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June 14, 2011

Why Expedia went retro, recruiting travel agents

The problem faced by Expedia, Orbitz and Travelocity is that they always have extra inventory, no matter how many trips they sell direct to consumers online. They are revenue-driven companies like any other, and the more product they move the more money they make. So what to do about a warehouse full of airfares and hotel rooms and rental cars? Don't just sit there. Get a sales force. A live, breathing sales force, not a banner ad.

So Expedia has tried to ally with the industry's traditional sales force, the travel agents, who are profiled in Lorraine Mirabella's article in today's paper. The online travel agencies are the enemies of brick-mortar travel agencies just as Amazon is the bane of Borders. But Expedia began signing deals with travel agents in Italy and expanded the arrangement to the U.S. last year, says Travel Market Report. In return for commissions agents get extra software that helps them track tickets and plan trips. Here's TMR:

Expedia, which is currently marking the first anniversary of the U.S. launch of its Travel Agent Affiliate Program (TAAP), is a case in point. The giant OTA believes it has transformed its relationship with travel agents worldwide from that of competitor to supplier, enlisting them as an effective sales channel for its vast array of product in return for commission payments.

In the U.S. 1,840 agents have enrolled in TAAP during its first year of operation here, and there is no indication that interest in the program is slowing. Diego Pedrani, Expedia’s global director of travel agent distribution, told Travel Market Report the OTA signs up 100 to 200 new agent affiliates in the U.S. every week.

Posted by Jay Hancock at 9:04 AM | | Comments (0)
        

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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