Marketing Research Paper_Travel Agencies vs Online Travel Sites

Marketing Research Project
Prepared by:
Dillon LaHaye
Hillary Minnaert
Nancy Mohamed
Thomas Obarski
Brandon Wagner
MAR 413: Marketing Research Fall 2014
Dr. Nancy L. Harrower
December 14, 2014
Travel Agencies Versus Online Travel Sites

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Concordia University December 2014
Table of Contents
Executive Summary .....................................................................................................................3
Background ...................................................................................................................................4
Objective........................................................................................................................................5
Population Description...............................................................................................................5
Sample Selection..........................................................................................................................5
Research and Design ...................................................................................................................6
A) Methodologies .................................................................................................................................6
B) Limitations........................................................................................................................................6
Data Analysis................................................................................................................................7
A) Survey................................................................................................................................................7
B) Interviews........................................................................................................................................43
C) Secondary Research ......................................................................................................................46
Recommendations......................................................................................................................48
Conclusion...................................................................................................................................50
References....................................................................................................................................51
Appendix .....................................................................................................................................52
A) Online Survey................................................................................................................................52
B) Interview Questions for Travel Agents.....................................................................................64
C) Real Tourism Output: U.S. Bureau of Economic Analysis....................................................65
D) Travel Leader’s Price Guide........................................................................................................66

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Executive Summary
With the expansion of the Internet, many businesses have found it increasingly difficult to
compete with online companies. This holds especially true for travel agencies across the United
States. The number of travel agencies has decreased a significant amount as the number of
online travel booking sites has increased. The purpose of this research project is to compare the
viability of the current travel agency business model to that of online travel booking and
discover how the travel agency business model can be improved to compete more effectively
with online travel booking sites.
In order to gain insight to the current travel agency business model, interviews were conducted
at travel agencies in the Minnesota Twin Cities Area and in Moline, Illinois. A survey was also
sent out to Concordia University, Saint Paul students, staff, and faculty, as well as family,
friends, and acquaintances of group researchers, with the intention to survey those who have
traveled within the last year. A total of 672 individuals took the survey on traveling, with
74.55% of those qualifying to take the full survey.
An analysis of both surveys and interviews was conducted to evaluate client and agent
responses. It was discovered that different age cohorts have different perceptions towards travel
agencies. There is also a general lack of knowledge about the services and prices offered
through travel agencies. Those surveyed expressed a concern with the time and convenience
required to book through a travel agency, as well as a concern with relationship development
between clients and agents.
Recommendations were formulated based on the responses from the surveys and interviews.
The following are recommendations to improve the business model of travel agencies:
1. Reposition the perception of travel agencies in the eyes of customers.
2. Research and market to each age cohort based on the unique characteristics of the
generation.
3. Develop a strong relationship with clients through the implementation of technology in order
to eliminate concerns with time and convenience.
Through the appliance of the recommendations, which are based on extensive research, travel
agencies have the potential to gain a higher percentage of customers and improve the current
business model in order to more effectively compete with online travel booking sites.

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Background
Within the last 100 years, there have been advancements in machinery and technology that have
revolutionized the way that humans live. Automobiles and airplanes have become common
means of transportation, and the Internet has allowed access to information through the simple
click of a button. The effects of these inventions are such that businesses must adapt to ever
changing and advancing technologies in order to keep up with the new desires, demands, and
expectations of consumers. At one point in time, it was common to load the kids in the car, grab
a map, and set out for the Grand Canyon. That tradition shifted to the utilizing of travel
agencies to book the perfect family vacation. With the Internet becoming ubiquitous in the
United States, travel booking sites have sprouted across the vast field of the World Wide Web,
allowing travelers to book their trips online without leaving home.
In light of this technological revolution, it appears that travel agencies are being choked out of
existence by the ever-growing online travel booking sites. According to Rebecca Weber, travel
analyst for CNN, there are only 13,000 travel retail locations currently in the U.S in comparison
to 34,000 locations in the 1990s (Weber, 2013.) Another report from the Bureau of Labor
Statistics found that in 2012, there were 64,680 full time travel agents whereas in 2002, there
were 95,360 (Kennerly, 2014). This dramatic decrease in travel agencies and agents can be
correlated to the increase of users on Internet travel sites such as Kayak and Expedia. According
to website trafficking analysis site Alexa.com, Expedia.com has 25 million unique visitors each
month and Kayak has 13 million unique visitors each month (Competitive Intelligence, 2014.)
Unfortunately for travel agencies, the Internet and its users are not going anywhere; the
problem will only grow. Social media and travel applications are expected to continue to
whittle away at the remaining agency market share.
Businesses must be ever adapting and evolving in order to keep up with competition and
consumer demands. The moment a business becomes obsolete and archaic is the moment that
business dies. For businesses that are primarily based on service, it can be especially difficult to
compete when technology replaces human interaction with online services. This is particularly
true for travel agencies as attempts are made to compete with the ever growing and increasing
online travel booking sites. Although there are still some travel categories such as luxurious
vacations or corporate trips in which utilizing a travel agent is preferred, it is still vital for travel
agencies to try and regain customers from online travel sites.

