Are Philippine travel agencies dead?

By April Paulyn B. Roque

That’s a question that’s been hounding the industry since the late 1990s.

During that period, Internet access became widely available locally, allowing Web users to directly book and pay for their trips and accommodations online, thereby cutting off travel agents.

This much has been admitted by Rajah Travel Corp. (RTC) Chairman and President Aileen C. Clemente in an interview.

“There has always been that question — whether travel agencies are going to die — and they’ve been saying that since the ’90s,” she said.

Ms. Clemente added: “If you’re a traditional-model travel agency, then yes. We have seen those who are still using [that] method already close-up shop.”

Over the past decade, this trend has been reflected in the United States, with the number of brick-and-mortar travel agencies steadily declining due to the rise of online alternatives.

However, it has been a slow — if painful — death for the traditional travel agency industry.

According to the updated version of the US Bureau of Labor Statistics’ Occupational Outlook Handbook, traditional travel agency sector is expected to shed jobs by around 12% from 2012 to 2024.

These job losses are due to the “…ability of travelers to use the Internet to research vacations and book their own trips,” the handbook read. “[It] is expected to continue to suppress demand for travel agents. An increasing amount of travel is also expected to be booked on mobile devices.”

As a result, being a travel agent is now a “useless job,” Global job site CareerCast said.

However, the situation is not as hopeless as it looks, Ms. Clemente said.

After all, Rajah Travel — which has been in the travel industry for nearly four decades — remains one of the few companies to survive, adapt, and evolve with the times.

As early as the 1990s, the company chose to invest in the right equipment and employ automated processes to maintain its position in the market.

These strategies allowed them to grow their products and services and become more efficient in serving clients. Over the years, the company has evolved from a mere inbound- and outbound-ticketing agency to a full-fledged travel firm and offers a range of services like corporate travel management and travel consultancy.

“The traditional way would be just to ticket, but now that can be fulfilled by a click of a button. If you’re there for the fulfillment, then you will go away. But if you’re there offering experience, if you’re there offering corporate clients you know good itineraries that fit their mold, then you’re OK,” she said. “Most of the travel agencies [today] are like that. With an airline booking tool, you wouldn’t be able to compare an airline with another. You wouldn’t be able to compare the stopovers, how long it is, what VISA you need, or even what the configuration inside the plane looks like. They wouldn’t tell you in comparison to another, and that’s our role.”

Automation helped roll out vacation packages

The automation RTC went through involved Business to Business (B2B) and Business to Consumer (B2C) technologies, which in this case, are booking tools that entail the exchange of services between the company and other businesses and clients, respectively.

Through these investments, RTC was able to roll out vacation packages to international destinations ranging from Asia Pacific, Europe, and North and South America; form partnerships with other global travel-and-tour businesses like Contiki, Insight Vacations, Star Cruises, and Norwegian Cruise Line; and provide unique services like its travel registry, which allows friends and loved ones to contribute to a particular trip eyed by the buyer.

Even with their range of offers, Ms. Clemente acknowledged the rapid rise of online travel agencies (OTA) and their increasing popularity among budget travelers, but pointed out that there are numerous loopholes in terms of regulation.

“As far as OTAs are concerned, it’s been a shift from one end of the pole to the other. It’s polarizing because there are those who would need an OTA to ‘market’ — so to speak — in venues outside of their place. Of course when you’re online, universally you can be seen,” she said. “Now for us as a travel company, the only question that we have now is how do you hold OTAs accountable? To what standard do you hold them up to? How safe is the consumer, or is it a “consumer beware!” attitude that the government would want to have in putting policies in place?”

She went on to say that the existence of OTAs also poses a kind of discrimination against travel companies such as RTC because most do not pay taxes.

“It may be cheaper but they wouldn’t be contributing,” Ms. Clemente said. “So who are they? How do they get away with this and again, to what standards do you hold them up to? We don’t mind having the sharing economy as long as we are under the same platform and we’re subjected to the same rules.”

Last year, RTC grew in several departments but a much of it was in inbound trips, which she ascribed to the overall campaign and policies put in place by the Department of Tourism (DoT).

Based on data released by the DoT early in June, the month of April recorded a total of 471,598 visitors to the Philippines which is 11.39% higher compared to the same period last year. Furthermore, a total of 2,073,851 tourists arrivals were recorded from January to April 2016, representing an increase of 14.25% versus the 1,815,202 arrivals in 2015. The biggest volume of visitors was seen in February with the tourism department recording 549,725 arrivals, 20.42% higher than last year.

Receipts generated from visitors for the first four months of the year grew by 12.34% to P86.66 billion from P77.14 billion in 2015.

Ms. Clemente, who is also the president of the ASEAN Tourism Association and the executive vice-president of the Tourism Congress, said that there are several provisions included in the Tourism Act of 2009 that “changed the paradigm of how you look at tourism.” These provisions include the National Tourism Development Plan, which she said allowed people to appreciate a plan over a longer time period, and the National Tourism Coordinating Council, which mandated the coordination of DoT with different government departments.

She said that among the successful partnerships formed by the tourism department was that with the Department of Public Works and Highways as it led to infrastructure and road improvements in remote tourist spots. But for her, the partnership with the Department of Transportation and Communication should have been given priority as well because there is a lot of room for improvement in the field.

“It’s not just the airports, it’s not just the aviation. It’s maritime as well,” she said. “It’s more resonant to talk about aviation because we are an archipelago, but if we also have means of traveling within the archipelago or from another place to us then it makes it a desirable way to go around. So I think that’s very important.”

As a member of both the public and the private sector, Ms. Clemente said she hopes whoever will be at the helm of tourism in the country be not only promotion-driven, but also policy-driven.

“Tourism is a very complex and yet a very meaningful endeavor for the economy because it’s really the most inclusive, if you think about it. If we have that paradigm in place then we should be OK,” she said. “The real business of tourism, as said by former tourism secretary Ramon R. Jimenez, Jr. is that it’s a people’s business. It has a big economic impact if you look at it and that’s why I want it to be policy-driven.”

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April Paulyn B. Roque (@aprilpaulyn on Twitter) is an English Literature graduate. When she’s not writing, she’s either reading dystopian novels or watching dog videos online. BusinessWorld Senior researcher Kia B. Obang (@kiaobang on Twitter) helped provide data to infographics designed by Margarita Samantha Gonzales (@famamfa on Twitter).