In this column, my next-to last before all four digits change on
the calendar, I'll take a very brief look back at travel over the
33 years I've been here. Next week, I'll venture some guesses about
where the industry might be headed.
It might be hard to believe now, but one of the most significant
changes in the mid-60s and '70s was that airlines steadily raised
the commissions on domestic point-to-point tickets. The first
increase came because a study financed by agencies and airlines
showed that nearly half the agencies were losing money at 5%.
In those years, the airlines could get together and agree on
agency compensation because they enjoyed antitrust immunity. That
all came to a halt after the deregulation law was passed in 1978.
From that point on, airlines had to decide individually how much to
pay.
The reality, though, always has been that airlines can't sustain
attempts to change commissions unless their principal competitors
go along with them.
The two major events of the '70s were the introduction of
computer reservations systems in agencies in mid-decade and, a few
years later, the passage of airline deregulation. Both events
elevated agencies' status.
The computers made them more efficient, and deregulation created
such confusion among travelers that agencies became more important
in sorting out all the options.
The '70s also were notable for the advent of the modern cruise
industry, a development that looms even more significantly now
because agencies are back to struggling at 5% air commissions.
The '80s were high-flying times. Agencies that focused on
corporate travel grew to substantial size; agency consortia in
corporate and leisure markets developed powerful positions, and the
role of agencies as valued intermediaries between suppliers and
travelers seemed unshakable.
But in this final decade of the century, the technology that had
empowered agencies in the '70s began to reach unimagined
heights.
The Internet came on the scene with amazing speed, and its
potential as a communications and transaction medium has emboldened
the airlines to seek direct access to travelers and to reduce their
dependency on intermediaries.
These last five years have been dazzling, frightening,
challenging to anyone working in travel agencies. For some, the new
technology has set off a spark of creativity; for others it has
triggered deep fears for the future.
One thing is clear: No agency is likely to survive doing
business as if nothing had changed.