Click to Print

The Myths and Realities of Internet Travel

Confused about the best way to book air travel? You're not alone.
July 1, 2010
URL: http://www.entrepreneur.com/article/205222

These days, it's hard to turn on the TV without seeing a catchy ad with a traveling gnome or a hovercraft, extolling the benefits of booking travel online. When ads become as ubiquitous as new car and beer commercials, you know what's being sold has become a commodity. It's time to dig deeper, but cutting through the clutter is difficult. As with most facets of the internet, information is everywhere, but knowledge is scarce.

As one might expect, the airlines want you to book your travel directly on their proprietary websites. Online travel agencies up the ante and claim to guarantee the lowest fares and hotel rates. Traditional brick-and-mortar travel agencies still exist too, and they want to help you manage your business travel account.

Throw in a hotel, airline and car rental loyalty programs to complicate matters further, and you've got a recipe for battle, with individual travelers pitted against corporate travel departments. It's been said the only thing tougher than managing employee travel is handing out assigned parking spaces in the company lot.

Before we examine the relative benefits of online travel booking sites, let's first make the observation that employees will often turn up their noses at the less costly flight options they would gladly accept when traveling on their own wallets. Unless your company has a clearly written and well-enforced travel policy, preferably followed by senior management willing to lead by example, attempts to control spending may be doomed to failure.

Booking on Airline Websites
Let's get the easy ones out of the way first. Airline travel websites are geared toward one thing: getting you to book seats on their planes without comparing any other options. It doesn't take a rocket scientist to know that United isn't going to tell you what American is offering, so it should come as no surprise that United will show you a six-hour, $266 connection between Los Angeles and Austin and fail to inform you that American and Southwest both offer nonstop service for $188. We're not picking on United; all of the carriers do the same thing on their websites.

Your grandfather may have referred to this simple economic truth as "Would Macy's tell Gimbels?" But today, Gimbels is as obsolete as Gladys the local travel agent, while Macy's is still thriving. So while times may change the players, buying travel on an airline website doesn't make sense unless you are only looking to fly that carrier, you know exactly what you want, and know what you're willing to pay to travel the route.

All of this is fine for leisure travelers or the savvy business traveler. For business travel management, use airline websites with caution. What's saved in booking fees could easily be lost on bottom line fares.

A Better Option : The Unbiased Website
So-called "independent" online vendors such as Travelocity, Expedia, Orbitz, Kayak, FareCrawler, Hotwire and Priceline generally offer a more useful and unbiased display of travel options. The sites gather their data by mining information from the various airlines' global distribution systems. By cumulating this data from multiple sites, the output is more user-friendly because it allows the user to specify multiple preferences. Output can be ordered by preferred airline, time of day, preference for nonstop flights, fare levels, and the number of connections. There may be times when it's worth taking a connection to significantly reduce airfares, and that information is readily available from these independent sites.

Others websites use a bid for service or blind vendor delivery system, which can be great for travel when the details of a booking aren't mission critical. We recently used Hotwire for a car rental, and the process worked flawlessly, providing a Budget car at less than half the rate we could have gotten through traditional online services. Still, business travelers are reticent to use these sites when they aren't footing the bill. Simple human nature shows us that traveler convenience outweighs benefits to the company in the absences of clear direction from senior management.

It's worth noting that some of the websites, notably Kayak and FareCrawler, invite comparisons with other sites, displaying the results from multiple booking sites simultaneously or as a part of their own output.

Online booking services have greatly improved their reliability over the past five years, especially with respect to international travel. As long as the traveler requires a simple roundtrip from Point A to Point B, online booking services should be able to do the trick.

What happens when the traveler is unfamiliar with the main destination, or when a trip involves two or more stops? In these cases, online booking services become much less helpful, and the traveler can benefit from the use of a good travel agent. Finding a good travel agent may be more difficult than it used to be, since many corporate agents know little about the world outside of their booking cubicles. Still, even a novice agent may be able to provide valuable information by tapping a wide range of resources not readily available from online agencies.

The airlines used to pay commissions to travel agents, but for the past 15 years, carriers have successfully shifted this cost to the business traveler and consumer. While booking charges have more or less disappeared for online bookings, using a travel agent means a fee must be paid as compensation for services provided to travelers. In a radical departure from normal legal channels, the travel agent is in an unusual position of dual agency--instead of being paid as an agent of the seller, payment is made more or less exclusively by the buyer. There are circumstances where commissions are still paid by the airlines, but generally, the cost of providing the services is borne exclusively by the traveler.