The direct booking 3 percent solution

Richard Turen

A few weeks ago, I managed to alienate a good many of my preferred suppliers while convincing others that I was, indeed, out of touch with contemporary forms of transactional analysis. I had suggested that it might just be that the time for direct bookings has now passed.

Taking one’s vacation time, I argued, and leaving it in the hands of a commission-based call center headset is almost never in the best interests of the consumer. It is, instead, a cruel attempt to divert the client from unbiased, well-informed, experienced counsel. You know, like they have in other professions that are respected.

Many of you reached out in support of my stance. But the most interesting response I received was from a supplier who plies lakes and rivers.

It was nicely written, and the person who penned it is a friend and someone I respect. The purpose seemed to be to inform me of a fact that would be new to me. This supplier, well-known though it is, does only “3% direct business.” That amazingly low figure was used as evidence that this particular supplier “strongly supports the travel agent community” by doing 97% of its business through that channel.

Well, not exactly. I am going to take a chance here and guess that a fair share of that 97% revenue is produced by other commissioned headsets who work in call centers owned by corporations other than the provider. The OTA community is a separate issue. The real question is whether or not a supplier should get kudos for only doing 3% of its business directly.

We have, of course, heard similar arguments for years. I have had the percentage of direct business described to me by a wide range of industry executives. The figures are always somewhere between “negligible” and 8%. I have never heard anyone cite a higher figure.

But what does 3% really represent? It tells me, in the specific case I am referencing here, that one of two things is true:

The first is that the supplier is making up the figure. No major tour operator or cruise line does 3% direct business. I would find that virtually impossible given the implications.

Look at the massive amounts of direct-to-consumer advertising plus the print ads, the home mailers. Add in phrases like “Talk to a cruise specialist or your travel consultant.” Spending the massive millions to garner 3% of the direct-business pie makes little economic sense. Why list those 1-800 call center numbers?

The second thing that could be true is that many suppliers are truly unaware of the financial benefits from major consortia and seasoned advisors who would rain praise and efforts on anyone who was the first to drop direct bookings. Do they not get that?

Now to be completely transparent, many executives whom I count as friends think I am naive. They see travel agents as line-item, order-taking expenses. And they always tell me that many of their callers do not wish to use a consultant.

So what? Do you mean to tell me that your 3% or 40% of consumers who call to book your product cannot be turned over to a travel professional to handle the booking?

Do cruise lines and tour operators really believe they lack the marketing and sales skills to retain the bookings of at least 90% of those callers who state they do not wish to use an agent? No way you can handle that? Come on!

The fact is that the major suppliers want it both ways. They are the advisor’s best supporters while maintaining an expensive in-house division designed to compete with advisors for the same consumer. Can you really have it both ways?

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