Airline Commission Cuts, 20 Years Later: Today's Travel Agency Industry Reinvented and Robust

Travel Leaders Group CEO Barry Liben Offers Reflective "State of the Travel Agency Industry"- Says Business among Millennials Increasing Dramatically

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Travel Leaders Group

Feb 03, 2015, 10:13 ET

PLYMOUTH, Minn., Feb. 3, 2015 /PRNewswire/ -- February 9 will mark the 20^th anniversary since U.S. airlines first capped – and then cut – travel agency commissions, leading some "prognosticators" to incorrectly predict the demise of the travel agent. Twenty years later, today's largely reinvented travel agency industry is stronger than ever, according to Travel Leaders Group CEO Barry Liben. The leader of North America's largest traditional travel agency company explained that the industry has become more dynamic, nimble and robust not only because hobbyists have long since exited the industry, but especially because the more business-minded survivors have viewed "challenges" – from commission cuts to the rise of the Internet – as strategic opportunities for refocusing and rethinking their businesses. That in turn, is enabling today's travel agents to reach a vital new audience: Millennials.

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"When the commission caps hit 20 years ago, many in our industry went into panic mode. But I saw great opportunity and knew that our industry had to change the way we did business," noted Liben, who at the time was the leader of New York-based Tzell Travel Group, now part of Travel Leaders Group. "I made it crystal clear to our agents that they really only had one job: to sell travel. By having our agents maintain their focus on each client and their individual needs, while we provided them with support for practically everything else, everyone including the client has won."

Liben acknowledged that industry observers and many outside analysts have repeatedly misunderstood and seriously underestimated the travel agency model, leading them to continuously – and mistakenly – forecast the industry's final chapter.

"The naysayers have always been wrong about the travel agency industry's supposed impending collapse – whether they thought it was coming about because of the advent of credit cards, the beginning of the computer reservations system, the dawn of the Internet or the cutting of commissions," Liben explained. "However, what they simply didn't grasp is that no matter the 'obstacle,' the traveling public has always voted with their pocketbook. And far from all marching lock-step in a 'do-it-yourself' world, a growing number of consumers, including a higher level of Millennials, are increasing their use of travel agents over just the past few years."

Liben pointed to a recently released study by MMGY Global, "2014 Portrait of American Travelers," that showed:

"Perhaps counterintuitively, significantly more Millennials used the services of a traditional travel agent during the past 12 months than older generations. Those who did so used their services on an average of 3.0 trips. And Matures used traditional travel agents significantly more than Xers and Boomers.

"Among those travelers who used the services of a traditional travel agent during the past 12 months, the younger generations were clearly more influenced by their professional advice.

"Millennials and Xers are significantly more likely than Boomers and Matures to report traditional travel agents influence their selection of hotels/resorts, vacation packages/tours, airlines, destinations, attraction/event tickets, car rentals and trains."

"There are many reasons why more consumers are turning to travel agents. From intimate knowledge of specific destinations to their high-touch ability to personally assist before, during and after the trip, today's travel agents are there for their clients when they need them most. The sheer number of agents under our umbrella who are available to their clients 24/7 has grown exponentially," Liben stated. "Because of the size and scope of agency companies like Travel Leaders Group, we're also able to provide an amazing array of extra amenities and services that our clients would never be able to get on their own. Ultimately, our clients have peace-of-mind and travel better."

Travel Leaders Group is one of North America's largest travel companies – encompassing nearly one-third of all travel agents – and generates gross travel sales of approximately $20 billion annually. Travel Leaders Group is a leader in both the retail travel agency space and corporate travel, and it consistently ranks as one of the top travel companies nationwide.

About Travel Leaders Group
Travel Leaders Group (www.travelleadersgroup.com) is transforming travel with a commitment to our vacation and business travel clients via our progressive approach toward each unique travel experience. Having already assisted millions of travelers – through our beginnings as Carlson Leisure Group, a division of Carlson Companies, TraveLeaders and Tzell Travel Group and through the additions of Nexion, Vacation.com and Protravel International – Travel Leaders Group manages leisure, business and franchise travel operations under a variety of diversified divisions and brands. With annual sales of approximately $20 billion through over 6,500 locations, Travel Leaders Group ranks as one of the industry's largest traditional travel agency companies.