On July 4, 1887 Walter A. Brownell and ten guests set sail from New York aboard the SS Devonia bound for Europe, thereby laying claim to being the first-ever travel agency in the United States. Nearly 130 years later Brownell’s travel company is still selling luxury travel packages around the world.
For most of that time, travel agents made the majority of their money on commissions paid by travel suppliers. However, on Feb. 9, 1995, those dollars began to vanish as airlines started to cap – and then cut – travel agency commissions. The Case of the Disappearing Commissions marked a turning point in the history of the industry, and led many to assume that travel agencies were all doomed to the dustbin of history.
Now 20 years on, the travel agency business has survived, perhaps even thrived, although minus a number of its players from those earlier days. Barry Liben, the CEO of Travel Leaders Group, maintains that’s because the more business-minded survivors saw the challenges as strategic opportunities. “When the commission caps hit 20 years ago, many in our industry went into panic mode,” he says. “But I saw great opportunity and knew that our industry had to change the way we did business."
The changes in travel agency commissions came just a few years after Business Travel Executive had launched in 1989. By that time, BTE was already well established as the place to go for thought leadership and education in the complex world of managed travel. The disappearing commissions were certainly no mystery to us.
Across those years, corporate travel has absorbed any number of fundamental industry changes; new rules, new technologies, different business models, bankruptcies, consolidations, and more. Throughout, BTE has been a stalwart presence, delivering timely information and thought-provoking concepts about the ever-changing business of business travel.
This month’s cover story Pay As You Go, (page 20) explores mobile payments, the latest in a long string of rapid-fire technology dislocations being wrought by the age of mobility. Asian Skies (page 12) reveals how today’s new aircraft designs are yielding longer routes and opening up enhanced air travel services across the vast Pacific.
Meanwhile, as you’ll discover in High Value Targets (page 26), the hotel industry is awash in investment capital, new properties and innovative brands, and the question for travel managers is how to make the most of these changes for your travelers and your program. And this month’s Phat Data – To Go takes us on a test drive of a whole new way to control the information you already have, and connect with the information you still need.
All of that is to say this: The travel industry has proven itself to be resilient, reliable and sustainable, through challenge after challenge. Will we look back in another 20 years and remember how we solved the unknowns we face today? I have no doubt we will. The “business-minded survivors” among us will see to that.
And, as always, BTE will be on the case to help solve the mystery.