My travel agent tried telling me that but when she quoted some places for me, I went onto Expedia and it was still cheaper lol

        #5 TammyWright

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        Posted 28 December 2007 - 11:13 PM

        Quote:
        Originally Posted by xJuicyJx
        My travel agent tried telling me that but when she quoted some places for me, I went onto Expedia and it was still cheaper lol
        what was she quoting you for? i just priced a package to the paradisus in punta cana and it was almost $400 less than expedia.

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        #6 JenniferSS

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          Posted 28 December 2007 - 11:20 PM

          I've had clients tell me that also- that Expedia, Orbitz Travelocity ect were cheaper- each time when we sat down and did the actual comparison the difference was that we weren't comparing apples to apples.

          Often times the flights were different. Some with bad connections- please keep in mind just because the connect is sold and considered a "legal" connection it still may be impossible to actually make it! Or the itinerary had them traveling all day- 12 plus hours instead of the 4 or 5 hours it normally would take. Or, the price didn't include transfers (these can add alot to the final package)!

          The other biggie to look out for is if the final price included all taxes and fees.

          The only time that I can not at the least match an internet price is the cheap hotel ( 2 star type) Vegas packages. Everything else I usually beat in price, at worst match it, add expertise and experience to, and the relationships that I've nurtured with the hotel management. Most importantly my clients have an advocate to call if anything goes wrong while they are traveling. A quick phone call to me and they are back on the beach enjoying their pina coladas while I get the problem solved!

          TA Jennifer

          #7 Sharonie

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            Posted 29 December 2007 - 01:35 AM

            I found the article to be very true today. We've been looking at the flights to Jamaica for our dates. Sidestep.com has returned some good fares, but most of them were with 2+ connections when I select a 1-stop one and it takes me to the actual site it will tell me the fare is no longer valid and the new price is like $80 more than what I saw. In addition, almost all the flights have overnight layover! I don't understand that, as there're many early flights from San Antonio/Austin to Houston. Anyway, Paul used his corporate booking site to look at the fares and there're better flights, more choices, and the prices are a lot cheaper. At least we have options so that makes me feel a little bit better about still not booking our flight that is 4 mos away.

            #8 TammyWright

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            Posted 29 December 2007 - 02:42 AM

            Quote:
            Originally Posted by MoWife
            Oh sorry TA Jennifer I just went back and reread your post and realized I pretty much just repeated what you said. I got so worked up when I read the article I didn't read through all the other posts.

            My favorite thing I had to deal with is when people would sit at my desk spilling their coffee all over and having their children run around the office while I priced packages for all over God's creation and then they ask me why should I book with a TA what's the difference if I book online? Well bozo, I just gave you all my time walking you through the pros and cons of three different destinations and 5 different resorts at each destination in about an hour. It would have taken you days to do that research on your own.
            i get that all the time...a person will want me to book their wedding, get rates, pick out their resort, find info on activities, weather, etc. then ask me what i do...

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            #9 starchild

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              Posted 29 December 2007 - 03:02 AM

              I have a TA question, do all TA's basically have access to the same rates/packages? Or do some TA's have relationships with different resorts/airlines that give them access to better rates?

              #10 TammyWright

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              Posted 29 December 2007 - 04:03 AM

              Quote:
              Originally Posted by starchild
              I have a TA question, do all TA's basically have access to the same rates/packages? Or do some TA's have relationships with different resorts/airlines that give them access to better rates?
              most use the same suppliers so our rates are pretty close...i have a couple of resorts that i have a good relationship with and send a ton of business so they give me a preferred rate.

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