tan Plog is good at asking questions.
The man whose research has both tracked and influenced the
direction of travel over several decades sold his company some time
ago, but, as a consultant, he continues to think about what
questions we should be asking ourselves.
"Contrary to the opinion of many, travel agents exercise
influence over their clients," Plog said. "Not always, but at
important times. I have seen that over and over again in my
So the first question agents and suppliers need to answer, Plog
believes, is: In which situations does influence occur, and
when does it not? A simple question, but no one knows the
answer. And the answer could profoundly change the way travel is
sold, increase agents' clout and help suppliers market through
agents more effectively.
Plog's second question revolves around the true costs of various
forms of travel distribution. The airlines, Plog observes, shot
themselves in both feet when they cut agency commissions and placed
their bets on the Internet. The stated goals of these actions were
to reduce costs and increase passenger loyalty. Plog argues that
his research shows that, in fact, they reduced loyalty, and he
strongly suspects they increased costs.
Suspects, but doesn't know. What, he asks, does it
cost to sell through a travel agency vs. a supplier's call center
vs. the Internet? Travel agencies and the suppliers that still
rely on them could both benefit by knowing the cost to sell travel
products through various channels.
"Arguments will arise in the future from some of the remaining
industry segments as to whether they should continue to support the
travel agency community," Plog said. Research, he thinks, will
provide arguments that will address those concerns with meaningful
And what, he wonders aloud, are the components that
go into the making of a model, profitable travel agency? "Some
agencies do well while others struggle, and there isn't sufficient
depth of analysis to help a manager put together a plan for
success. Selling high-commission items may be part of the model,
but clearly there are other key components."
Likewise, he wants to know how have brick-and-mortar
retailers in other industries succeeded in dominating the Internet
in their segment, keeping Web-only retailers at bay. "Amazon.com got the jump
on selling books on line, but Barnes & Noble is gaining strength in the segment.
Similarly, everyone thought car lots were going to fail against
Internet-based car sellers, but the old-style car dealer dominates
the Internet business. There are lessons to be learned if we ask
the right questions."
A related line of inquiry also could be made to determine
what do today's travelers seek when they go to a
brick-and-mortar agency vs. what they look for when they go on
line. "Travel agencies have to meet all a travelers' needs if
they want to increase revenues and profits. Growth of sales on the
Internet has slowed down in general, but not in travel." Knowing
what attracts travelers to the Web will be invaluable information
to storefront agencies.
Plog's agenda of questions is at once basic and ambitious. The
answers may be too costly for any one player of our fragmented
industry to obtain, but the questions alone have value. Sometimes,
it can be very helpful to be reminded just exactly what it is that
you don't know.
Clarification: Last week in this space, I wrote
about the Cendant/Galileo GDS pricing initiative called Momentum.
In the course of the column, I reviewed previous initiatives, and
unintentionally omitted a program that deserves mention for
advancing the evolution of the pricing models: The Sabre DCA Three
Year Option. In this program, Sabre reduces airline's booking fees
by 10% from 2002 levels, and in exchange airlines must post Web
fares and participate "at the highest level of connectivity" with
Sabre. (It launched with US Airways, and now includes additional
carriers.) Agencies can access all fares without reduced or