Green Musings of an Eco Resort

Sunday, January 16, 2011

Decline of the Airline Wholesalers?

Recent Times article on the retreat of American Airlines and Delta from online bookers

It is no secret that this year airline tickets have taken a gigantic hike in prices. We have certainly felt it here at Maho in our conversations with you around property and also on the phone when reservations are canceled due to a lack of affordable prices. But this issue extends beyond Maho Bay. It extends to our entire industry in the USVI as well as any tourist destination in the states that is generally accessed by air.

Specific to St. Thomas/St. John is the fact that our airport refuses to open earlier or close later. There are many budget airlines such as AirTran and Jet Blue that would be more than happy to fly here at their regular budget prices if they could land later. It is much cheaper to depart airports in various cities in the US on later flights which is how many budget airlines are able to keep their fares lower. The flight times may not be as convenient, but to save $300 per ticket I would have no problem spending my first night in a hotel on St. Thomas when arriving after ferry service ends. When traveling with a family those savings can really add up.

There are some major changes going on right now in the wholesale ticket market with the recent departure of American Airlines from Expedia and Orbitz and Delta from other various travel sites. Basically the wholesalers were charging a high percentage to the airlines and felt that because they gave them so much business, the airlines would not be able to survive without them. American and Delta seem to be testing this theory.

What are the implications? In recent years there has been a huge decline in the use of personal travel agents. It has been one stop deal shopping on major travel sites. Enough options were provided that surely there could be no better way to book travel, even though airlines like Southwest have refused to have fares searched anywhere but their site and are known for low fares (although not yet to the VI). But what will happen when word gets out that you can't actually find all of the flights offered because some of the bigger carriers are pulling out? Sites like Kayak and FareCompare will start to gain even more momentum. You cannot purchase through these sites, but they do a great job of showing you what is available. Personal travel agents will also possibly gain some ground back as well. The industry is changing, hopefully for the cheaper.

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