Internet poised to shake up travel

By KARYN SCHERER

The travel industry is bracing itself for a shake-up next year as airlines continue to put the squeeze on agents and the internet's role in travel bookings expands.

About a fifth of the country's 800 travel agents are estimated to have left the industry this year, and more are likely to go as outlets merge to survive.

Airlines want to cut agents' commissions from 9 to 5 per cent on transtasman fares, and from 5 to 4 per cent on domestic airfares.

And the industry is still coming to terms with the likely effect of the internet on their business.

Although several New Zealand travel companies have web sites, few enable customers to bypass agents and do their own bookings.

That is expected to change next year as two of Australia's leading travel companies launch New Zealand versions of their web sites.

Discounter Flight Centre is planning to have its site ready next month.

It will include a service aimed at the corporate market that will enable businesses to monitor their own spending.

Flight Centre is expected to face fierce competition from Travel.co.nz, which plans to launch a similar service in February.

Travel.co.nz, the result of a merger between Jetsave Travel and Gilpin Travel, was bought in September by Australian company Travel.com.au, and is part of a rapidly expanding global business.

Another major group, House of Travel, which last year took over AA Travel, plans to go online in April.

In the United States, only 2 per cent of travel bookings are made over the internet.

However, research companies predict this will go up to more than 15 per cent.

Consumers are being lured by convenience and price, but travel companies concede that convincing customers internet transactions are safe will be a tough job.

Although Travel.com.au has no retail offices, it says most of its customers still prefer to complete their bookings with someone over the phone.

The Travel Agents' Association chief executive, Peter Lowry, agrees that more travel agents are likely to disappear as the industry consolidates.

But he believes predictions that the internet will devastate the industry are being exaggerated by airlines and internet-only businesses.

He says most travellers appear to be using the internet as an information service, rather than a booking tool.

"It's very competitive at the moment and it's certainly been a complex and difficult marketplace over the last year," he says.

"Our changes are probably the biggest changes in 40 years, but I'm confident the travel agent is here to stay."