Steve Rushton, co-founder of Net Effect.
In recent years there’s no hiding the fact that high street agents have struggled to compete against online rivals.
With over 90% of travel research starting online the consumer has been ‘educated’ into believing that the best deals are to be found there.
But as the online travel arena becomes more crowded and margins tighter it has become evident just how the public is being hoodwinked into believing they have found the cheapest deal online and this is often not the case.
The example below demonstrates exactly this point.
Take a site such as fly.co.uk which I came across in search results on cheapflights.co.uk.
Having tried to book a flight recently to Malta (£275 return each for two travellers) using this gateway, the ‘hidden charges’ amounted to much more than any high street agent would charge.
What websites such as fly.co.uk have done is effectively try to ‘hide’ their charges and rely on consumers not spotting what is going on.
I only spotted the charges because I have a head for numbers, as they only ‘magically’ appear once your comparison search is complete and you start to enter your credit card details.
In the transaction mentioned above the charges amounted to an extra £21.07 each way for every passenger and with only an option to pay by credit card an extra £28 charge for this.
For my booking for two persons this amounted to a £112 ‘charge’, unrelated to the actual flight.
To be honest, budget flights aren’t the best area of business for high street agents but most do offer a service and charge an admin fee of £25 to book the flights for customers.
In my example above that makes the high street agent £87 cheaper than the online agent. Overall, the charge booking online amounted to 20% over the cost of the actual flight. I don’t know any high street agent that couldn’t undercut that.
More importantly, though, high street agents can now compete directly with online sites knowing that they can beat them on price. This gives them a massive opportunity.
This has recently been made all the more possible with Expedia’s decision to pay agents 10% commission on over 85,000 hotels worldwide at prices that match Expedia’s online prices.
Unlike online sites that have to rely on very expensive advertising and SEO techniques to drive users into sales, high street agents have their own ‘real estate’ in the form of their window displays and user databases.
Agents getting their websites ‘sales ready’, and advertising their website and social media presence in their windows will see far more customers than those who don’t.
Building customer trust through demonstrating a clear ability to beat online rivals on price (albeit on smaller ticket value items as in the above example) will drive most of the sales back to the agent.
“If they can match Expedia and beat fly.co.uk we should use them for all our holidays,” is surely what consumers will start thinking.
Google embraces local businesses, social media is just about word of mouth.
Perhaps the next decade will be the great enabler for high street agents, but only if they recognise their competitors’ strengths and weaknesses and develop a marketing plan to compete head on with them.