Your Money: Old-school travel agents stage comeback

Wed Jul 18, 2012 1:50pm EDT

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(Reuters) - Justin Yax has booked plenty of trips himself using myriad online travel sites. But for a tour of Italy in 2009 and his honeymoon trip to the South Pacific next month, he went old-school and turned to a travel agent.

"There's greater comfort when talking to somebody - a real person," says Yax, a partner in a Bend, Oregon advertising agency. "It's not just putting something in a shopping cart and checking out."

Yax, 40, is not alone as travel agencies enjoy a turnaround.

Agencies had been suffering from years of declines as online travel sites - including Expedia Inc, Travelocity and Priceline.com Inc - took root.

Also, consolidation decreased the number of visible storefront offices, and many of the remaining agents switched to a lower-overhead work-from-home model, says Nina Meyer, president of the American Society of Travel Agents.

"The industry sat back for a while and said: 'Woe is me,'" she says.

Over the past couple of years, though, the pendulum swung back, and business is growing again - for many in leaps and bounds, she says.

Agencies made $95 billion in sales in 2011 - about one-third of the U.S. travel market, according to Connecticut-based travel research company PhoCusWright. While the majority of the revenue comes from business travel, the leisure segment still accounts from more than $20 billion.

At American Express Travel, Vice President David Patron says bookings through agents were up 12 percent in the first half of 2012 from a year earlier. The company is neck-and-neck with Expedia as the U.S. market leader, according to the Travel Weekly Power List.

Surprisingly, Generation Y - consumers in their late 20s - accounts for the biggest percentage of business at traditional agencies, according to Mandala Research LLC.

Some of that, Meyer says, is due to an increase in the number of young people who have gotten into the business as agents and are drawing clients from their own generation.

A STEP UP

The move toward human-booked travel does not mean the websites are hurting, however. Even people like Yax, who use travel agencies, still book their less complex trips online.

But what is clear from interviews with numerous travel agency executives is that the in-person business has changed to one that is, in many cases, similar to how investors use financial advisers.

In fact, many in the travel business want to be known as advisers or consultants rather than agents. They play up the idea that they are managing both your time and your vacation investment instead of just booking packages and getting tickets.

Some build on a specific expertise by serving a niche - anything from catering to the wealthy to specializing in scuba diving trips, religious pilgrimages, cruises or specific places.

And they want consumers to know they are a one-stop solution when a problem arises.

Meyer and others in the industry say one common thread among newer clients is their need for someone to sort out the sheer volume of information on the Web.

"What we're seeing is more of an indication of information overload," says Dwain Wall, senior vice president of Fort Lauderdale, Florida-based CruiseOne, which has 750 franchisees and another 500 contracted independent agents. "I think consumers are more confused when they're done than when they start … and what information they can trust when they're on the Web."

BUILDING RELATIONSHIPS

Service costs, of course. Some agencies that provide as much advice as bookings will charge a fee on top of commissions.

High-end Frontiers Travel in Wexford, Pennsylvania, for example, will collect about $250 for planning the typical weeklong trip itinerary. Other agencies have a sliding fee, and all say they will charge more when booking something complex, like a destination wedding.

But the agents say their clients accept the cost in exchange for saving time and getting someone who is plugged into their destination to be sure all the pieces are in place. That could be anything from hiring a guide familiar with the Paris antiques scene to scoring a last-minute room in London for the Olympics.

Business has never been better at Frontiers, which relies heavily on its relationships with the destinations, co-owner Mollie Fitzgerald says. High-rollers continue to roll high, she says, noting the recent booking of a last-minute, $64,000 trip around the world.

"Most of us lead busy lives and would pay a professional for expert advice - think doing your own taxes versus using a CPA," says John Clifford, a travel consultant with InternationalTravelManagement.com. "Yes, you'll pay a professional fee, but can often save several times that amount in the end."

Interior designer Phyllis Harbinger, 49, says she used a travel agent because she experienced one too many fouled-up reservations with online services.

"I'm a great traveler, and I've been all over the world," she says. "But I don't know who has the best amenities. Having that trust factor and having the trusted adviser …, that's worth gold."

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(Editing by Beth Pinsker Gladstone and Lisa Von Ahn)

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