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In Priceline.com world, do travel agents still matter?

Scott McMurren
Mark Eliason, head of USTravel in Anchorage, talks about the evolution of travel agencies and why they still matter in the Internet age. Dan4th / cc via flickr

Technology is a disruptive change agent. Entire industries have been upended as a result of technological innovation, including printed newspapers, vinyl record albums, rotary phones and your neighborhood travel agent.

Of course, the news media, musicians and telecommunications companies still operate today -- in different forms. But how about travel agents? Have they gone the way of the dodo?

We asked Mark Eliason, head of USTravel in Anchorage, about the evolution of travel agencies. Eliason owns the state's largest travel agency. In addition to his Anchorage office, he has branches in Dutch Harbor, Fairbanks, Kodiak, Juneau, Ketchikan and Prudhoe Bay. He just opened an office in Portland's trendy Pearl District and has offices in Seattle, Spokane, Des Moines and Atlanta. New offices are planned for New York City and in Queensland, Australia.

According to Travel Weekly's "Power List for 2012", USTravel is the 44th largest travel company in the U.S. with 2011 sales of $182.3 million and 172 employees. Eliason recently was inducted into Alaska's Business Hall of Fame

Q: How have travel agents survived in today's Internet economy with airlines' "book-direct-on-our-website" emphasis?

Eliason: I am offended when people refer to USTravel as a travel agency. We're a travel management company. That includes negotiating rates with airlines, hotels, rental car companies as well as providing accounting and expense data to our clients. The traditional "travel agent" died 11 years ago when airlines stopped paying commissions.

Q: If airlines don't pay commissions, how do you make money?

Eliason: We work directly for the traveler. And since the traveler pays us directly, we bring extra value to the equation. That includes stepping in if something goes wrong or just making sure travelers get the best deal.

Q: Much of the information that once was locked up in proprietary airline/travel agency computers now is available for all travelers. That includes prices, schedules, restrictions and shopping options. So where is the "extra value"?

Eliason: Time is money. And since about 80 percent of our booking volume is "corporate travel" (including business and government travel), our conversation starts like this: "Do you want your professionals that bill $75-$150 per hour booking their own travel?"

For individual travelers, we have deals that we provide as a result of our high volume -- especially on hotels and cruises.

But on the corporate side, we accumulate the data about their travel expenditures and use it to secure discounts on airfares. You must have data to get a good deal -- and we are very good at collecting and analyzing the data. It's a smarter, more efficient way for companies to buy travel.

Q: Mileage programs are important for travelers, particularly in Alaska. Do you work with travelers to secure those award seats?

Eliason: Yes, we do. As soon as travelers started having trouble booking their mileage tickets, we recognized there was a demand for this service.

Q: Aren't there sufficient resources, though, for most individual travelers to make their own plans without paying you to help them?

Eliason: It comes down to surety, I think. We know travel. Our staff knows the difference between a good deal and a bad one. We know the numbers, because we work in the marketplace all day long.

Q: Is there a blind spot that travelers miss when they're making their plans?

Eliason: About 15 percent of all plane tickets are changed. Because tickets are nonrefundable, these tickets go unused because travelers or their companies forget about them.

We call it "ticket rescue". We had one client whose company accrued $35,000 in unused tickets. We can provide a report to our customers detailing the charges -- and come up with a strategy to "rescue" those tickets. That includes name changes -- which now is allowed with Alaska Airlines (for a fee).

Q: This summer, we're seeing more new airlines arrive in Alaska. That includes Virgin America, JetBlue and Frontier. How do you think that will change the market?

Eliason: Alaska Airlines remains the dominant carrier in the state. They are not going to allow anyone else to gain a foothold in this market. Other carriers, including American, Delta and United regard Alaska as the tail end of the market.

Q: What trends are you seeing for travel outside of Alaska? I was shocked last week when Enterprise wanted $149 per day for a car rental in San Francisco. What's going on out there?

Eliason: It's just like the last seat on the plane. The term in the business is "yield management". The car-rental folks aren't going to let that last car go for a bargain. But our agents can help you navigate this stuff. They don't just look at the airline computers. Agents know how to access all the web specials, or how to call a hotel or car company directly for a better deal. There are many forms of distribution--that's how our business has evolved.

Since the traveler pays us directly (about $38 to write a domestic airline ticket), there's no question who we work for. Anyone who calls us a "travel agent"--they probably think we're representing the vendor. 

Scott McMurren is an Anchorage-based travel marketing consultant who has lived in Alaska for three decades, spending much of that time traveling the far-flung corners of the state. Visit his website at www.alaskatravelgram.com or follow him on Twitter for breaking travel news.