“Booking is only the beginning” – Interview with Dr. Markus Heller in touristik aktuell

“Booking is only the beginning” – Interview with Dr. Markus Heller in touristik aktuell

15.01.2019

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How much power will online portals have in the future? What will the future bring for commercial agent status? How will cooperation between tour operators and travel agencies change? Dr. Heller, managing partner of Dr. Fried & Partner, asked himself these and other questions during an interview “Booking is only the beginning” with touristik aktuell  on the topic of the future in travel sales.

Overview

In the interview, Dr. Heller emphasizes that the travel market will change enormously in the near future. This will be driven by an increasing price war and a changing compensation logic, as well as ongoing consolidation and the increasing relevance of data. In addition, large online players such as booking and the status of sales representatives play an important role. The interview also focused on the future relationship between tour operators and travel agencies.

Changes through large online players, such as booking.com

Major market players such as Booking or Airbnb will be the key change drivers in tourism in the future. While these were still little noticed a few years ago, they have now built up considerable market power, which is likely to increase even more strongly. For example, booking, similar to Amazon, is gradually forming its own eco-system. In addition to numerous new business areas that go far beyond the hotel industry, this also includes its own payment solutions and added value that largely does without retailers.

Changes in commercial agent status

With regard to the future of commercial agent status, tour operators are currently showing little ambition to abandon it. Nevertheless, it is possible that the increasing pressure on margins will leave tour operators with no other choice in the future. In recent years, tour operators have in any case reduced their own margins more than travel agency commission. A possible abolition of commercial agent status would represent a massive challenge both for travel agencies and for online sales. In the Netherlands, for example, the number of travel agencies has halved since the commercial agent status was abolished.

Relationship between tour operators and travel agencies

Due to the massive changes elsewhere, Dr. Heller does not consider the current tensions between sales and organizers to be of any particular importance. Instead, he appeals for closer cooperation between event organizers and sales partners in order to secure their respective future viability. The efforts of the major tour operators to expand their hotel portfolios and their own destination management in order to continue to be successful in the future are therefore heading in the right direction. In addition, however, a shared database and integrated processes are also important. Since the current 2-step model will no longer be financially viable in the medium term, the existing skepticism on this issue in the industry should be reduced.

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