We all know that OTAs, mobile apps and the sharing economy are making a big splash in the luxury travel industry. In one of our previous blog posts, we talked about how this technological trend is affecting hospitality companies. With the general decline of traditional travel companies (according to the Bureau of Labour Statistics, the number of full-time travel agencies in the U.S. went down from 124,000 in 2000 to 78,800 in 2018 and is projected to decline further), it seems like the rapidly growing sharing economy, OTAs and new emerging travel apps are posing a serious competitive threat to traditional travel agencies. 

So how does the future of luxury travel agencies look like?


At first glance, it might seem like traditional luxury travel agencies and tour operators are not at risk. After all, online booking platforms, such as Priceline, Make My Trip, Expedia or Kayak have a very strong focus on price-conscious travelers (best deals, special discounts, coupons, and so on). It is highly unlikely that an affluent traveler will go to Booking.com to find the most luxurious suite and then move to Kayak to get the best deal on flight tickets.

luxury travel agencies

However, there are a few niche players focused solely on high-end travel and experiences: Splendia, newly launched Airbnb Plus and Airbnb Luxe, luxury hotel collections, such as Relais&Chateaux, and, of course, numerous mobile apps, from Luxury Retreats to JetSmarter. This diversity of online platforms and apps is surely understandable, as modern travelers, particularly millennials and Gen Z are quite demanding when it comes to technological convenience. Combined with the assumption that younger generations, unlike boomers refer booking their vacations solely online, the outlook for traditional travel agencies is quite bleak.

So, the war is lost then?


Quite the opposite. While the emerging technologies definitely present certain challenges to the whole travel industry, there are also a lot of opportunities to differentiate and establish oneself as an innovative and one-of-a-kind business.

Younger Travelers, New Needs

Let’s start with the previously mentioned common assumption that millenials and Gen Z prefer booking everything online rather than using the travel agency services. According to the Travelport’s 2020 Traveler Research, more than 50% of millennials almost always consult with travel agents, compared to only 20% of Gen Xers and 8% of matures. Millennials and Gen Z are yearning for authentic and purposeful experiences, and that is one of the core things that a luxury travel agency can offer.

Highly-Personalized Services

One of the defining characteristics of an affluent traveler is the strong desire for a highly-personalized service: from the moment they decide they want to plan a vacation until the very end of their trip. This is where traditional travel advisors have a big advantage over the OTAs, mobile apps and the sharing economy platforms: none of the latter can offer a personal and unique experience, that a lot of travelers, especially the younger ones are looking for.

Smooth and Seamless Experience

According to the same Travelport’s report, more and more travelers are feeling frustrated with the increasing complexity of the online booking process and the lack of human interaction. In other words, instead what they are looking for is a smooth and not overly complicated experience, that translates both online and offline.

How can a travel agency use these opportunities to their advantage?


The best way to take advantage of these opportunities is to invest in your own luxury-focused online direct marketing. A lot of travel advisers are focused solely on getting their business via referrals, industry trade shows or other networking events. In one of our past podcast episodes on the common issues that luxury travel agencies are facing in today’s market, we discussed why this approach is not sustainable in the long-term, especially if a company owner or a marketer are focused on scalable business growth.

luxury travel agencies

Instead of spending budget and time on unconnected marketing efforts, it would be better to adopt a more open-minded approach and focus on designing a coherent online experience – a custom digital marketing funnel based on a growth (direct) marketing mind-set.

A great luxury travel marketing funnel should incorporate a smart mix of both brand and direct marketing tactics.  It will not only allow travel marketers to differentiate their agency and communicate their unique value in contrast with OTAs or other online platforms, but also to reach and connect with exactly right people through the mix of carefully selected niche luxury media.

One of the biggest benefits of an online luxury marketing funnel is that travel marketers retain full control over their customer’s journey – from the moment they discover the travel agency all the way to the call-back or appointment request, and the actual trip planning process. Another significant benefit of a well thought-through funnel is the increased number of referrals and word-of-mouth, which is crucial for luxury.

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