Back Online And Happy New Year.
January 2, 2009 – 3:07 pmWell, since we last spoke, the world has certainly changed. There are no longer any investment banks, we have a new president, joystar no longer exists, and Cruise Value Center no longer exists.
The economy is in shambles, retirees have lost about 40% of their retirement funds. And, to boot, the Travel Agency is the most Untrusted place to purchase travel. Thanks CVC.
I took 2 months off (first time in 7 years). I did simply the bare minimum. I took a long look at the industry, where it is going, and quite frankly, whether the travel agent will survive. I’ve used the analysis to set the future direction of CruisePak.
First off, i changed the financial model of CruisePak. It is an advertising based solution. Usage for the travel professional is basically free. I’m glad I had done that over a year ago because the travel agent community, no matter the profitability, always has free, unfettered access to an information technology solution.
However, recent events have put, in my opinion, an almost insurmountable cloud upon the travel agency…and that is the collapse of Cruise Value Center..a 70 million dollar a year business. It’s bad enough that the travel agency was in competition with the online retailers and the travel vendors themselves…but this…well, this is like a nuclear bomb.
The CVC collapse will definitely trend travelers to online or direct purchase. Consumer Reports will come out in favor of this and so will a myriad of consumer protection agencies…with CVC being the poster child of bad behavior.
Combine this with the high probability of a weaker dollar (high fuel prices) and inflation due to impending “bailout” strategies and it is seen that there is a huge questionmark as to the survivability of the travel agency. The marjority of travel agencies will still exist. However, they will be on a part time basis at best. Profitability (low commissions) and the increased expense incurred in getting bookings on a per unit basis will make full time existence of smaller agencies cost prohibitive. Of course the powerhouses will still exist.
I’ll talk more on this in future posts.
