Today, in venture capital companies across the country, entrepreneurs are making pitches to VCs, and in their PowerPoint presentations there is one slide, especially, that those seeking capital love to display, and that those dispensing capital love to see. This PowerPoint slide has just one word: Disruption!

The reason VCs like to see that slide is because whenever there is disruption in a marketplace, opportunity knocks for someone.

For almost 25 years, from about 1970 to 1995, the travel industry grew very nicely, with suppliers paying commissions to brick-and-mortar travel agents to distribute their products. No one questioned that travel agents were an efficient and effective way to sell travel products to consumers.

But then, in the mid-1990s: Disruption!

The 1995 commission caps and 1996 launches of Travelocity and Expedia changed everything overnight. Suppliers, for the most part, understood the potential significance of these disruptions, and they began to look at travel agents differently.

It's not that anyone knew what was going to happen. But when the airlines, with all their power and resources, decided to reduce travel agent commissions, it caused nonairline suppliers to wonder if perhaps the airlines knew something they didn't.

And for the most part, they recognized the Web for what it is: a tremendous interactive marketing opportunity.

We all know the results of this disruption: the closing of many travel agencies that couldn't adapt to a new model, but also a refinement of targeted marketing on the part of agencies and suppliers. Many agents focused on specific niches, and suppliers focused more on the agents who really delivered for them.

Looking back on today five years from now, we may see the middle years of this decade as another period of disruption(!) in distribution models. The sudden erosion of GDS incentives is certainly going to cause some agencies to redefine their business models once again.

But a more subtle change is occurring that has suppliers reevaluating their long-term relationships with travel agents. They have noticed that the flow of fresh blood into the agency community has been disrupted; young people are not joining the profession.

In the short term, agents are in a fairly sweet place: They are peers with baby boomers and seniors, the wealthiest generations. These age groups grew up with an awareness of travel agencies and are interested in trips that will benefit from professional counseling.

But the younger the travelers, the less likely they are to be aware of the value of a travel agency. While suppliers value the travel agency channel -- because agency clients take more and longer trips and spend more per day -- suppliers base their plans on the assumption that the universe of agency users will shrink.

Can this trend reverse? Perhaps. At this point, it may hinge on whether boomer and senior agents can understand what younger generations want in travel products and how to market to them. But equally important is the question of whether younger people will perceive that older generations understand their needs.

It seems intuitive that Gen-X agents would have more success selling to Gen-X consumers, and echo-boomer agents to echo-boomer consumers.

Perhaps the message to younger people shouldn't be to use a travel agent but to become one.

If younger people don't begin using, and becoming, travel agents, suppliers are likely to rev up alternative methods of distribution before the last older agent dies or goes out of business.

This is what suppliers talk about when agents aren't in the room. They talk about the day when agents may no longer be a factor in the market. It's a disruption they can plan for.


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