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BTC: Developments that will affect consumers and travel agencies In 2016

Jan 04, 2016

What Developments And Trends Will Affect Consumers and Travel Agencies In 2016?

There are three issues that will likely be resolved by government, industry and/or customers in 2016 that will impact on individual and corporate consumersā€™ choices and prices and on the viability of travel agencies.


The U.S. federal governmentā€™s decisions regarding our nationā€™s commitment to negotiated Open Skies agreements will likely be determined in 2016. Delta Air Linesā€™ American Airlinesā€™ and United Airlinesā€™ (the ā€œBig Threeā€) war on Emirates Airline, Etihad Airways and Qatar Airways (the ā€œGulf Carriersā€) received most of the attention in 2015. However, the gambit to freeze Gulf Carrier capacity represents just one front in this epic battle.

The Administrationā€™s indecision has allowed Norwegian Air Internationalā€™s application, before the U.S. Department of Transportation (the ā€œDOTā€) to provide competitive service to the U.S. to languish for two years depriving consumers, and the travel agencies that support them, with new competitive choices and alternatives.

Very importantly, other airlines around the world are consequently less interested in exercising their rights under Open Skies agreements as they have seen Big Three protectionism costing Norwegian millions of dollars along with excessive management time and attention. There are much lower-risk opportunities to utilize expensive airplane assets. This commercial protectionism artificially restricts the growth of business travel and the overall travel and tourism industry undermining the interests of travel agencies, consumers, communities and the U.S.


With some reason for hope, DOT will restore comparison-shopping in 2016 after eight years of deceptive Big Three marketing practices that have harmed consumers and travel agencies. Consumers cannot efficiently see, compare and buy ancillary services in the same transaction as the base fare - despite availability of required technology. Airlines have refused to provide this information to travel agents and their very best corporate customers. This costs consumers billions of dollars each year as the fees for such services go undisciplined by market forces and often consumers miss the best offers. Travel agents are harmed because they cannot provide complete customer service without much manual labor and associated costs that have to be passed on to the customer.


The Lufthansa Groupā€™s imposition of a 16 Euros surcharge for bookings outside its direct channels is designed to significantly reduce price transparency for consumers and to harm its competitors in indirect travel distribution channels. Such travel agency channel discrimination, if copied by other major airlines, will effectively drive a wedge between travel agencies and their customers. Surcharges will likely reach $50 dollars and above as airlines seek to fundamentally change consumer behavior driving unsuspecting consumers to the Walled Gardens of where comparison-shopping is non-existent.

BTC: Developments that will affect consumers and travel agencies In 2016

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