As more and more travel agencies, with varying degrees of enthusiasm and reluctance, give up their physical retail space, the landscape of Main Street USA has changed. You can now drive for miles down some commercial boulevards in America without passing a brick-and-mortar travel agency.
But turn onto a residential side street, and it's possible you'll pass houses where home-based agents are working. From anonymous offices, they can reach a worldwide clientele, earning a living without registering a single sale in their own communities.
Is the reduction of visible competition good news for the thousands of remaining brick-and-mortar agencies? No, says Billy McDonough. Invisibility, he believes, should be of great concern to travel agents, and not only those with a storefront.
McDonough is president of Liberty Travel, which has about 160 retail locations. It had about 200 locations just two years ago when he was assigned by Flight Centre, Liberty's Australian parent company, to take on the role of Liberty's vice president of retail. Once he arrived, he was soon involved in closing down 38 agency locations.
But apparently the 20% reduction in locations did not stem from a lack of faith in brick-and-mortar by Flight Centre. In fact, Flight Centre's retail travel shops in Australia are nearly as ubiquitous as Starbucks is in the U.S.
"From an industry perspective, there's danger for travel agents to lack a physical presence," he said. "As a group, you can become invisible. And if you're invisible, customers will make other choices about where to buy travel. You have to be relevant. Your location can show that you're at the core of a dynamic, ever-evolving and exciting industry."
McDonough plans to open six more Liberty locations in 2010 and another 135 or so over the next decade. So why did he start by shutting down 38?
"Some were past the point of reviving," McDonough said. "Lease terms weren't conducive. Or the population shifted over the course of 20 years. There was one where we were the only retail business in a strip mall. In another, the store was cavernous: 2,500 feet for just two or three agents."
McDonough stressed that while he believes in the importance of visibility, he has nothing against home agents. "We have about 110 outside agents," he said.
Another fan of physical locations is George Morgan-Grenville, Abercrombie & Kent's group managing director.
"The agencies that invest in training and product knowledge are the ones that are going to win" in that space, he said. "The phone can be a useful barrier, because it gives you time to do some research. But if you put a client in front of a travel agent, the need to have information immediately goes up tremendously."
A&K recently took retail space inside Harrods department store in London, and Morgan-Grenville said that "63% of the business has been walk-in. The size of some of those sales -- you'd be surprised. We had one trip to South Africa that sold for 183,000 pounds. We had an inquiry for a wedding in Florence for 500 people. That will be a million-dollar piece of business. It worked because the consultant whotalked to the client knew his way around Florence, understood availability and was there to hold his hand."
While both McDonough and Morgan-Grenville understand the benefits of a physical shop, neither ignores the Web. Before purchasing Liberty, Flight Centre acquired DiscountCruises.com, an online agency McDonough characterized as "underutilized." But part of its model is that consumers who want to book online also get a call from an agent, as part of the sales process.
Morgan-Grenville said that A&K "sold four private jet tours [on the Web], $90,000 to $100,000 per head, without even the telephone."
We are now four days into a new decade. In 2010, the sales mix among retail locations, home agents, online travel agencies, supplier-direct sales and -- who knows? -- a channel yet to emerge will change consumer buying habits in ways we can't imagine today.
If physical retail locations were to disappear in the new decade, would it have an impact on other channels?
I think it would. A friend of mine once headed up the Outdoor Advertising Association of America, the trade group for billboard companies. It's a form of advertising that has been under pressure for decades. First radio, then television, then the Web were all going to make it obsolete.
But the reason we still see billboards is neatly summed up by the slogan the association used when my friend ran it: "We're not a medium. We're a large."
One could argue that if you're an online agency, being visible on the Web is all that really matters. But the presence of a retail travel agency is akin to a billboard that sends a message that benefits all travel sellers.
We all spend a lot of time online, but we also still walk the Earth, and when we pass a travel agency, we're hearing two messages large and loud. The first is a simple reminder to book our next vacation. The second -- the one McDonough wants to send -- is that among your choices to book that vacation is the option to buy it from a trained, knowledgeable and visible human being.
Contact Arnie Weissmann at [email protected], and follow him on Twitter.