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Objective
The purpose of this study is to gain knowledge and insight of the travel industry. Specifically,
this study will attempt to discover traveler preferences and explore options as to how travel
agencies can gain a larger market share of the industry. To achieve this, the following question
must be posed and answered: Compared to a growing trend in online travel booking, what is
the viability of the current travel agency model and how can it be improved to compete with
online travel booking sites?
Population Description
When considering the population for this study, it was concluded that there are three distinct
populations that need to be surveyed and interviewed. These population groups were selected
because of the influence and potential aide each contributed to the process of solving the
objective. The population therefore will include those who book tickets online, those who book
tickets through a travel agency, and travel agents.
The desired population is as follows:
United States travelers who have traveled by flight or cruise within the last year
Travel can either be foreign or domestic
There is no bias on demographics including age, gender, income and ethnicity so that
correlations can be drawn between specific cohorts and travel preferences
Travel agents who are currently involved in the travel industry
Sample Selection
Three sampling techniques were chosen for this study: theoretical, purposive and convenience
sampling. Theoretical sampling starts from theories made based on previous published
information about travel agencies. The theoretical sample will put these assumptions to the test
by designing the survey questions to let the participants confirm whether the initial theories are
right or wrong.
Purposive sampling, which relies on the judgment of researchers to select the population of the
sample, will be used to choose the survey participants. This is due to the specific traveler
population needed to solve the objective. Therefore, travelers that use the Internet to book trips
as well as those who use travel agencies will be surveyed. Finally, convenience sampling will be
utilized to find candidates to fit the population. Convenience sampling selects participants
based on the proximity and convenience of the researcher. With this in mind, the survey was
issued to students, faculty and staff of Concordia University in St. Paul as well as family,
friends, and acquaintances of group researchers. Also, travel agents were interviewed based on
the location of the agency in relation to the researcher’s living arrangements.

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Research and Design
A) Methodologies
In order to facilitate exploratory research requirements, group research members emailed and
phoned travel agents to organize interviews. One member made several phone calls and
messages to four local travel agencies in the Maple Grove area with two responding with
interest and one responding beyond the deadline for information collection period. Two other
members telephoned the first two travel agencies listed on a Google search of “Travel agencies
in Woodbury, Minnesota.” Both agencies responded with enthusiasm and support of the
research assignment allowing interview dates to be set. The remaining members used personal
connections for the interviews located at The Best Travel Agency in Moline, Illinois as well as
CTS with Amy Mohamed.
The selected travel agents ranged from 6-22 years of experience in the industry and were in
various departments and positions including owners, managers, and department associates.
In regards to the survey, marketing chair and Professor Dr. Harrower provided an email list of
all current students, faculty, and staff. The survey was then developed through the survey
construction website, Survey Monkey, which allowed the facilitation of all responses as well as
in-depth view of the data collected. The survey was then sent to the provided email list on
Friday, November 14th 2014 and was closed on Monday, November 24th 2014. Additional
surveys were broadcasted by research members on social media sites such as Facebook and
Twitter and were also sent to personal contacts via email. To entice respondents to complete the
entire survey, incentives were provided in the form of a chance to win one of two Target gift
cards for ten dollars.
B) Limitations
Although the process of the study was mainly positive, there were a few limitations experience
in the course of research. The limitations faced are as follows:
No other email list was used other than the one provided by Dr. Harrower
The survey was only open for ten days with no guarantee that potential respondents
would see and reply to it within that timeframe
Some surveys were incomplete with open ended questions not answered fully
25.45% of respondents did not qualify for the survey
A Travel Agency responded one week after asking for interviews, deadline to collect
information was over.
One travel agent refused to be recorded

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Data Analysis
A) Survey
To learn more about the tendencies and preferences of travelers, a survey was developed and
sent to Concordia St. Paul students, faculty, and staff members, as well as family, friends, and
acquaintances of group researchers. With 672 respondents, the following charts reflect the given
responses.
Question #1
This question was used to eliminate respondents that did not meet the population
requirements. If the respondent did not travel by air or by cruise within the last year, they were
disqualified from the rest of the survey. The results show that most of the population traveled at
least once during that period. The purpose of this question was to assess whether the
information provided is based on recent information.

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Question #2
Question number two was used to separate the population into two groups, online travel site
users and travel agency users. This allowed further analysis to be developed because
correlations could be drawn between the responses of the user and the group they
encompassed.

