With the collapse of online travel agent Fly365, (otherwise known as an OTA), the debate about booking your travel through an online travel agent has flared up, once more.
Once travel products like flights, hotels and car hire became bookable by the consumer online, many declared travel agents dead and useless.
However what actually happened was many of these bricks and mortar travel agents, built their own websites and simply moved online.
Why Travel Agents Exist
Using an airline reservation system requires knowledge akin to computer coding. You need to know airport city codes, airline codes, routings of airlines plus the system entries to obtain information to check flight availability, make a reservation, then issue the ticket. Of course there is multiple systems and each has their own entry requirements to add to the confusion.
So travel agents became sales agents for the airlines, trained in using the airline reservation system, taking a commission in the process.
I’ve written more detail about travel agents, and online travel agents in the following articles:
- Travel agent secrets you should know
- Online travel agent scams
- Podcast episode featuring stories about travel agents
Airline profits are slim, they need to sell every possible seat on a plane to ensure they maximise profit and travel agents both online and retail stores help them achieve that.
These days, most meta search sites (Skyscanner, Jetradar – which powers the flight search pages on this site, Google Flights, Kayak etc) will give you a list of prices to book a flight via an online travel agent – which is why they still exist.
Why not book direct with an airline?
There’s pros and cons for booking direct with an airline, but also for booking via an online travel agent.
I’ve said this before, but people forget and think Google controls everything but actually, it’s the airline that sets the ticket price because it’s the airline that operates the aircraft, pays the maintenance, crew costs, airport gate fees, catering, fuel and marketing costs.
Booking direct with an airline means you’re paying the price they have set. There’s no additional travel agent fees if you need to make changes and many airlines allow you to login, view your flights, adding in meals etc as and when you like. Some traveller’s like this control.
Booking via an online travel agent is mostly about saving money. Each seller of airline tickets is earning a commission. So an online travel agent reducing their commission, to compete against the airline (and other agents), means cheaper airline tickets for you. They still make money, you get a cheaper ticket, everyone wins.
The best example of this is my mother actually booked through Fly365 last year. She bought a ticket with Virgin Airlines to Hong Kong. Direct on the Virgin website, the ticket was over $700 return, on Fly365 it was around $499 return, saving over $200 which for Hong Kong meant the cost of a nights accommodation or a day at Disneyland and Ocean Park.
If you were a family of four, that would make a huge difference.
However, an online travel agent also allows you to mix and match airlines, to create a cheaper round-trip ticket, book mixed class airfares, and even pay in alternate currencies.
When I was in New Zealand, I wanted to pay for a flight from New Zealand to Italy flying with Emirates using my Australian credit card and pay in Australian Dollars; booking with Emirates direct wouldn’t allow this because I was departing from NZ, so I had to use an online travel agent.
Some flight search engines will provide options to book direct with an airline, and these are nearly always more expensive than booking via an online travel agent.
If you’re looking to save money, then booking through an online travel agent can save you hundreds of dollars (depending on the itinerary), just don’t fall for their sneaky ‘optional’ fees and always read the terms and conditions.
Worst Case Scenario
In my years of working in the travel industry, I’ve seen major airlines, hotels, attractions, and travel agents all go bankrupt and collapse. Travel is volatile, profits are slim, costs are high – there’s always a risk, not just from using a travel agent.
Unfortunately most travel insurance policies do not cover the financial collapse of a provider – check the policy wording carefully but after September 11, which saw the collapse of many travel providers, most insurance policies covered themselves against future bankruptcy claims.
Some travel insurance policies will cover insolvency of a provider (not a travel agent) so double check inclusions before purchasing travel insurance. A good travel agent will have their own bankruptcy protection in place, either in the form of insurance or by placing the customer’s money in a trust, until it’s paid out to the supplier.
Also check your credit card policy; ask your bank if you can potentially initiate a charge back in the event of paying for something you did not receive. Different laws apply in different countries.
Considering how easy it is to compare the cost of flights between booking with an airline direct, or via an online travel agent you can know at a glance, without spending hours searching, exactly how much you’re saving, if you were to book via an online travel agent.
Sometimes it’s not worth it to save $5, other times it is to save hundreds or if your itinerary or needs dictates it.
So there’s still a place for online travel agents. If you decide to use one, for peace of mind, you may prefer to choose one in your home country, check they have a valid travel agent licence or IATA membership and always, read their terms and conditions.
Each country should have a national travel agent licence scheme, which even an Online Travel Agent should be a part of.
In Australia it’s AFTA, in America it’s ASTA, in the UK it’s ABTA (are you seeing a pattern here?), in Canada it’s ACTA, in New Zealand it’s TAANZ, in Hong Kong it’s HATA. I’m sure you can figure out the one for your home country for anywhere else.
The OTA options displayed on my website have been handpicked and are reputable agents. If you come across an OTA you feel shouldn’t be there, contact me and I can remove them from showing up in search results.
I’m still working on an OTA comparison guide, it’s a huge project and I aim to have it out by Easter. Want to know when it’s finished? Register here.
What’s your experience booking through an online travel agent? Good and bad? Comment below or get in touch.
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