As we put away the party hats and turn our focus back to work, Travel Agent is ringing in the new year with a look at trends to expect in 2007.
According to the American Express Business Travel forecast,
the costs of airfare, hotels and rental cars will increase this year by between
2 and 8 percent. But airfare to the
It is expected that more people will book online than
offline for the first time this year, but a Travel Industry Association (TIA)
spokesperson says that agents who focus on the personal touch have nothing to
worry about. Cruising remains robust, except for the Caribbean; however, a
Online Travel Bookings to Surpass Offline Bookings
Allen Kay, spokesperson for the TIA, says travel agents should not be worried about a recent PhoCusWright, Inc. study that projected online travel bookings will surpass offline bookings for the first time in 2007.
Kay says the news is not surprising for any agent who has been tracking the progress of online travel bookings, noting that TIA has made several similar projections recently.
"Travel agents have already discovered that there has been a shift in business. But you still have larger companies that do great business; they are leaving large firms and opening shop in small towns, catering personally to local clientele and demonstrating that they have experience and that they will continue to be a successful," Kay says. "The travel agents who know their business and know their customer—offer personalized customer service—will still have a place in the industry come '07, '08 and beyond."
The report, PhoCusWright's U.S. Online Travel Overview, now in its sixth edition, analyzes the domestic leisure/unmanaged business online travel market by segment, channel and major players, projecting trends through 2008. Caribbean Pricing Down For Carnival and Royal Caribbean
After years of suppliers (e.g., airlines and hotels) outperforming online travel agencies (e.g., Expedia and Orbitz), growth rates for both channels will converge by 2008. Suppliers have enjoyed an advantage over online travel agencies due to the relatively inexpensive task of acquiring online customers from their own offline channels. This advantage, however, is disappearing, the study shows.
"It's our observation that the trend is basically that consumers are continuing to embrace online business," says Michael Cannizzaro, PhoCusWright's director of information services. "Shopping and buying online is becoming universal. They (consumers) will continue to want to transact online."
The survey notes the growth of dynamic packaging—the ability for consumers to easily combine airline, hotel, rental car and other product purchases online—is projected to slow significantly from 51 percent growth in 2005 to 18 percent in 2008.
Also, hotels will be the fastest-growing segment online,
surpassing air travel, which until 2006 had long been the fastest-growing
product segment. According to the finding, "The advanced level of the
Many of these innovations include the new online capabilities that PhoCusWright has termed "Travel 2.0," the travel industry's application of Web 2.0 practices empowering the online consumer.
Kay, however, encourages agents to focus on local clientele, develop more personal relationships with clients and on niche markets—all ways to encourage travelers to book with an agent as opposed to online.
"We have researched this and we came up with a similar forecast so we are not surprised by this study," Kay says.
"There are some extremely popular online offerings and incredibly competitive deals. But this is still a great time for travel agents. People will shop and buy more online, but there is still a contingent of people who feel more familiar dealing with travel agents."
Cruises: Solid 2007 Except for Caribbean
Pessimism over a soft
Carnival Corp. said that it understands that travel agents
are more reluctant to sell shorter
While the overriding sentiment concerning the Caribbean
isn't favorable, cruising elsewhere, such as in
Yet, the question remains as to why
All-Inclusives: Caribbean Resorts Looking Good
Going into 2007, it appeared as though cruise companies with
"We're looking at a very positive 2007," says Matt Mullen, senior director of sales, AMResorts. "Our advance bookings are up 15 to 18 percent for the first and second quarters of 2007 over last year."
Mullen explains that part of this success lies with AMResort's
promotional push in anticipation of fallout from the Western Hemisphere Travel
Initiative, which will affect travel from the
In addition to the passport initiative, AMResorts was
dealing with the aftermath of the 2005 hurricane season, most notably
hurricanes Wilma and Katrina. "Two thousand six was a question mark in our
minds," he says. "The hurricanes had their effect on people, and we
really didn't know how that would impact bookings. The Mexican government did a
great job in restoring
According to Mullen, AMResorts' all-inclusive properties are
booked at 90 percent occupancy for January, and the company is forecasting 90
percent into the year, except for shoulder seasons after Easter. "Punta
Cana and the Riviera Maya are stapled into the travel agents' minds as offering
great value for their clients, as well as what they bring in the way of
commissions on the all-inclusive package," says Mullen. "We rely
heavily on lift, and it's excellent into all our locations, including Los Cabos
"We find that the booking window has been shortened going into 2007," says John Lynch, executive vice president of sales worldwide for Unique Vacations, worldwide representatives for Sandals and Beaches Resorts. "This can create confusion regarding projections into the next two quarters, although there is no significant downturn." Lynch acknowledges an increase in competition in the all-inclusive category. "But at Sandals and Beaches we feel a comfort level about our position in the all-inclusive market."
"I hate to be optimistic, but bookings are going very
well," says Paula Hayes, senior vice president of sales, Club Med North
America. "Our re-opened
Hayes describes Club Med as being something of a niche
product, having the only all-inclusive in the
Airlines Cool Consolidation Talks
In December, a flurry of merger and acquisition talks blew through the airline industry, giving rise to the potential for industry-wide consolidation between such carriers as Delta Air Lines and US Airways, as well as Midwest Airlines and AirTran Airways. Rounding out the M&A discussions is speculation of merger talks between Continental Airlines and United Airlines. So far, not one consolidated carrier has materialized.
United Airlines Corp. and Continental Airlines have yet to publicly disclose any details of their discussions. The first papers to report the potential consolidation—The New York Times and The Wall Street Journal—said specifics of the talks were not given and both papers cautioned about the uncertainty of the deal. However, the paring could be blocked by Northwest Airlines, due to a 2000 pact between Continental and Northwest that gave Northwest a "golden share" of Continental in exchange for Continental buying back some of its stock Northwest held. Northwest's stake in Continental gives the carrier the power to block any potential acquisition. Calyon Securities airline analyst Ray Neidl in a research note said a merger between Continental and United would have to satisfy "a series of operational issues as well as antitrust concerns"—the latter being a reason cited by Delta in its decline of US Airways' offer, which kicked off the merger mania in mid- November.
Delta Chief Executive Officer Gerald Grinstein said from the beginning that he was firmly against the $8.5 billion takeover bid, believing it would be difficult for a combined company to overcome internal and regulatory hurdles. On December 19, 2006, Delta formally rejected US Airway's offer, countering it with a reorganization plan to emerge from bankruptcy by the spring of 2007.
"We concluded that your proposal is structurally flawed," Grinstein that day wrote in a letter to US Airways CEO Doug Parker. "It represents an unacceptably high risk of not achieving antitrust clearance because it would harm consumers and communities due to is substantial anticompetitive effects."
Midwest Remains Independent
Meanwhile, on December 13, AirTran Holdings offered to buy
Denver's Snow Troubles
Last Friday's forecasts called for more snowfall in
"Travel agents do have the ability to make changes to plans without any associated fees," says Robin Urbanski, a spokeswoman for United, noting that the waiver is loaded in the Apollo GDS.
Passengers traveling to, from or through
For passengers who began travel after December 28, both Frontier and United made allowances for one change to travel plans without a change fee or advance purchase requirement, so long as travel is completed by January 11, 2007. Beyond that date, additional fares may apply. A rescheduled or new itinerary may be open to higher fares if it does not meet the original rules and restrictions.
Passengers forced to leave luggage behind when stranded in
"Make sure bags are identified on the outside and the
inside," advises David Castelveter, a spokesperson for the Air Transport
Association. "Advise clients to put a copy of their itinerary inside, so
the airline knows where they're going and how to reach them," he says. —Jennifer