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Online Travel Site Users
Question #3
In this chart, the main reasons that caused the population to choose online bookings are
clarified. People want to book trips easily and rapidly without having to pay travel agent fees.
Also, travelers prefer to have more control over booking choices.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Why did you choose to book online? (check all
that apply)

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Question #4
The results show that most of the survey’s population traveled for pleasure and not for
business.
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
Business
Pleasure
What was the primary purpose of your last trip?

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Question #5
This chart shows that more than half of the population traveled only once or twice during the
year preceding the survey. It is interesting to note that almost 20 percent of the population did
however travel over five times.
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
1
2
3
4
5+
How many times within the last year did you travel by
air or on a cruise?

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Question #6
This chart reveals the money spent by travelers among the population on travel services,
lodging and entertainment during their trips. Most of the travelers spent less than $3,000.
<$1,000
35%
$1,001 – $2,000
28%
$2,001 - $3,000
16%
$3,001 - $4,000
9%
$4,001 – $5,000
4%
$5,001 - $6,000
2%
$6,001 +
6%
APPROXIMATELY, WHAT WAS THE TOTAL SPENT ON
YOUR LAST TRIP? (INCLUDES TICKETS, LODGING,
OTHER TRANSPORTATION, ENTERTAINMENT, ETC.)

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Question #7
Results demonstrated by this chart show that about 96% of the population suffered little to no
stress during booking of trips.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
No Stress Some Stress Stressed Very Stressed
What was your stress level while booking your last
trip?

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Question #8
The results show that most of the travelers did not spend more than a couple of hours booking a
trip.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Less than 1 Hour 1-2 Hours 2-3 Hours Over 3 Hours
How much time did you spend booking your last
trip?

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Question #9
The results have indicated that almost all the travelers were satisfied through the previous
booking experiences.
Yes
96%
No
4%
WERE YOU SATISFIED WITH THE BOOKING OF
YOUR LAST TRIP?

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Question #10
Top five common responses:
1. It was easy to use
2. Able to control all aspects of trip
3. Booked trip for cheap price
4. Convenient to use online services
5. Did not take a lot of time
Top five quotes from responses:
1. “Easy, cheap, convenient, comparable and efficient.”
2. “It was simple and easy to do from the convenience of my own home. I was able to keep
searching until I came up with a price that I liked. We felt we got the best deal we could.
We were able to explore our options as far as airlines and prices and felt in control of our
trip.”
3. “I am very busy. The time that I had available to book the trip was very late at night. No
travel agencies are open at that time. I could then print everything off at my
convenience.”
4. “Used the same site as I have in the past. They have all my personal data store and flight
preference as well as billing information. After picking out a flight that fits my time, it
literally takes less than a minute to complete the required info.”
5. “We were in charge of the choices we made. We saved money compared to what was
quoted at the travel agent.”

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Question #11
Top Responses
1. More flight options
2. Elimination of variable pricing between the various agencies that are booking for the
same flight on the same airlines
3. No false advertising
4. Cheaper ticket prices
5. Less fees after booking
6. Show other dates/prices
7. More available dates for planning
8. Easier to use
9. More tools to compare the flight cost on different days
10. Calendar with prices for every booking site
11. Cancel and fix errors online
12. Being able to see if price was expected to go down or not
13. Have pop up videos and written steps on how to make the arrangements needed
throughout the booking process
14. Accurate ticket availability display
15. More reviews
16. Send flight change updates
17. Save search history
18. Easier to speak over phone
19. Notify if price drop
20. Being able to use reward miles
21. Descriptive baggage fee prices

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Question #12
This chart shows that only about 20% of travelers intend to use a travel agency for the next
booking. It also shows that about 30% of travelers are open to the idea of travel agents.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Yes No Uncertain
Would you consider using a travel agency instead of
booking online for your next trip?

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Question #13
1. If the price is reasonable/comparable to online sites
2. If it was very easier
3. If there was little to no service fee
4. If there was a complex trip to coordinate
5. If the destination was new to the traveler
1. “I might use an agency if I thought I would get better prices on flights and hotels.”
2. “I have in the past. It is very easy - tell them what you want and they book it all. Just
more expensive.”
3. “It’s about the price. If they can find excellent flights and maybe have the ability to use
purchasing power, I would definitely use them. I would not use them for the same price
plus fees for the same flights.”
4. “For overseas travel to countries (especially those that are not commonly frequented by
tourists) I think it’s good to have one person you can connect with if there are issues;
otherwise, it’s not worth the cost.”
5. “If it was for pleasure, and had multiple components. For one trip this year I did and it
went well. They helped with the actual on-site activities; I still booked the air online
myself.”

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Question #14
The survey data reveals that most of the participants were females.
Male (29.4%)
Female (70.6%)
WHAT IS YOUR GENDER?

