By: David J. Wardell

© 1999 By: David J. Wardell.  Reproduction or redistribution in any form without written permission is strictly prohibited.

Michael Batt, President of the Carlson Leisure Group, borrowed an image from the movie "The Wizard of Oz" and applied it to Internet travel.

In an excellent recent speech to Carlson Wagonlit Travel associates, Batt said:

"'Pay no attention to the man behind the curtain,' was what the 'Wizard' sought to tell Dorothy and her friends when trying to make them believe in fantasy."

Precisely, Mike. Self-perpetuating fantasy is a substantial part of the engine behind the "doom-machine."

Part of the problem appears to be that people don't read, or if they do they don't understand what they read. Batt points out that Internet travel companies lose an average of $20 per ticket issued.

That conclusion is backed-up by numerous financial disclosures which the public entities in the field are required to make. Moreover, some of the disclosures by Internet-focused travel companies seeking public offerings reveal staggering losses over a period of many years with no expectation that they will ever be able to make money.

Some "Wizard" should point out why this is a good business or why anyone should be upset that the opportunity to be like them may be gone¾ and with it perhaps the opportunity to lose the type of money they lose.

I am not cool either to technology and its benefits or to electronic commerce (quite the contrary), but "Wizardry" doesn't impress me. Agencies of all sizes have substantial competitive assets that the exclusively on-line world lacks.

Successfully adapting to new types of competition and changing industry economics involves identifying these assets and finding new ways to employ them.

Internet-based selling currently recognizes the concept of "attractors," which are, simply put, the bag of tricks that bring people to your electronic "site" so that you can sell to them.

One reason exclusively on-line travel sales are so expensive is that they have few natural attractors, so they have to spend large sums to buy or create them. One manifestation of this is the never-ending on-line quest for "lowest fares," which is based upon the assumption that this "attracts" potential customers.

In the real travel business world, that type of attractor takes some effort to replicate, but it can be done. There's nothing unique about a cheaper price.

Agents, however, have a physical presence that the exclusively on-line crowd does not and will not. Batt observes that 62% of every on-line shopping dollar goes to "bricks and mortar retailers that have on-line operations," and that 56% of on-line travel customers claim to have completed a reservation with a physical agency after shopping on-line¾ two phenomena that have routinely been predicted in these pages since 1995.

Agents enjoy other "attractors:" The expert knowledge that really makes a difference to the customer is unlikely to be built into exclusively on-line software anytime soon. Agency customers also want to remain loyal to the established companies they deal with.

There are a number of reasons this is so, but perhaps the most important is that few customers want to invest the time and money to train another entity out in the Internet ether as to what it takes to handle their business. This is why an electronic strategy tied to a physical travel operation (another long-time prediction here) has recently become popular, and why is will prove exceedingly difficult for the on-line "Wizards" to overcome.

Integrating the immediacy and flexibility of on-line information with the physical infrastructure and expertise customers have repeatedly demonstrated that they want to buy is what successful travel e-commerce is all about.

Far from being foreclosed to agents, this field is just emerging and has little to do with the on-line "Wizards" who get all the attention.