Home Based Travel Agent Basics: Mini-Course - Part 1

Home based travel agent mini-course: Part 1: The "Traditional" Travel Agency.

The twentieth century saw the rise of the travel agent. Middlemen (which is what travel agents are, in effect) became necessary for a number of reasons. Travel is a very complex product -- a whole series of products, in effect. In the early days, at least, the companies that provided the
products were far more adept at providing than at selling. Their customers were also very widely distributed geographically.

These and other factors created an opportunity for entrepreneurs who agreed to represent the products of many different travel suppliers to a local market in exchange for a commission on the sale. That commission was traditionally ten percent, although as in all selling situations top producers were rewarded with higher commissions, called "overrides" in the travel business.

The system of distributing travel products through a network of travel agencies took hold and travel agencies themselves came to look very much alike, sharing a great many common features. They were storefront, retail businesses, located in commercial districts of town, open during normal retail business hours. In short, they were very much like the clothing shops, boutiques, grocery stores, bookstores, and other retailers with whom they shared the block. This picture is what I call the "traditional" travel agency.

The traditional travel agency looks the way it does for many reasons, but several concern us here. Mostly they have to do with the airlines.

Airline tickets are written (or printed, now) on blank paper called "ticket stock." In its blank form this paper is like a blank, but valid, check. Anyone who has it can write a ticket to anywhere for any value. Hence the term, "write your own ticket." Ticket stock is extremely valuable and since it is
entrusted to travel agencies the airlines had a very valid reason to ensure that their ticket stock was safe. So they developed a set of rules that would tend to ensure that they could trust the travel agents who were selling their tickets.

These rules included things like:

• A business location in a commercial district. In other words, the travel agency had to look and act like a "store."

• A system of bonding, to assure the airline that the travel agency owner was solvent and respectable and, therefore, not likely to be tempted to do anything fishy with the airline's precious ticket stock.

Another factor determining the look and feel of the traditional travel agency is the computer. Travel agencies were one of the first businesses to be extensively computerized. The complex and expensive computerized reservations systems (CRS) that made ticketing easy encouraged even more centralization and "professionalism" in the travel agent industry.

In other words, if you wanted to be a travel agent you had to open a storefront agency with its high overhead and complex computer systems. This took a lot of money.

Of course, you could also get trained to operate a CRS and go to work in a storefront agency, and many agency owners started out just
tthis way.

This pattern, in turn, created another distinguishing characteristic of the traditional travel agency: it was a
place to which would-be travelers came to talk to agents sitting at a desk operating a CRS.

Most travel agents became "order takers."

Of course, there were always exceptions to this general rule. Many travel agencies employed "outside agents" to hustle up business. These outside agents were, in effect, free ranging inside agents who returned to the agency and their RSs to generate the airline tickets and other bookings they had made outside.

Some agencies used "bird  dogs" as they are called, people who sent customers into the  agency location where inside agents would cater to their
needs. Bird dogs performed a valuable service and were  compensated with a small percentage of any commissions that  resulted from their referrals. This was very much akin to the  "finder's fees" paid in other industries.

Nonetheless, these were exceptions that proved the rule: most travel agents were reactive order takers tied to their desks and the CRSs that
sat on them.

All this began to change in the 90s thanks to a number of interrelated trends, which we discuss in Part 2.
 

----------------------------------------------------------------------