Travel Advisors vs. Online Travel Agencies (OTAs) – How Covid19 will Affect the Game

Will Covid19 benefit travel advisors and hurt OTAs? It’s time to bring balance to the argument. 

Travel advisors have been around since the 1840s, and for almost the past twenty-five years their profession has endured tremendous competition from the innovation that is Online Travel Agencies (OTAs). Now Covid19 has brought a new dynamic to the saga between traditional travel advisors and OTAs.

I believe in the value of travel advisors, and I encourage travel advisors to believe in themselves and the value of their service, especially after what Covid19 has done to the travel industry. However, even the staunchest of believers should acknowledge that there are some who do not have the same confidence in the assumed bright future for travel advisors. Those in that boat mostly swear by OTAs, and are willing to bet that after Covid19, traditional travel advising will face a decline, and OTAs will increase in popularity.

This is no doubt disagreeable to more than a few people; but, a diversity of thoughts on the question of what the outcome will be for both OTAs and travel advisors is good for both sides. It delivers balance, understanding, and a great setup for success. Hence, the reason I felt it important to explore the perspective of someone who is in the know, and is confident whom Covid19‘s effect will benefit.

Max Starkov is a hospitality and online travel industry technologist, and digital strategist. He is the one I engaged because of his intriguing view on how Covid19 will affect these competing players in the travel industry. Max believes that OTAs will benefit. Here is what he had to say:

Covid19 did not start it…

The collapse of the traditional travel intermediary system has begun long before the current COVID-19 crisis. Traditional travel agencies, tour operators, wholesalers and consolidators were decimated by the advent of online travel planning and booking via both OTAs and travel supplier websites and the emergence of digitally-savvy travel consumers.

There are examples and data supporting this view.

The demise of Thomas Cook in 2019 was a direct result of this trend. The number of travel agencies in the U.S. declined from 25,000 back in 2000 to less than 7,500 today. In the U.K. the number of travel agencies today is less than 3,900 – half of the number from just 10 years ago.

Will Covid19 cause consumers to use traditional travel advisors?

I don’t think so.

Why no return to travel advisors?

Many travel agencies will not survive Covid19.

First, many travel agencies are small businesses and the current crisis has been devastating as far as small businesses are concerned. 30%-40% of small businesses in Europe and the U.S. are not expected to survive the crisis.

There will be less demand for Leisure travel services.

Second, travel is not expected to rebound to pre-COVID levels until 2022. Until then people will avoid long-haul vacations and travel predominantly by car domestically in the US and to short-hall destinations in Europe i.e., to familiar surroundings where they feel comparatively safe. You do not need a travel advisor or a tour operator for this type of travel, as simple as that.

There will be less demand for business travel.

Third, business travel, which has become the main focus and source of revenue for the mega travel agencies and TMCs, will not rebound anytime soon. Many companies discovered that videoconferencing is a great substitute to physical travel, which is much more expensive and creates liabilities they would like to avoid at any cost.

The world has moved online.

Fourth, because of the shelter-at-home mandates around the world, the vast majority of the population – even late adopters – were forced to use online services to communicate and work or study remotely, search for news or information, purchase goods and services, order food, communicate with friends and family, watch streaming services and entertain themselves. This “online planning and purchasing education” has created millions of converts and believers in online travel planning and booking, which will benefit the OTAs and travel suppliers’ own websites immensely.

Max speaks from experience, truth, and a good level of understanding. But this is not a death sentence for travel advisors, nor is it a reason for deflation of confidence. What he has shared is great insight, and valuable information for all travel advisors who wish to be relevant, and capitalize on every post Covid19 travel industry opportunity. Use this information to your benefit.

I would love to hear your thoughts on this subject. Will Covid19 benefit OTAs or travel advisors? Please send me your comments here on LinkedIn.