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Question #15
The survey data shows that almost 60% of the survey participants are 34 years of age or
younger. The largest single age group was that between 25 and 34 years old. This age group is
defined as Generation Y.
25.7%
34.0%
15.3% 14.4%
10.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
18-24 25-34 35-44 45-54 55+
What is your age?

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Question #16
About 74% of the participants were either dating or married.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Single Dating Married Widowed
What is your relationship status?

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Question #17
This chart helps to understand the demographics of the respondents in a stronger way. Since
the vast majority of the respondents were Concordia University’s staff and students; the
majority of respondents were in education positions or in training.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Agriculture
Arts
Communication
Sales,Retail
Government,PublicService
Education,Training
Hospitality,Tourism,FoodService
Manufacturing,Architecture,Construction
Student
Hospital,Medical
InformationTechnology
BusinessProfessional
HealthScience
Science,Engineering,Mathematics
HumanServices
Law,PublicSafety
What is your profession?

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Question #18
This graph illustrates the household incomes of the survey takers. Most of the survey
population earns less than a $150,000 annually. The largest bracket includes participants that
make less than $50,000 every year.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
What is approximately your annual household
income?

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Question #19
This chart shows that 62% of the survey population does not have any children.
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Not Applicable
1
2
3
4
5+
Please check the amount of children you have.

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Travel Agency Users
Question #3
Out of the different reasons that drove some participants to use travel agents; convenience was
the strongest reason with about 47% of the responses.
0.0% 5.0% 10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%
Easy to use
Convenient
Travel agency service provided by employer
Cost effective
Less time to accomplish
It was recommended
More control over outcome
Why did you choose to book through
a travel agency? (check all that apply)

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Question #4
This pie chart shows that the majority of the travel agency customers surveyed were traveling
for pleasure.
Business
29%
Pleasure
71%
WHAT WAS THE PRIMARY PURPOSE OF YOUR
LAST TRIP?

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Question #5
About 94% of participants that used travel agencies are not frequent travelers.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
1 2 3 4 5+
How many times within the last year did you
travel by air or on a cruise?

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Question #6
When the results in this chart are compared to the corresponding spending chart of online site
bookers; the data shows that travel agency customers spend more on travel then online travel
site customers. While only 37% of Internet booking participants spent more than $2,000 on their
last trip; 74% of those who preferred travel agency booking exceeded that amount.
<$1,000
16%
$1,001 – $2,000
10%
$2,001 - $3,000
33%
$3,001 - $4,000
19%
$4,001 – $5,000
4%
$5,001 - $6,000
2%
$6,001 +
16%
APPROXIMATELY, WHAT WAS THE TOTAL SPENT
ON YOUR LAST TRIP? (INCLUDES TICKETS,
LODGING, OTHER TRANSPORTATION,
ENTERTAINMENT, ETC.)

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Question #7
The results presented in this chart show that the stress levels are similar for both methods of
booking. Both online site and travel agency customers do not suffer high stress levels while
making travel arrangements.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
No Stress Some Stress Stressed Very Stressed
What was your stress level while booking your
last trip?

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Question #8
Travelers spend less time booking trips through Internet websites than those who book through
travel agencies. 49% of online booking site customers spend less than an hour booking trips as
compared to 33% of participants spending the same time using travel agency booking services.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Less than 1 Hour 1-2 Hours 2-3 Hours Over 3 Hours
How much time did you spend booking your
last trip?

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Question #9
This chart indicates that 92% of participants using travel agencies are satisfied with the booking
of the last trip. That percentage was 96% for Internet booking customers. Although both results
indicate high levels of satisfaction; Internet booking was slightly better.
92%
8%
WERE YOU SATISFIED WITH THE BOOKING OF YOUR
LAST TRIP?

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Question #10
1. Everything went as planned
2. Easy and convenient
3. Agency was very knowledgeable
4. Didn’t have to worry
5. It was booked through employer
1. “No surprises, everything was well explained and documented, was able to book the trip we
wanted without having to do all the research and tracking of process on our own. This agency
guaranteed a reduction in the price if a promotion came up from the cruise line prior to
departure, and when we received a sale flyer, we contacted the and received an immediate
refund of $300.”
2. “Made all the arrangements for us and had connections on finding a travel guide for us.
Didn'ʹt have to worry about making any arrangements.”
3. “The travel agency never updated their apple book. So we were flying to Cozumel, Mexico
and our resort went from a 5 star to a 2 star and the agency never mentioned it to us. It went
under new ownership.”
4. “Transportation to and from the airport was set up, so we did not have to worry about setting
it up once there.”
5. “Information provided by travel agent was excellent, accurate, and effective.”

