News | Sunday, 30 May 2010

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Travel agents can expect ‘casualties’ as low-cost grows

Direct bookings are having a considerable effect on travel agency business, as more travellers are making use of direct bookings using the internet, Iain Tonna – the president of the federation of travel agents FATTA – has told Malta Today.
Tonna has expressed caution however over customers’ expectations of service, saying they have been left in a quandary when demanding additional services such as rescheduled flight timetables from low-cost airlines.
“Basically it is a fact that consumers are booking directly with airlines, be it low-cost or flagship carriers, especially when it comes to travel involving only one destination back and forth. This has obviously resulted in a substantial loss of business for local travel agencies, who have also seen their staffing levels drop over the past years due to these difficulties.”
Tonna said agencies had to find a way to re-adjust to the current economic scenario. “The situation is not expected to change much and we expect some agencies to be tested with regards to sustainability.”
Customer perception remains an important issue, with many low cost airlines expected to provide the same quality of service from a travel agency.
But this was obviously not always the case. “The volcanic ash cloud and the havoc it caused in the travel industry was a case in point, as many customers were left completely stranded with some who applied for refunds on the flights still waiting for an acknowledgement,” Tonna says.
The travel agents’ chief said he was confident Europe would follow in the footsteps of the United States, which has seen a resurgence in agency bookings in the past six years.
“The chances are that there will be casualties in the medium to long term although we are hopeful that this will not be the case. So far we haven’t heard of any of our members who are experiencing these difficulties although we cannot discount the possibility of some agencies folding.”
Students, mostly geared towards using the internet to book their travels, are a case in point. Francis Stivala, the managing director of NSTS, insisted his firm was still “going strong” and said bookings were still good, despite the direct effect of low-cost airlines on the student market. “There has been a trend which has accelerated in recent years, with direct bookings taking precedence over intermediaries. Our business is still strong although it has obviously been affected by such a trend,” Stivala said.
“NSTS concentrates exclusively on the student market so it would be understandable that it is faced with difficulties,” FATTA president Iain Tonna said. “Discounts given to students are now given by any airline so they have undoubtedly lost a big share of that market.”

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