Consumers and travel industry
feel effects of the Internet

March 16, 2004

By Cindy Bussanmas
Iowa's Internet

DES MOINES, Iowa — The travel industry has undergone considerable change as a result of online travel services. Dot-coms are delivering the travel industry's most basic and most complex offerings, and they are taking advantage of the Internet's efficiencies.

The shift to the Internet has had a significant impact on Iowa consumers. Regardless of the travel need -- flying, sleeping, driving or even researching and picking a destination -- the Internet is where people are going.

The Internet is a fantastic vehicle for the dispersion of information. Consumers needed travel agents when travel information was so hidden they could not possibly make an intelligent travel decision without a travel agent. With the Internet, consumers don't need to rely on a third party's view of the opportunities available or wonder if they are getting the best deal possible.

While eliminating the travel agent might have positive aspects for consumers, the shift to the Internet has had a negative impact on Iowa's travel agent industry.

Cathy Davis, manager of operations at Air Fulfillment Services, has experienced this change first-hand. Davis went from managing a retail travel agency in Des Moines to working for a corporation managing air services for group and incentive travel.

"I left the retail side of travel for the safe haven of corporate travel," Davis said. "It's a more secure job because the Internet can't contract discounts with the airlines or block large groups of seats, which is what our company does."

Davis said the Internet has forced Des Moines travel agencies to make considerable changes to stay in business, and many of the smaller agencies have gone out of business. According to Davis, travel agencies are now focused on the leisure traveler who wants help with vacation planning and buys a complete package of travel services.

Purchasing travel services online meets the needs of today's fast-paced need-to-know-now consumers, but becoming your own travel agent doesn't come without risk.

Davis said most Internet users are looking for bargains and last-minute deals. She said for the Internet-savvy users, everything usually goes fine. However, Davis says consumers need to recognize that by using the Internet, they forgo knowledge from a professional in the travel field.

"Travel professionals are knowledgeable about different flight options, they offer suggestions on roughtings, and they know what types of documentation is needed for different geographic locations," Davis said. "Good travel agents also offer suggestions that can save the customer a lot of money."

Davis referenced several ongoing problems customers had using the Internet when she was in retail sales. "Customers would call us for help after they booked a one-way ticket when they wanted a round-trip," Davis said. "They didn't understand that travel agents can't touch tickets once they are booked on the Internet."

Another downfall of using the Internet is that when a user enters her/his credit card information and hits submit, the transaction is final. In contrast, Davis said that when people work with travel agents, they have until the following Tuesday to make changes or void tickets before they are charged.

But when it comes down to it, most people naturally go where they can get a deal, and the Internet is meeting their needs.

The Internet has undoubtedly led to closure of many small Iowa travel agencies. While no one likes to see jobs lost, the gains to Iowa's consumers in terms of better information and better buying decisions could far outweigh the job loss.

Travel agents, whose main job was the brokering hard-to-find information, have found they are increasingly becoming obsolete. The Web-based free flow of information continues to make it more difficult for the traditional travel agency to survive.

These evolutions in the travel industry match the broader impact of the Internet on other industries. After all of the initial excitement of new Web-based offerings, the Internet is becoming most known for that important but mundane role of eliminating steps along the value chain that no longer add value.