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Question #11
1. Less waiting
2. More details about the trip
3. More personal contact
4. More services
5. Listening more to customer wants
1. “They should be well informed on the changes for the resorts and hotels. They should listen
to what each customer wants.”
2. “Slow with communication to actually book a flight and the price went up about $500 a day
later after we had wanted to book.”
3. “We had a great experience overall, more advice on when and how to get through the airport
would have been helpful.”
4. “Promote companies and services. I don'ʹt know of any travel agencies that offer trips to
individuals. I only know of large group travels.”
5. “Make sure wait times are low (or offer a call-back feature so you're not on hold for a long
period of time).”

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Question #12
More than 55% of travel agency customers would consider using online services for their next
booking. It should be noted that 10% of this population would not consider using an online site
for the next trip.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Yes No Uncertain
Would you consider using an online site
instead of booking through a travel agent for
your next trip?

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Question #13
1. If I wasn’t booking for a large group
2. If it was cheaper
3. If desired travel was in the U.S for the next trip
4. Would like to have more control
5. If it would be more convenient
1. “We only used a travel agency because it was our honeymoon and we wanted the least
amount of stress as possible. In the past we have used online sites and been satisfied.”
2. “If it is easy to get around in the site and my questions are answered, I would have no
problem online.”
3. “Personal. Yes. Business, No.”
4. “If not international, I don'ʹt need travel agent help.”
5. “Depends on the deals offered.”

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Question #14
The percentage of male to female online booking participants is very similar to that of travel
agency customers. 75% of the travelers that preferred travel agencies to online booking were
female.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Male Female
What is your gender?

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Question #15
35% of the participants that prefer travel agencies are between 18 and 24 years old. This age
group is defined as Generation Y.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
18-24 25-34 35-44 45-54 55+
What is your age?

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Question #16
This chart shows that the percentage of people dating is higher by approximately eight percent
for survey respondents preferring travel agencies that it is for those who prefer online booking.
On the other hand; the percentage of married people that prefer Internet booking is higher by
about five percent than it is for those who prefer travel agencies.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Single Dating Married Widowed
What is your relationship status?

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Question #17
The data in this chart indicates that the decisions of customers on whether to use Internet or
travel agency booking were not significantly affected by the participant’s occupation. A notable
difference though; is that while the percentage of people with jobs in education was 35% for
travel agency bookings, that percentage was 43% for Internet bookings.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Agriculture
Arts
Communication
Sales,Retail
Government,PublicService
Education,Training
Hospitality,Tourism,FoodService
Manufacturing,Architecture,Construction
Student
Hospital,Medical
InformationTechnology
BusinessProfessional
HealthScience
Science,Engineering,Mathematics
HumanServices
Law,PublicSafety
Prefernottoanswer
What is your profession?

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Question #18
This chart shows that the household incomes of travel agency customers exceed those of
Internet booking customers. In the group preferring travel agencies; 35% of the households
made less than $50,000 annually while that percentage was 31%. On the other hand; 27% of the
travel agency households made between 75 and a 100 thousand dollars annually while that
percentage was 15% for Internet booking websites.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
<$50,000
$50,001-$75,000
$75,001-$100,000
$100,001-$150,000
>$150,000
What is approximately your annual household
income?

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Question #19
58.3% of the group that booked at travel agencies did not have children while that percentage
was 61.8% for participants that preferred to book over the Internet.
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Not Applicable
1
2
3
4+
Do you have any children? If so, how many?

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B) Interviews
To gain a better understanding of the travel industry, nine interviews were conducted with
travel agents in Minnesota and Illinois in order to learn more about the agency clientele, the
agency perspective on the current business model in comparison to the past model where
online sites were not prevalent, and the agency feedback that has been received from past and
current customers. The following are summaries of the results from all nine interviews.
Which type of transaction is the most common service performed at your agency? Group
travel, multiple city travel destinations, cruise ships with air travel etc.?
Many agencies offer both business and leisure travel services with separate departments that
specialize in each service. The business department of the agencies assists only business
transactions and business clients. Leisure departments have a high frequency of groups and
destination weddings as well as families and packages. Therefore, leisure departments have a
larger variety of transactions.
What are the most common types of customers you have? Business travelers, families,
couples, males, females, younger, Baby Boomers?
Those interviewed in the business department saw mainly business clients. Those interviewed
in the leisure department saw a larger, more varied range of clients. The most common type of
clients found in the leisure department are groups and couples. Couples who are planning a
destination wedding tend to frequent travel agencies for booking and planning. Groups that
need a lot of coordinating also tend to be common customers at travel agencies. In regards to
gender, women are more commonly found at agencies as customers compared to men. Owner
of The Best Travel Agency in Moline, Illinois, Connie Van Tieghem says, “Even if the woman is
not signing the check, they’re the ones making all of the travel plans.”
Tell me about the amounts of time and money spent here on booking.
The business department has a very steady amount of business, with most planning and
transactions taking place on the phone and by email. According to Connie Van Tieghem,
“Travel is the third largest corporate expense for most companies.”
Many leisure departments find the dollar amount spent per booking averaged $3,000-$4,000.
The more elaborate the trip, the more time and money is spent at the agency. For a couple
(excluding destination weddings), about an hour is spent at the agency with a few follow up
phone calls and emails.

