How does the commercial travel industry work?

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although I hear the airlines are now cracking down on this

JAL ex-Japan for one seems to be playing this game. Auto-cancelling sectors, and plenty of availability for that fare bucket when the agent establishes a new PNR, but try and add it back to the existing booking - nada (D class).

As always, a good TA beats them at their own game - we used a CX codeshare on the JL instead. Sorry JL, that yield management game failed.
 
This is an interesting debate. I have used a mixture of TA and online bookings. I used a TA a couple of years ago when I wanted to do a cruise and think I got a good deal from discussing with friends but when I wanted to book a hire car she quoted me over $500 when I could get it for about $340 and when I questioned her she got a bit p!ssy so I haven't used her since.

I want to do some repositioning cruises and some RTW and I want someone who understands SC and my quest to become QF LTG (only 967 to go) and then I'll be concentrating on the best J flights I can find.

I did have a trip to Russia a few years ago that I was going to do myself and was discussing it with our corporate TA who offered to do it all for me (and I agreed as I was busy and she said she'd make sure nothing cost me more than what I'd found) and then the tour company went bankrupt when I arrived in Russia and the TA (Corporate Traveller) were fantastic and very welcome
 
I no longer use a TA, however I strongly suspect the TA's which are doing well do not compete on price. Whilst you certainly have the flight centers of this world doing quite well, this is more because of their buying power, and the sheer number of sales they make.

The TA's which continue to exist and do well are those who do the value-add, not try to compete on price.

For example, the time saver TA's are are the ones who I could call up and say I want to fly to LAX next week and stay for a week and then hang up with no real additional information, and who will then go and organise my flights, hotels and car hire based on that 2 minute conversation and their knowledge of my travel habits.

Another type is the location expert TA's, they are the ones that know specific locations so extremely well, that they are better informed about a location than wikitravel. They are the ones which can plan out an itinerary as if they where a local.

The days of a TA booking a simply SYD-MEL flight (and nothing more) are over, and those who simply compete against the airlines booking engines are living on borrowed time, but as a profession I still see TA's existing and doing the value-add in 20 years time.
 
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