2012 Consumer Trends

Over the years, travel agents have continued to prove their value

By Arnie Weissmann
Consumer Trends 2012For the past seven years, Travel Weekly partnered with companies conducting consumer research to bring you insightful data and commentary for our annual Consumer Trends issue.

While we have valued those research relationships, and while they have provided important intelligence to the industry, there were some questions we wanted answered that simply were not asked by our partners.

So this year, we decided to field our own survey.

Our research looks at a broad range of consumer booking and shopping behaviors (to read the Consumer Trends report, click here), but we were, in particular, very curious to see the responses to three specific lines of inquiry.

When we last ran our own proprietary survey, in 2004, we were able to determine that a) consumers who booked with travel agents took, on average, more trips per year than other consumers; b) trips that these consumers booked were, on average, longer than those booked through other channels, and c) on average, these agent-booking consumers spent more money per day than those using alternative booking methods.

Would all that still be true, we wondered, if we were to ask those questions in 2012? If these three factors -- more trips, longer trips, higher per-day spend -- remained characteristics of those who used agents, it would go a long way toward explaining why suppliers of travel products have continued to value and invest in agency distribution despite concerns that the channel's importance would diminish.

If agents were, in fact, the most effective channel to deliver consumers who had the potential to provide the strongest positive impact on suppliers' top and bottom lines, that was worth confirming and defining.

More, longer, bigger?

When our data came in, it indeed showed that consumers who had booked through a travel agent in the previous 12 months had also taken more trips, 4.51 vs. 3.67, than consumers who did not use an agent.

Likewise, the average length of individual trips in which an agent helped with booking is considerably longer than trips in which an agent was not involved -- in fact, about 50% longer (7.84 vs. 5.33 nights).

And the average amount spent per day for trips that involved an agent, $351, is nearly 50% greater than the $245 average spent per day for trips with no agent involvement.

However, the research also makes clear that not every consumer who uses a travel agent uses them exclusively.

The average annual spend on travel among those who say they've used an agent in the previous 12 months is $8,366, vs. $4,728 for those who did not use an agent. That's impressive, but shy of what the metrics above suggest would be the sum if all consumers who use travel agents booked all their travel through agents: $351 (amount spent per day) x 7.84 (length of trip) x 4.51 (number of trips) would roll up to $12,410.

That was one indication of channel-hopping, but there were others. One is what I call "booking gaps": There are consumers who report that they've used an agent and also report they took a tour, but then say that they did not use an agent to book their tour. Clearly, although some consumers had used an agent in the previous 12 months, they did not use an agent in every instance of booking.

The booking gap varies by travel product. For example, among those who said they used an agent and who also said they purchased an air ticket, there's an 18% differential: 70% of trips where an agent was involved with booking included air, but the agent actually handled the air booking for only 52% of the trips.

The gap is quite small with some products. It's only 2% between agent-users who booked a cruise and also said they booked a cruise with an agent. For all-inclusive resorts, the gap is just 3%, and for packaged tours, 4%. It jumps to 7% for resort hotels, 8% for escorted tours, 14% for car rentals and 19% for nonresort hotels.

And when we dig a little deeper, we find that one factor that correlates with agent bookings is the length of the trip. With the exception of nonresort hotels, all other components in trips of four days or longer in length were much more likely to be booked through an agency than they were for shorter trips.

There's also clear evidence that consumers are engaging in multiple short-duration trips vs. extended vacations. Two-thirds of leisure travelers took three or more trips in the past 12 months, and about half of those trips (49%) were for three nights or less.

In fact, it's likely that many of these trips of three days or less were driving vacations, since the data showed that air was booked for only two of every five trips.

And there's another probable reason that consumers book through agents for longer trips: The longer (and more expensive) the trip, the more is at risk if something goes wrong.

Looking for expertise

These booking patterns beg the question: Why do consumers who take more trips, longer trips and spend more per night use agents? What is it they're looking for that agents provide?

The answer might be found in questions the survey asked about why consumers chose various channels.

Travel agents lead the pack (by far) among booking options chosen by consumers who say they are primarily interested in "expert advice." For alternative channels, the results were practically nil.

The belief among consumers that travel agents are experts is strong. Three out of every four respondents who used a travel agent in the past 12 months considered their agent to be a specialist.

But it turns out there was one motivation for choosing a booking channel in which travel agents came in dead last. You guessed it: among those "looking for the lowest price."

Whether perception or reality, it's clearly a widely held belief among consumers that the lowest price is found outside the agency channel, with only 10% saying that's why they use an agent. For people who use online travel agencies, the number is three times higher.