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What is the target market for your travel agency? Why is this market a good target for your
agency?
Most agents feel that all travelers can find value in travel agencies, regardless of age,
demographics, and income. The Best Travel Agency defined couples aged 40 or older with an
annual income of $80,000-$100,000 as a good target market due to a higher disposable income
and the desire to have an authentic travel experience without being too concerned with the
price.
What is the stress level of customers while they’re here?
Stress levels vary from person to person but clients at a travel agency typically “come in
stressed from booking online and stress decreases when here at the agency,” according to Nora
Blum, the certified travel specialist and marketing manager at Travel Leaders Maple Grove
office. Clients have the comfort of knowing that the main purpose of agents is to alleviate stress
and help with frustrating booking details.
Tell me about a time a customer really found value in your travel agency service.
Many customers who have had problems while traveling have found value and satisfaction in
the travel agency service. Corrections can immediately be made to any errors and emergencies
that occur to the traveler. Customers who book online do not have access to such a support
system.
Conversely, do you remember a time a customer expressed dissatisfaction and why?
Dissatisfaction usually occurs when customer expectations and reality are dissonant. Agents
attempt to bridge that gap by having knowledge and experience, but there will always be those
who cannot be fully pleased. Beth Roth, manager of the leisure department at The Best Travel
Agency recalls, “One client blamed the agency because it rained.”
What are your views on online booking sites? What have customers said about them to you?
Have you used them?
In general, agents have a favorable opinion of booking sites for very short trips and emergency
situations with many agents also utilizing online booking sites for these purposes. Agents also
appreciate when clients have looked at sites before coming to the agency because those
customers are usually more specific with destination desires. However, agents are aware that
online booking sites do not give the final price of the trip until the very end of the transaction
and often neglect to mention transfers and transfer fees. Online booking sites do not offer much

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customer support and there can be an overwhelming amount of clutter, causing confusion and
stress to the customer. With travel agencies, there is more security that the client will get what
was paid for and the option for more deals and discounts. Ultimately, online booking sites are
viewed as a price comparison tool.
How was the travel agency business model affected with the rise of online booking sites?
With the rise of online booking sites, many small agencies have consolidated or shut down.
Many more agents have also opted to work from home, meaning there are fewer storefronts.
This does allow agents more time to work on larger and more complex groups. However, many
clients have a do-it-yourself attitude and according to Sheree Powers, owner of Travel by
Nelson Ltd., “Travel agencies now have to win over the customer and prove the agency can
greatly assist them with their travel needs.”
What are some of the challenges of competing with online booking sites?
With online booking sites, travelers have the opportunity to research flights and destinations
almost instantaneously. Prices and times can be browsed at the leisure of the client, no
appointment necessary. Customers compare prices on online booking sites and also compare
prices to travel agencies. Most clients are not aware that travel agencies offer price matching to
online booking sites, which makes competing with online booking sites difficult.
How can Travel Agencies improve their business model to gain more clients?
Specialization was mentioned by two different agencies as a method to improve the agency
business model. If agents in the leisure department specialize in a specific area, such as
destination weddings or European travel, agents will be able to provide expertise and efficiency
for clients. Agents also felt that finding ways to reach target markets as well as communicating
agency benefits effectively will improve the business model. The younger generations seem to
be difficult for agencies to reach.

