Online travel agencies work by connecting to a “global distribution system”, which is a fancy name for the market where airlines tell distributors what they are charging for their flights. When you book directly on an airline's website, your ticket is usually issued almost immediately. A relationship with a travel agent goes beyond a single transaction. The best agents monitor the trends of their best customers and call them to let them know when there is a fare sale to their favorite destination, or their preferred cruise line has published itineraries to ports that may be interesting to them.
For personalized and detailed itineraries, they can work with destination specialists on behalf of their customers, keeping an eye on their interests during the process. Agents were a source of information and ticketing, and were rewarded with airline commissions. Once upon a time, in traditional travel agencies across the country, travel agents could make a living by booking air travel for their customers. However, Tammy Levent, owner, president and CEO of Tampa based Elite Travel, is not an airline fan.
Major players, such as Sabre Travel Systems and Travelport-owned Galileo and Worldspan, are now facing challenges from airlines, who are convinced that the GDS intermediary system charges more than they are willing to pay to process a ticket. Consolidators pay wholesale fares to airlines for large blocks of seats at a significant discount, which they sell to travel agents who resell them to consumers with a competitive margin. Airlines continued to need travel agents as part of their distribution system, and agents needed to interact with airlines if they were to book travel for their customers. Fares help ensure that travel agents receive compensation for their work at the time of booking (commissions, when paid, are distributed after the trip).
The conflict echoes the commission caps and eventual commission disappearances that travel agents faced 11 years ago, and it is likely that the GDS will follow the path of the Polaroid camera and the electric typewriter. A good account representative will also keep agents up to date on the latest technologies and enhancements that can make it easier to sell trips and support their customers. In the following decade, the relationship between travel agencies and airlines was, to say the least, thorny. Today, with the country immersed in a challenging economic environment, it might be time for agents and airlines to partner once again, even if done in a personalized way, on a case-by-case basis.
FIT travel agents make money not only through the above mentioned fares, but they can also earn money through net price surcharges and commissions from the different providers they book. When you want an itinerary designed just for you, travel agents call it a FIT trip (flexible independent travel) in plain language, you would call it a personalized itinerary. The better an agent understands your travel style and understands how your needs evolve, the easier it will be to plan your trip.
