Comment: The man in the middle can flourish in the digital age

Comment: The man in the middle can flourish in the digital age

No travel agent needs reminding how the advance of the internet over the last decade has represented a huge challenge to their business.

Certainly, incredible advances in digital technology have done much to fuel the process of disintermediation by potentially putting the supplier in closer contact to the consumer.

But it would be a mistake to think that this is some sort of zero sum game and there is an increasingly dwindling pond for the middle men in the industry to drink from.

Despite appearances, the web has an unerring tendency not to rip up old ways of doing things but to reinvent them and while doing so making them sound new and exotic by inventing its own jargon.

So for travel agents offline, read affiliates online. If you are a supplier affiliates are people you pay a commission when they make a sale, who you support with sales collateral and training.

Yes, affiliates work on different, and generally less generous looking remuneration packages, and they don’t own the customer like traditional agents do.

But larger volumes gazump higher percentage per booking payments and for many travel firms affiliates are playing an increasingly important role in driving bookings.

Speaking at last week’s first ever Affiiates4u PerformanceIN Travel & Leisure conference in London Low Cost Travel Group chief executive Paul Evans said this:

“Affiliates are a growing part of everyone’s business. It’s gone from nowhere in two years to be a really important channel for us.

“The reason we like affiliates, and travel agents, is we are in this together they actually share the risk with us. We like that model and we are actually doing very well out of it.”

There’s no doubt the online affiliate sector has changed and is still evolving - cashback and voucher code incentive sites have come to dominate during the economic downturn, for instance.

But affiliates take all different shapes and sizes from the large price comparison sites at one end to some really niche content websites, focusing on a single destination or holiday type, at the other.

Evans advised all travel firms to take advantage of this by spreading their risk and not creating dependencies on any single business partner.

And he warned against making the mistake of believing you can do everything yourself.

“This business is so big that nobody can have everything. You compete, you collaborate, you work with people.

“Some of our biggest suppliers are our main competitors. You cannot be the best at everything, it’s not possible. I would encourage people in business life to collaborate.”

This increased focus on partnership was something Skyscanner head of market development Jennifer Herbison also alluded to:

“We do not feel like an affiliate any more, we feel more like a partner. We have information that we can feed back to the airlines.”

And, echoing countless addresses given to traditional travel agency conferences down the years, Alicia Iveson, account director at digital media agency Neo@Ogilvy, added:

“Everything we do is about facilitating performance and it’s our job to make sure they [the affiliates] are getting all they want.”

Had there been any traditional travel agents in the room none of this would have sounded unfamiliar.

The question for them is are they recognising the potential in this area or are they allowing a new breed of digital savvy middle men to do the job online they excel at doing offline.

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