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C) Secondary Research
Upon analysis of question #15 regarding the age of the respondents, it became apparent that
further research must be conducted to better understand how to reach each age cohort through
marketing strategies and tactics. The most predominant age groups were travelers aged 25-34.
However it can be noted that there was a wide range of ages represented in the survey. With
this in mind, identifying and understanding the target market is a crucial decision in
advertising and promoting service generated businesses. Advertisers commonly define a target
audience based on several criteria including demographics and psychographic characteristics,
which includes lifestyles, attitudes and behaviors (Hawkins & Mothersbaugh, 2013).
Each generation has unique expectations, experiences, generational history, lifestyles, values,
demographics, and psychographics that influence purchasing behaviors. Accordingly, many
companies are reaching out to each age cohort in attempts to understand and gain the attention
of these diverse buyers. Multi-generational marketing is the practice of appealing to the unique
needs and behaviors of individuals within more than one specific age cohort or generational
group, with a generation being a group of individuals born and living at about the same time.
This means that marketers for the travel agency industry would need to understand three U.S.
generations: Baby Boomers, Generation X, and Generation Y.
Marketing to these specific generations requires an understanding and strategy appropriate to
each generation’s behaviors and characteristics, focusing primarily on how to communicate the
benefits and values of using a travel agency. The following recommendations for Baby Boomers
would be to focus on building value, being flexible, and producing options with the travel
agency. If Baby Boomers feel they are getting superior service at a good value, price sensitivity
decreases for this age group. A major concern for Baby Boomers is health due to ageing;
however it is imperative to note that Baby Boomers do not like to be reminded of this fact.
Marketing and interactions with this generation need to replace words including senior citizens,
golden years, retirees, and age related phrases such as “Prime time of Life” with less sensitive
options. Travel agents should market to Baby Boomers with travel adventure packages, music,
or vineyard based travel as their focus is indicating the “Me Generation,” entitling this
generation to the good life (Hawkins & Mothersbaugh, 2013).
Some marketing considerations for Generation X would be to enhance the attitude and lifestyle
characteristics that greatly influence this age cohort. This includes balancing a family, work, and
a personal life. Generation X members work to live, not live to work, compared to the Baby
Boomer friends before them. Generation X is a practical and price conscious generation that
wants to know the features of a product or service and why that specific feature is necessary.
Travel agencies must know that this generation responds to honesty, candor, and
straightforward facts. Information overload and accessibility is needed to educate this group
into buying. Generation X responds to the recommendations of peers, word of mouth reviews,
and social gatherings (Hawkins & Mothersbaugh, 2013.)

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Marketers aiming for Generation Y need to first know that this generation is self-reliant and
self-absorbed with a very strong sense of autonomy and independence (Hawkins &
Mothersbaugh, 2013.) This group is wise and well grounded, and was born into an advanced
technological, wireless, and electronic society. Generation Y has significant respect for ethnic
and cultural diversity and a heightened social awareness. In order to succeed in marketing to
Generation Y, a plan is needed to attract this group at an early stage and gain its loyalty to the
travel agency industry. Generation Y is strongly attracted to the experience which makes for a
perfect fit to this industry. Marketing campaigns need to focus on uniqueness, honesty, humor,
and information with ethnic and cultural diversity imploring an image driven message.
Generation Y responds well to e-mail, voice-mail, the Internet, multi-media, direct mail
catalogs, magazines, college and high school newspapers, websites, school-based media boards,
college guides, and sponsored on- and off-campus events (Hawkins & Mothersbaugh, 2013.)

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Recommendations
The business objective identified as well as the recommendations given for travel agencies,
primarily deal with multi-generational marketing techniques.
However, convenience sampling and descriptive data collection identified three major
generations that are currently using travel agencies, Baby Boomers, Generation X, and
Generation Y. The marketing strategy for travel agencies would be to learn the different
characteristics and behavior patterns of each generation. With this in mind, three
recommendations were developed to improve the business model of travel agencies.
1. Reposition the perception of travel agencies in the eyes of customers. Repositioning can occur
by:
Travel Agencies need to sell the experience. This is done by through the emphasis that
the travel agent is working for the client, the client’s family, and working for the clients
personal best interests
A Marketing Promotional Campaign can emphasize that travel agents are experienced
and specialize in all facets of leisure and business travel, including air, hotel, cruise, and
wedding destinations
Travel agents also specialize in the locations and destinations for personal, business and
family entertainment
Travel agents can help during the transaction with travel problems and after arrival to
hotel locations versus online booking
Client reviews help drive business, need to implement a plan to have customers submit
reviews of trips to encourage use of travel agency versus online booking
Price match guarantee
Be transparent with all possible and additional fees
2. Research and market to each age cohort based on the unique characteristics of the generation
by:
Referral based recommendations, word of mouth marketing plan to enhance business
Social media promotion, Skype promotion, ‘live chat’ computer transactions
Extended agency hours, 24-hour emergency contact for leisure travelers
Travel agency service with open computers with agents versus a closed system to
customers
Target each age cohort individually
3. Develop a strong relationship with clients through the implementation of technology in order
to eliminate concerns with time and convenience. This could be done by the following scenario:

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In addition to reaching different age cohorts through different mediums, there are also
programs that agencies can develop and implement in order to increase and retain the number
of clients.
For instance, many travelers site the reasoning for not using travel agencies due to the
accessibility to information online and the preference to exercise control over price comparison
and outcomes. One way to fulfill this customer desire would be to invest in a software
application that allows an individual to create a travel package, similar to the way consumers
are able to build a customizable vehicle through Subaru or Chevrolet. Just as a customer can
select vehicle make, model, and color, the application would allow clients to have the control to
explore travel options while adhering to a specific budget, destination, and time frame from the
comfort of home. Limitations would arise when an option that a client desires is not available or
when confusion is experienced by the client. For example, if a customer desires to travel to
Panama yet that destination is not listed, the customer will immediately look elsewhere.
Similarly, if a customer becomes confused with the process, it is more than likely the customer
will give up or look elsewhere. In order to remedy these limitations, a live-chat option with a
travel agent could be put into effect. Having a live-chat option would allow travel agents to
help solve client questions and concerns as incurred. Live-chat would also help build
relationships with customers without the stress of finding a time to meet at the brick and mortar
agency.
By properly marketing to the Baby Boomer, X, and Y Generations and utilizing software
applications, travel agencies can shift customer perception and develop solid relationships with
clients, which are paramount to the success of the travel agency industry.