Further afield

One startling difference among those who booked with agents and those who didn't was the amount of foreign travel by agency users. Among those using travel agents, 48% of their travel was abroad. Among those who didn't use agents, the amount was only 11%.

Travel agents were also likely to be involved in converting a business trip into a combined business and leisure trip. For those who didn't use agents, only one in eight leisure trips also included a business purpose. But when a travel agent is involved, the ratio is one in four.

Income vs. spending

The demographics of consumers who use travel agents will not surprise anyone. A higher proportion have taken three-plus trips in the past year, are married, have already hit their 35th birthday and have an annual income over $75,000.

That $75,000 mark, by the way, is a fulcrum of sorts. Individuals with household incomes above $75,000 spend, on average, more than twice the amount spent by those with lower incomes ($7,690 vs. $3,730).

But averages don't hint at the degree to which travel spending per household actually varies.

Fifty percent of the respondents spent $3,624 or less on travel in the past 12 months, while at the top end, 2% of the sample spent $25,000 or more.

Wired and agent-friendly

Although consumers seeking expertise are more likely to book through a travel agent, that does not mean they don't value the opinions of others.

In fact, travel agent users are more likely to also consult a travel-review website than are those who don't use agents (60% vs. 47%), and about 29% of them said such sites have "very much" influence.

The younger the traveler, the more influence these sites wield, but more than a third rated them "good" in terms of providing accurate and helpful advice.

Back to the three questions

We started out with a lot of anticipation about whether consumers who use travel agents still take more trips, longer trips and more costly trips. All three appear to be the case, with travel agent clients spending, on average, twice as much per year as those who don't use agents at all.

That should certainly reassure many suppliers and agents, but there are implications that need further investigation. While the survey suggests there is a lot of high-end traffic going through agents, what will happen with the mass market products that have for years been the bread and butter for some agencies? Have enough agents turned away from lower-priced inventory that suppliers of mid- and lower-range products will look elsewhere for distribution channels?

And will agents continue to lay claim to "expertise" as their clients turn in increasing numbers to consumer review sites?

Stay tuned. We've established a new baseline, and next year we'll be able to see in which direction some of these lines are trending.

In the meantime, we've used the survey as a jumping-off point to explore many of the themes uncovered by the data.

I'm confident you'll find what follows in this special issue to be truly enlightening.

Email Arnie Weissmann at aweissmann@travelweekly.com and follow him on Twitter
Click here to read the Consumer Trends report
. 

Methodology

The information presented in this report was obtained by the Warren Weiss Co. during the second half of June 2012, and from PhoCusWright Inc. from Jan. 13 to 23.

The Warren Weiss Co. collected data via a questionnaire that was administered online to a representative sample of the general population of the U.S. Qualified respondents had to be age 21 or older and had to have taken one or more leisure trips that required an overnight stay in the past 12 months. A total of 603 respondents completed the survey. This sample size provides an overall margin of error of 4% and allows for analyses of different subgroups.

Once qualified, respondents were asked detailed questions about each leisure trip taken in the past 12 months that required at least one overnight stay, beginning with their most recent trip. These questions were then repeated for the second most recent trip, if taken, and so on for each trip up to a maximum of four most recent trips.

The remaining questions were general questions about travel booking methods used and satisfaction with them, amounts spent, usage and influence of travel-review websites and social media and, finally, demographics.

PhoCusWright fielded an online survey through Global Market Insite Inc., targeting the general U.S. adult population that has Internet access and travels for leisure.

To qualify for participation in the study, respondents had to have taken at least one leisure trip a minimum of 75 miles from home in the past 12 months that included paid lodging and/or air travel. In addition, consumers were required to have played an active role in planning their leisure trips.

PhoCusWright received 2,036 qualified responses, and the weighted respondent pool can be projected with confidence to the U.S. adult population with Internet access. A total of 4,915 respondents were surveyed to obtain baseline metrics about travelers and nontravelers within the general online population. The error interval for analysis of the U.S. traveler population is 2.19% at a 95% confidence level. Significant differences noted in this report were identified at a 95% confidence level.

Using data from the U.S. Census Bureau and Pew Research Center, PhoCusWright projects the number of adults with Internet access who have taken at least one leisure trips to be 115 million in 2011, representing 48% of the total U.S. population. The additional requirements for respondents to have played an active role in travel planning further narrows the focus of the study, as 18% of travelers were consequently disqualified.

Click here to read the Consumer Trends report. 
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