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And Away We Cyber-Go
Netting a bargain? Travel industry grapples with the Web
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Business New Haven
08/18/2003
By: Richard Rangoon
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If you’ve ever planned a trip on the Internet, one thing is abundantly clear: The travel industry is changing. As area travel providers rise to meet new challenges, they are finding both new opportunities — and setbacks.
Mercury Travel Group, New Haven
Company President Stanley Dalnekoff concedes the obvious: that many travel planners are turning to dot.coms such as Priceline.com or Expedia. But he explains that these "deals" often are not all they appear to be.
"The best fare isn’t necessarily the cheapest fare," Dalnekoff says. An experienced travel agent is much more likely to give you the travel package you are looking for. Travel agencies sell more than tickets; they sell travel planning, he notes. This personal service results in higher quality and often cheaper travel.
At the same time, he acknowledges that many customers are planning their trips on the Internet. The number of tickets agencies sell has dropped to about 50 percent of the industry total each year.
Partly in response, many agencies have consolidated, leaving about 25,000 agencies left in the U.S. travel industry. However, much of this change likely is attributable to the overall decrease in travel stemming from the September 2001 terror attacks on New York and Washington as well as the poor economy.
Mercury Travel Group charges from $10 to $100 per consultation, much as a lawyer or accountant would, Dalnekoff says. The low fee might be for a simple round-trip ticket and a hotel reservation, while the higher charge might cover a complex, multi-stop corporate trip.
Ticket wholesalers buy large numbers of discounted tickets from airlines and then resell them to travel agencies and directly to the public or through Internet sites such as Orbitz.com.
Dalnekoff acknowledges that a simple, round-trip ticket might be a bargain on the Internet — but more complex trips are a different story.
For example, if a passenger is bumped from a flight booked through a travel agency, he can then typically call an agency telephone number and have an agent book him or her on the next available flight. Travelers who book through Internet sites do not have this option, he said.
Agents employ a network of computer connections known as the Global Distribution System to access available flights and to vastly increase the chances that passengers are where they want to be and when.
Mercury Travel’s Web site is www.mercurytravel.com. Booking a flight on its Web site costs $8.
Dalnekoff characterizes his company’s site an "information portal" because it lists advice from the State Department, foreign area codes and so on, as well as reports logged by other travelers. The site also features from 20,000 to 30,000 travel packages at any given time.
New Haven Hotel, New Haven
Posting room availability on the Internet — without overbooking or underbooking — is a skill that New Haven Hotel General Manager Stephen J. Nigro has been refining since uploading the hotel’s Web site four years ago.
"You used to be wasting your time — now you have to be there," he says of www.newhavenhotel.com. The number of people booking hotel rooms on the Internet is constantly increasing. The site gets about 1,000 hits a month and Nigro makes sure that the listed rates and hotel availability are current.
These days, having a Web page is mandatory for a business to be taken seriously, hotel Director of Sales Scott Hibson says — and a Web page has a lot more space for information than a simple three-fold brochure.
The hotel is independent and therefore doesn’t have the advertising exposure that a large hotel chain has, reinforcing Nigro’s drive to optimize the Internet as a marketing tool.
About 12 percent of hotel visitors choose to fill out comment forms soliciting their feedback on their stay at the New Haven Hotel. According to the informal survey, the top dot.coms they cited were Travelocity and Expedia, as well as Hotels.com and Lodging.com, as playing a role in their selection of the hotel, Nigro says.
The New Haven Hotel’s Web site is eye-catching: Animated butterflies fly across the page when visitors access it. It features listings for rooms costing from $90 to $140 night. The hotel has 92 guest rooms in all.
The most commonly used search engines, such as Google and Yahoo!, lead many people to the hotel’s Web site, Nigro says. However, a link to their site from the city of New Haven’s Web site (www.cityofnewhaven.com) comes in a close second.
The Internet also poses hotels with a downside. People who choose accommodations largely or solely by price can drive rates down as hotels compete to offer the lowest rates. Although hotels want to remain competitive, many are reluctant to compromise their service in doing so.
Nigro is confident that the New Haven Hotel is maintaining the qualities that draw repeat customers without pricing itself out of the market.
