There's a light at the end of the tunnel

And it's not a train.

This has been a tough year for the travel industry, especially the retail distribution side. Even with doom and gloom economic forecasts, our agency started off with a bang this year and we had great booking activity in January and February. Then as suddenly the bookings turned on just after Christmas, they turned off in March and it seemed there was a race to the bottom to see which cruise line could cut prices the most. We wound up processing bookings four and five times, each time cutting our earnings as prices dropped. One need not be a business major to understand that's a process that can't go on too long.

Prices stayed down and even though volume was pretty good, earnings per booking have been well below the break even point for even the major Internet travel retailers. This has not been lost on travel suppliers, cruise lines in particular, because, contrary to popular belief, travel retailers still provide a most necessary service to their clients and their suppliers. After peaking at about 7%, online cruise bookings have fallen off and are now estimated to be a bit above 5% and even that is misleading. The company that publishes statistics on Internet vacation booking counts any reservation that starts on the Internet as an online booking even though the traveler may call a live travel consultant. I consider an online booking to be one that started on the Internet, finishes on the Internet and never involves a human. With that caveat, it is likely that online cruise bookings are substantially lower.

So where's the light? I think we have seen a firming up in cruise pricing in recent weeks at our agency, and maybe even some signs prices are increasing. Part of that stems from the reality that prices can't go down any further. Part of it is a growing sense of confidence among consumers. As a result, travel retailers who have the resources to hang on until next March will be able to survive practically anything. For them, there is a light at the end of the tunnel.

For others, the economy will claim them and they will merge, be bought, or go out of business. Either way, look for maybe a third of all travel agencies to be gone within two years, and maybe less.

Planning a vacation? Contact a local travel retailer and let them do the work for you.