ho needs travel agents?" The headline on the lead story on the front page of the business section of the Newark Star-Ledger on March 22 was intended to be provocative.

The subhead, just below, read: "The airlines don't. The online crowd may not -- but 70% of tickets are still bought through them."

The article quoted people who no longer use traditional agents but also devoted several inches to travelers who swear by them.

Nowhere, however, did the article address its headline question comprehensively. Who needs travel agents? Seventy percent of the traveling public, yes. But just as importantly, non-air suppliers depend upon and plan to continue to support travel agents.

When it comes to travel distribution, traditional travel agents are still the whales, and all other methods collectively amount to a school of goldfish.

To every segment of the supplier community, travel agents represent billions of dollars of revenue. According to the last Travel Weekly U.S. Travel Agency Survey, travel agents were responsible for $26.5 billion of revenue for the cruise lines. They booked $16.4 billion on behalf of hotels, took reservations representing $11.4 billion for car rental companies and produced another $11.9 billion for tour operators, travel insurance companies and miscellaneous other travel suppliers.

That's commissionable income. But travel agents produced significantly more revenue than that for suppliers.

For instance, once on board a ship, passengers continue to contribute money to a cruise line's coffers. Every shore excursion dollar, every cent spent in a spa or put in slot machines, or spent in a ship's store -- all of it adds to a cruise line's profits, and the overwhelming majority is spent by passengers brought aboard by travel agents.

Hotels represent another segment that profits more from travel agency sales than their commission payouts suggest. Restaurants, room service, gift shops, lounges and health clubs are commission-free profit centers for the hospitality industry.

I'm not suggesting, incidentally, that agents should begrudge suppliers this commission-free revenue. Travel agents need healthy suppliers just as suppliers need healthy travel agents. The economics of a hotel or cruise line requires that this incremental income strengthen the profit side of their P&L.

And suppliers must bear costs in addition to commissions to work with travel agents, such as GDS fees, trade show participation, maintenance of sales forces that call on travel agencies, direct marketing to travel agents, etc.

The question that both travel agents and suppliers should be asking themselves now that airlines are out of the equation is: How can I deepen the agent-supplier relationship? Suppliers will seek out sophisticated agents who combine database technology with their one-to-one client relationships to produce extraordinary results. Agents will seek out suppliers who will reward them well for extending their client relationships, relationships built on trust.

If you want to participate in these new relationships between agents and suppliers, incidentally, you'll want to sign up for the Travel Weekly Conference May 20 to 22. You'll walk away with the tools to prosper in the new zero-base commission environment.

Brick-and-mortar agents believe in a bright future. Travel Weekly's Web site, TWcrossroads.com, featured a poll the week after zero-base commissions were announced, and a resounding 97% of participating agencies responded that they have no intention of closing up shop. The airlines may have shut the door on agents, but agents have plenty of doors open to the customers and suppliers who need and value them.


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