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Why travel agents own the luxury market

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Yes, there are still doubters and yes, there will be luxury sold directly via online services – but suppliers that want to show real ROI, robustly embracing the trade is the smart strategy.

There are many reasons you are thriving in the luxury arena. The rich have the wherewithal to hire people to do time consuming tasks for them, be it managing their finances, keeping their lawns and gardens pretty, or decorating their homes. While it’s possible to do those things themselves, they prefer to pay someone a fair price to do it better than they can.

The fact that consumers prefer to use agents, planners, counselors, designers, advisors, etc. for their trips doesn’t stop the OTAs from spending a considerable fortune (over $3 billion annually) churning out commercials that claim they cannot only find the lowest price at hotels, but can also create unique experiences. Frankly, I wouldn’t use them to buy an airline ticket from New York to St. Louis—but then again, I spent a considerable amount of time researching their awful record of consumer complaints, including numerous muck-ups that would have been funny if they didn’t ruin someone’s vacation or business trip.

Suppliers naturally have to keep their feet on both sides of the fence. While they would love for customers to book directly, many find the rates they sell on their own websites are lower than what you sell. The OTAs provide reach to anyone who has an Internet connection, of course, but they attract the price shoppers—and their distribution costs are as much as 300% higher than when you sell the same product for them.

Get the full story at Travel Market Report

Read also “Travelers turning to travel agents” at Lodging


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