By placing himself in the role of customer, he is maximizing his exposure. One of his approaches is to find the search words that are most likely to lead to his site and program them into the site’s list of key identifying words that search engines link to.
Marquis Car Service, LLC, New Haven
Co-owner Dori Maher says that about 30 percent of her business originates through her Web site, according to reports from customers. Travel agents account for about ten percent.
Marquis Car Service’s Web site (www.marquislimo.com) has been up for about six years, she says. The Greater New Haven Chamber of Commerce and city of New Haven Web sites feature links to her site, and she gets a fair amount of business from Bradley International Airport’s Web site, she adds.
The company has been in business for eight years and is family owned, with four limousines and five Lincoln Town Cars. Much of Maher’s business, as one would expect for a company of that size, comes from word of mouth.
State regulations control the rates limousine services can charge, so having customers bid for her services on a wholesaler’s site would not be a feasible business move — honoring a bid lower or higher than than regulations allow could result in a fine.
Unfortunately, state layoffs have reduced the manpower of the state’s Department of Transportation, and the DOT currently is without a special investigator, Maher says. That makes it more likely that some limousine services will violate the state’s rate laws, effectively penalizing services that comply.
Marquis Car Service charges $100.75, not including tips or parking, for a one-way fare to Bradley International Airport. Many of her customers are doctors traveling between the airport and Yale or to various points in the region’s substantial bioscience region.
Included in the fees she posts on her Web site is a parking charge that limousine services have had to pay since the terror attacks. Due to stepped-up security, drivers must now park their vehicles and enter the terminal to pick up their passengers. The first hour of parking at Bradley used to cost $2.50, but has recently been increased to $4, Maher notes.
Also, insurance companies have raised their rates for most segments of the travel industry — limousine services included — and these increased rates must be incorporated into the fare.
However, Internet promotion and word-of-mouth have been bringing repeat customers, so Marquis Car Service has been able to absorb the extra costs, Maher says.
Eastside Travel, East Haven
Asked why travelers should consult with travel agents, co-owner Frances Cribbis is matter of fact: "Do you want to spend three or four hours on the Internet when I can do it for a small fee?"
Cribbis does not have a Web site because she believes that word of mouth and a listing in the Yellow Pages are better uses of her resources in promoting her business.
Every wholesaler and every Internet travel site has its own rules, and unless customers pay attention to the fine print, they probably will come out worse than if they had gone through a travel agent, Cribbis says. For example, some Internet sites are inflexible in altering itineraries, while others fail to include the sales tax in their quoted price.
For $21, Cribbis can access the fares of all the airlines and the bargains offered by airline ticket wholesalers. Independent of airfare, Eastside Travel does not charge customers for booking vacations because the vacation providers absorb the fee. This is not the case with airlines, she says.
Since being deregulated in 1978, the airlines have been free to charge what the market will bear. Therefore, travelers buying tickets directly from an airline often will not get the lowest price.
After steadily decreasing the ten percent they paid travel agents for selling tickets, the airlines eliminated the percentage about two years ago. That is why agents now must charge travelers.
"The airlines make the rules," she says. "The agency does the work."
Eastside Travel provides the "personal touch" that travelers won’t find on the Internet. They manage trips for customers, relaying feedback from other clients, drawing on their knowledge and experience, and tailoring a trip to fit the customer, according to Cribbis.
High-Meadow Bed & Breakfast, Middletown
Innkeeper Bob Charles has had a Web site for about a year, which he has updated twice. Almost all of his business comes from word-of-mouth and repeat visitors, making his Web site almost a formality. He estimates that it has drawn no more than ten percent of his customers since he has posted it.
Had his son not been laid off from his dot.com job in California, Charles might not have a Web site at all, he acknowledges. Using the free time suddenly thrust upon him, Charles’ son developed a site that displays the farm’s 1742 house, its opulent, antique furnished rooms, and its surrounding lakes and gardens. Charles’ niece, a professional photographer, took the pictures featured on the site.
High-Meadow Bed & Breakfast has a link on Middletown’s tourist district Web site, but it has not yet produced any customers.
Visitors cannot make reservations on www.high-meadow.com, but they can send him e-mail messages, Charles says.
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