The recent collapse of Misa Travel has been a nightmare for those who have made bookings with them. The “lucky” ones would have bought travel insurance, which would have covered the cost incurred.

Those who paid for their trips via credit cards could probably invoke the credit card charge-back feature to recover their money.

Still, the inconvenience as a result of this would still piss many people off. If I were in their shoes, I would wreck havoc.

OTAs Are Cheaper?

The sweeping statements people make tend to gravitate towards “why would people use brick-and-mortar travel agents when online travel agents (OTAs) can offer the same, if not cheaper prices” or something similar. Validate argument, I suppose.

Technology has and will always pose new challenges. It is near impossible to beat the size and economies of scale that OTAs like Expedia/Agoda/TripAdvisor has, correct? In my humble opinion, traditional travel agents have to think about how to make themselves a more compelling choice compared to OTAs. If not, then they have to think about how to carve out a niche for themselves.

Let’s return to our earlier statement on pricing, as an example. Naturally, one would think that it is difficult, if not impossible, to beat online prices that everyone can now easily source by themselves.

Let’s assume that we are not considering any value-added services and are simply buying an airline ticket or booking a hotel room.

In an ideal world, removing the middleman (such as the travel agent) removes one layer of fees, which almost always results in lower prices. Furthermore, perfect information yields perfect pricing, because everyone would always go for the cheaper option, rendering the more expensive option i.e. the travel agent obsolete. Even if we consider the event of slightly imperfect information, the price differences would be minor, at best.

This is also why some hospitality properties are promoting direct bookings on their official websites and pushing out price-matching offers to discourage consumers from booking on OTAs, since OTAs themselves are middlemen that take a cut.

Maybe Not ..

Unfortunate for consumers, but good news for travel agents – the world we live in is far from ideal. Knowledge is power.

For my trip to Maldives in April, I mentioned in my blog post on a legit way to execute the ultimate money hack on the Maldives luxury vacation segment. I have replicated the costing below.

Official Channels
Official resort email correspondence = US$ 13,305.60
Official resort website = US $10,194.60

Online OTAs
Agoda.com = US$ 14,831.84
Booking.com = US$ 11,620.00 (before 23.2% taxes, return transfers excluded)
Expedia.com = US$ 11,956.52

Travel Agent
Singapore agent = US$ 8250.00

As you can see, the highest and lowest price quoted differed by almost US$7,000 for the same product. Jaw-dropping! In case you’re wondering, I booked with the Singaporean agent with a credit card to a) take advantage of the charge-back feature and b) earn a ridiculous amount of miles and c) bought travel insurance, because I’m a scaredy cat. And I checked with the resort directly regarding the travel agent to verify if it was legit.

In case you’re wondering why this is possible, I’ll attach a snippet of an email correspondence for you below.

“.. generally is to inform that since there is no middleman involved it is much more efficient to deal with the hotel directly and to get the booking done instantly .. That all being said, I can assure you that should your offer is from our contracted partner, it is the best offer available offer and please let me know the agent name so that I can verify them accordingly.”

Contracted Partners

Two words. Contracted partners.

Yes, I had to literally squeeze the juice out of my agent to get this rate. And the amazing thing is, they are actually a sub-agent working with a Maldivian agent because they do not have a direct contract with the resort I’m staying at.

Just consider for a moment how mind-boggling this is. Even after two layers of middleman fees, the price I’m getting is still hands-down a couple of thousands dollars lower than the cheapest OTA offer you can find out there. Well, they certainly have a niche area that they’re servicing and this is one of the ways they’re staying afloat.

Yes, technology disrupts.

Yes, many travel agents will go bust, if they fail to innovate and adapt.

And yes, many travel agents will continue to flourish and prosper!

Craving For Maldives? Read More Below :
Gili Lankanfushi : A Sneak Preview
Gili Lankanfushi : Choosing Your Maldives Resort. And Jetty. And Villa.
Going To Maldives (Part 1) : Maldives Trilogy Special Feature
Going To Maldives (Part 2) : Maldives Trilogy Special Feature
Going To Maldives (Part 3) : Maldives Trilogy Special Feature