Travel agencies, once the go-to for vacationers and businesspersons looking to plan trips at home and abroad, took a devastating hit in the 1990s when sites like Expedia and TripAdvisor put far-flung destinations just a mouse-click away.
Over 20 years after the first online booking site emerged, the immense amount of detail and choice available via these sites seems to be too much of a good thing. Now, travel agencies are seeing a rush of customers once again.
The Travel Agency Was Born Thanks to the Temperance Movement
First, let’s put the travel agency in some historic context. Traveling for leisure and education is as old as antiquity, with records documenting curious and well-to-do ancient Egyptians journeying to famous monuments like the Sphinx, ancient Greeks crossing the archipelago for the Olympic games, and ancient Romans relaxing on Mediterranean beach resorts. Fast forward to the Middle Ages, which saw pilgrimages to holy sites, and the Enlightenment era, which brought the Grand Tour of Europe to its peak.
Enter Thomas Cook. In 1841, Cook, an English entrepreneur, capitalized on a new technology, the railroad, and a rising middle class’s desire—and means—to escape industrialized urban centers. That year, he organized what’s considered the first package tour: an all-inclusive rail trip for over 500 people from the bustling grime of Leicester to the peaceful greenery of Loughborough.
The travel agent was king.
His clients hailed from various social classes, but they were all heading to the English countryside for some rest, relaxation—and a temperance meeting. They were teetotalers, waging a campaign against what they viewed as the wasteful and ruinous consequences of intoxication in the name of Victorian moderation and responsibility.
The cost? One shilling. The distance? Some 10 miles away. The trip included food, and travelers were also treated to some musical entertainment.
Cook’s start was humble, but his vision was pioneering. He quickly expanded his excursions, and his innovation—the travel agency—took off across Europe. Mass tourism boomed in the 20th century, fueled by the ascent of the airplane and post-war wealth. And the travel agent—ticketing dream itineraries with their expert knowledge of destinations and close connections to airlines, cruise ships, and hotels—was king.
According to the American Society of Travel Agents’ (ASTA) 2013 Industry Overview, the number of travel agencies peaked in 1997 with a total of nearly 30,000 locations in the U.S. Twenty years later, that number is down by more than half, even though the World Tourism Organization recorded hundreds of millions of Americans traveling internationally at a cost of hundreds of billions of dollars each year. What happened?
The Internet Made the Travel Agent a Middleman
Just over 150 years after Cook, another entrepreneur took advantage of a very different kind of new technology to transform the travel industry: the internet.
In 1994, John Davis, CEO of the Hotel Switch Company, launched Travelweb, considered the first website that allowed travelers to book hotels and airline tickets online—directly themselves. Microsoft, Bill Gates’ PC behemoth of the 1990s and early 2000s, rolled out Expedia in 1996, which spun off a few years later to become a travel company giant all its own.
Expedia’s holdings now include many of the first-stop shops online when booking rooms, seats, and car rentals: Hotwire, Orbitz, Travelocity, and Trivago. Priceline, with William Shatner memorably pitching "Name Your Own Price," debuted in 1997, adding further competition to the online accommodations marketplace.
It wasn’t that travel agents were slow to take up technology per se. Rene, owner of Brown’s Travels and Tours in Cincinnati, Ohio, says travel agencies were historically “cutting-edge” and “had some of the first computers integrated with airline reservation systems,” which date back to American Airlines in the late 1950s.
The problem was that online booking engines like Expedia made travel agents into middlemen. “Airlines used to pay us commission on every airline ticket,” Rene says; that practice ended in the 1990s just as online booking engines were taking off. But now, why would airlines pay travel agents for something consumers could just do themselves?
“That really got rid of a lot of travel agencies,” Rene says. To survive, he added, agencies had to start charging clients fees (which he himself is reluctant to do) or wow them with their expertise.
Now, with the likes of TripAdvisor, which was founded in 2000 and quickly became the world’s leading travel website, expertise also migrated online. TripAdvisor allows users to post and look up their own reviews of hotels, restaurants, and attractions, making information more immediate and accessible—and making traveling even more of a do-it-yourself experience, further cutting out the agent in the traveling process.
The year 2000 also tolled another knell: The peak number of travel agents in the United States hit a ceiling of just over 124,000 that year, according to the U.S. Bureau of Labor Statistics. That amount declined steadily year after year.
Besides the internet, other non-travel forces squeezed travel agencies. The 9/11 attacks scared away many would-be fliers, and the Great Recession of 2008 slashed the budgets of businesses and potential travelers alike. The rise of telecommuting also cut down on the need for business trips (and the use of travel agents to book them). It seemed that travel agencies were truly a thing of the past.