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Conclusion
The objective of this study was to research the viability of the current travel agency model in
comparison to the growing amount of online travel booking sites and what travel agencies can
improve to compete with these sites. To achieve this, a survey was developed and sent to
Concordia St. Paul students, faculty and staff members, as well as extended friends and family
of the researchers. Interviews were then conducted with travel agents, travel agency users and
online travel site users to further learn the psychographics involved with booking a business or
leisure trip. After analyzing these results, the conclusion was made that travel agencies can
improve the current business model by altering the current marketing strategy. This can be
accomplished by properly addressing each age cohort with specific advertisements tailored to
the characteristics of each generation. Also, a stronger relationship with clientele can be
achieved through the implementation of technology to make the travel planning process more
convenient. Finally, the perception of travel agencies must be repositioned in the mind of the
consumer to eliminate misconceptions of the available services, prices and fees. Through the
aforementioned recommendations, travel agencies have the potential to expand and improve
the current business model, therefore increasing business, and enhancing customer
relationships.

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References
Competitive Intelligence. (2014). expedia.com Site Overview. Retrieved October 22, 2014, from
http://www.alexa.com/siteinfo/expedia.com
Competitive Intelligence. (2014). kayak.com Site Overview. Retrieved October 23, 2014, from
http://www.alexa.com/siteinfo/kayak.com
Hawkins, D., & Mothersbaugh, D. (2013). Consumer behavior: Building marketing strategy (12th
ed.). New York: McGraw-Hill Irwin.
Kennerly, B. (2014, January 14). Travel agents back in demand. Retrieved October 23, 2014, from
http://www.usatoday.com/story/travel/2014/01/14/travel-agent-booking/4474853/
Top 15 Most Popular Travel Websites | October 2014. (n.d.). Top 15 Most Popular Travel Websites
| October 2014. Retrieved October 23, 2014, from
http://www.ebizmba.com/articles/travel-websites
Travel Agents. (2014, April 1). Retrieved November 6, 2014, from
http://www.bls.gov/oes/current/oes413041.htm
Travel Agents. (2010, July 1). Retrieved November 9, 2014, from
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Appendix
Appendix A) Online Survey

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Appendix B) Interview Questions for Travel Agents
1. Which type of transaction is the most common service performed at your agency? eg. Group
travel, multiple city travel destinations, cruise ships with air travel etc.?
2. What are the most common types of customers you have? Business travelers, families,
couples, males, females, younger, Baby Boomers?
3. Tell me about the amounts of time and money spent here on booking.
4. What is the target market for your travel agency? Why is this market a good target for your
agency?
5. What is the stress level of customers while they’re here?
6. Tell me about a time a customer really found value in your travel agency service.
7. Conversely, do you remember a time a customer expressed dissatisfaction and why?
8. What are your views on online booking sites? What have customers said about them to you?
Have you used them?
9. How was the travel agency business model affected with the rise of online booking sites?
10. What are some of the challenges of competing with online booking sites?
11. How can Travel Agencies improve their business model to gain more clients?

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Appendix C) Real Tourism Output: U.S. Bureau of Economic Analysis

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Appendix D) Travel Leader’s Price Guide
All professional fees are listed per person unless otherwise noted.
Please ask your travel consultant about specific fees for your upcoming trip.
Airline Tickets
Domestic $30.00
International $50.00
Void/Refund/Exchange $30.00
Frequent Flyer/Points/Rewards Starting from $40.00
Vacation Packages
Airfare/Hotel or Airfare/Car rental $20.00
Touring or Guided (per room) $50.00
Cruise vacation (per stateroom) $50.00
Independent Travel (per booking)
Hotel reservations $20.00
Rail reservations $20.00
Sightseeing or activities reservations $20.00
Car rental or transfers reservations $20.00
Domestic Multi destination trips Starting from $100.00
International Multi-destination trips
Depending on the number of destinations or
length and complexity of trip
Starting from $150.00
Other Services
Travel Insurance $20.00
Accounting Record Research $30.00
Fed Ex Overnight Delivery Starting from $20.00
Visa services
Not including consular entry fees or visa processing
fees. Will depend on countries visited and urgency of
request. Starting from $50.00

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