TMI, FOMO, and Humans to the Rescue
“It’s amazing we stayed in this business,” says Suzanne, who works with Rene at Brown’s Tours and Travels. She’s been in the industry since the 1970s. “But people are coming back.”
The internet can’t teach you everything about travel.
In Jim Crow America, many places were discriminatory and outright hostile to black Americans. Black travelers often relied on the annual Negro Motorist Green Book, which pointed to them to establishments that were more welcoming to them.
Reverend Harry Brown, a black Baptist minister, “took his parishioners—most of whom had never traveled—to restaurants and hotels and taught them how to assert their rights," according to the Cincinnati Enquirer. That tour inspired the reverend to found Brown’s Tours and Travels in the 1950s, which went on to create tours for over 10,000 black Americans.
Brown’s was a mainstream brick-and-mortar travel agency by the time Rene took it over in 1996, but it still has something in common with its activist roots: “The human touch,” Rene says. “Sometimes you just need to talk to someone.”
The internet has flooded travelers with too much information. Hotel and flight aggregators like Expedia and Priceline bombard holiday-makers with prices, times, deals, and stipulations as their pop-up competitors add yet more noise to the search.
Travel websites, from Lonely Planet blog articles to TripAdvisor hotel reviews, bring the world to their fingertips—and a world of too much choice to their brains. Vacations are costly, special, and often once-in-a-life experiences, and vacationers don’t want to miss out or make the wrong decision on their expeditions.
“People are coming back. Everyone is busy. They don’t have time to search these different sites. Sometimes they’ve had horrible experiences” booking their own vacations through them, says Suzanne.
“And the internet can’t teach you everything about travel,” Rene adds.
People also like the comfort and support a travel agent can uniquely provide. Suzanne described a client who was traveling in Baton Rouge, Louisiana, during its freak ice storm in 2014. Before her client even knew the unpredictable and extreme weather event was wreaking havoc, Suzanne was able to reschedule a flight for her—while other stranded passengers were stuck on the phones or waited in long lines at airports.
She also mentioned a client who recently had a knee replacement. She called ahead to make sure the London hotel, with which she’d done a lot of business in the past, had a wheelchair ready.
And for as much Priceline can offer travelers bargains, travel agents still have a knack for crafting an exciting itinerary at an affordable price. “I was working with a couple who wanted to go to Italy,” Suzanne says. “They found a direct flight from Cincinnati to Rome for $1,600 a ticket.” She found flights—and nine nights in boutique hotels in Rome, Sorrento, and Venice, all for $1,475.
Suzanne also noted that though 70 perfect of trips booked in the U.S. happen through travel websites, travel agencies are still competitive when it comes to cruises and all-inclusive package tours.
Vacationers indeed want value. Suzanne and Rene have been observing a growing trend in their clients, most of whom are referrals or repeat customers and many of whom even fall in that millennial sweet-spot of ages 20-40. Clients are planning their holidays farther in advance so they can book—and put up the cash for—quality hotels and experiences they want out of their precious time away from work and home.
And these vacationers are increasingly using people like Rene and Suzanne to do it. The ASTA found that the industry was turning around in the late 2000s and early 2010s, with nearly 50 percent of agents reporting an increase in revenue, transactions, and clients over that time period. In their 2013 report, they registered 40,000 new independent agents (second-career, part-time, home-based, etc.) in the marketplace.
In a 2016 report, they found that 22 percent of 14,000 consumers surveyed booked through a travel agent—“the highest share in the past three years,” as its press release touted. And what’s driving the comeback? Experience.
Experience Is the New Destination
Whether they're looking to visit a remote tropical beach or an Egyptian pyramid, travelers aren’t just hungry for the destination. They want an experience.
Upscale globe-trotters and shoe-string millennial adventurers alike don’t just want to fly to Norway. They want to sleep under the Northern Lights at a luxury eco-lodge in a wolf preserve outside a small village that crafts reindeer jerky using old-fashioned methods—and they are going to travel agents to arrange such unique, exclusive, complex, off-the-beaten-track, and hyperlocal trips that would otherwise be very labor- and time-intensive for the everyday Googler.
The hunger for experience is extending to travel booking itself. Departure Lounge has been reinventing the brick-and-mortar agency in Austin, Texas, since 2013, serving as a posh bar/cafe with specialty travel agents available in case customers want to book a trip. Its founder, Keith Waldon, has said he gets 83 percent closure rate whenever he meets with a client in person—more than twice what he gets by phone or email.
Encouraging clients to “get tripsy,” Omaha, Nebraska’s Travel Design Lounge is similarly asking clients what drink they would like as they plan where they want to go.
Other agencies are rethinking the very nature of taking a vacation—and what it means to book the perfect trip. Paige Stageberg and her husband recently used Pack Up + Go, a self-styled "surprise" travel agency, which came recommended from a family member. "The whole concept is that the you don’t know where you are going until the day of your trip," says Stageberg, a busy young professional and new mother in San Francisco.
Stageberg had used travel agencies twice before in the past (one for a trip to Morocco and another to Southeast Asia, not to mention her mother was a travel agent), but she had never done anything quite like Pack Up + Go.
I think my time gets a lot more precious than the dollars I’d be saving if I did it myself.
This service asks travelers some basic questions online about whether they want a driving or flying trip, a relaxing or adventurous trip, dates, budget, and so forth. Then, the agency picks a mystery destination, books accommodations, and recommends activities all along the way. Leading up to the date of travel, Pack Up + Go sends out, via email and snail mail, enticing hints about the destination by noting the weather and suggesting to pack, say, walking shoes and a nice outfit.
The Stagebergs ended up in Monterey, California, for their anniversary—and first weekend away from their baby. On the morning of their trip, they opened up a snail-mail packet they received from the company. It mapped out a driving route complete with delicious food stops and curious points of interest, such as the Winchester Mystery House in San Jose, which Stageberg said she never would have thought to visit before Pack Up + Go suggested it.
"I was really excited that they told us that we’d have a nice night out," Stageberg says. "That was super exciting because, as new parents, it’s been a lot of yoga pants and Netflix. We love eating and drinking. It was fun to play adult."
At their dinner out at a nice spot locals frequent, the couple was greeted by a $100 gift certificate to a massage scheduled for the next day—compliments of Pack Up + Go. “We are only bummed that they are only doing three-day trips,” Stageberg says.
Commenting on the travel industry more broadly, she added: “Now we think of a travel agent as a novel idea. Someone books all of your travel for you? But that’s how it used to be. As I get older, I think my time gets a lot more precious than the dollars I’d be saving if I did it myself.”
Stageberg isn’t certain DIY travel booking always save money anyway. After her trip, she looked up the price of the hotel Pack Up + Go lodged them in. It wasn’t any cheaper with Expedia.
Pack Up + Go joins many other travel agencies and services that are disrupting the travel industry.
Lola—short for longitude and latitude—is an app released in 2016. It helps travelers plan trips through a guided interface that narrows down general information (e.g., destination, date, needs, and preferences) and then connects them with a travel agent who can help them with all the details, from booking rental cars at airports to providing real-time flight information to suggesting local restaurants and activities.
Booking trips isn't the only way that new companies are looking to make inroads into the travel industry. AirHelp provides legal services to air passengers and Freebird helps travelers quickly book new tickets upon flight cancellations.
Travefy is a service that allows travel professionals to build customized apps for their clients’ trips, while Virtuoso is a travel network that connects trip-planners to “travel advisors,” or travel agents with specialized expertise in the destination or activity at hand. For its part, Navitaire is bringing virtual reality to the travel booking experience:
Airbnb, meanwhile, is no longer content with the way it revolutionized the accommodations business. Last year, it rolled out Airbnb Trips. With Trips, users can book “experiences designed and led by local experts, like chefs, street artists, and sumo champs.” Trips-sters can explore Havana’s music scene with an accomplished Cuban vocalist, tour Los Angeles’ urban gardens with an area documentarian, or train for a marathon with runners in Kenya. And with Trips, Airbnb is making everyone into their own, one-person, hyper-local travel agent.
“As millennials we think of travels agencies as this novel, niche-y idea,” Stageberg observed. “People are becoming a lot more boutique. They specialize in something, there’s a catch or something unique about it.” The trends bear her opinions out.
But Stageberg also observed another trend. “It’s still internet-based,” she says of Pack Up + Go, where she interacted with the agency entirely through email or mail. “I never met a single person. Travel agents have adapted to technology.” For her, the internet’s a real time-saver, because she can’t get to a brick-and-mortar shop as a busy working mom during normal business hours. “The internet lets me send in a request and they get back to me the next day.”
And for travel agencies, the internet is turning out to be a stroke of genius. The internet gutted their business but, thanks to the glut of information and the hubbub of modern life, it drove travelers back into the agency fold. Now, the internet is letting travel agents have the best of both worlds.