The travel industry has arrived at a new destination.

Travel agencies, already reeling from the elimination earlier this decade of their main source of revenue—airline commissions—now also are adapting to reductions in consumer travel, first from 9/11 and now from the recession. Today, say those in the industry here, there are far fewer agencies, and they're filling their niche differently than before.

"There aren't many of us left," says Doug Huneywell, owner of Spokane Valley-based Cruises & Travel of Spokane.

The number of travel agencies now is a fraction of what it was 10 years ago. This year, there are about 35 agencies listed in the yellow pages in the Spokane-Coeur d'Alene area. A decade ago, there were about twice that many here.

The travel-agency industry was turned on its head when the major airlines reduced, then in 2002 eliminated, the 10 percent commissions they had paid agents for decades for ticket sales. That forced most agencies to begin charging clients fees for services they previously had offered to them at no charge.

"About 85 percent of our income was derived from airline commissions," says Judi Rowand, owner of Red Carpet Travel & Cruises Ltd., of Spokane. "Overnight, we had to reinvent the whole wheel."

"The corporate agencies that primarily sell airline tickets to corporations, they got hit hard first," because of the new fee structures, Huneywell says.

The bottom dropped out for many already-struggling agencies here when terrorists struck on U.S. soil on Sept. 11, 2001, and many people stopped traveling, says Marklyn Hallett, the office manager at the Spokane franchise of Travel Leaders.

"That was devastating to the industry," she says.

Following those changes, many agencies now focus more on travel packages, in part because cruise lines still offer commissions to agents, who provide cruise lines with most of their bookings.

Huneywell says, however, that when cruise companies slash their prices to attract business during an economic downturn, travel agents lose even more income, because they get paid a percentage of the overall price. So, even though agencies have begun to see at least some rebound from a falloff in travel due to the recession, their commission income is being held down by lower prices. Hallett says the recession has caused agencies to market more aggressively, sometimes by visiting corporate clients.

Other agencies, such as Travel Leaders, have seized the opportunity to expand by acquiring several smaller agencies here that otherwise might have closed over the past several years, thereby increasing their staff to 40 from five, Hallett says.

Hallett says the Internet has been a big factor in the changes that have affected the travel industry. Because the Internet is known for being a place to find low prices on everything—including travel—it has attracted more people to the world of travel, but also at lower prices, which means lower commissions, she says.

Still, Hallett and others who remain in the industry say that though the Internet has changed their business, in many ways it has benefitted them.

"Some folks view it as competition, but I view it as a tool," Hallett says.

"The Internet has helped the travel industry more than the consumer, because we save long-distance charges, and we get answers faster. My personal friends say, 'I'm sorry for you because of the Internet,' and I say 'Oh, you shouldn't be,' because we can see the cabins available at resorts and the same with airlines, we see what seats are available, we have that over most consumer sites," Rowand says.

Travel-related companies that rely heavily on the Internet, such as Spokane-based Magnuson Hotels, which helps independent hotels book room reservations, offer discounted rates for rooms booked through travel agents.

Instant communication afforded by technology advances such as e-mail and cell phones has become the norm, travel agents say.

Val Day, who started House of Travel Inc. while living in Spokane with her husband, Cary, says the Internet allowed the couple to shift from a 14-person brick-and-mortar business in Spokane to a home-based business located in St. Maries, Idaho, as the industry changed.

"With the phones and the Internet, I can do my business just as easily from the St. Joe River here in St. Maries," Day says.

Some travel agency owners say they've essentially gotten out of the airline ticket business, while others say they offer their clients the prices they would find on the Internet and evaluate whether a better deal can be had, for example, on a flight with fewer connections.

"We moved our business into cruises and tours and packages. These companies still are paying commissions. We provide a real value to the cruise lines and to our customers," says Red Carpet Travel's Rowand.

That's not to say, however, the company won't help its clients arrange airfares, Day says.

"We will get air for them if it's in conjunction with a tour, and we give them an option, too, of getting their own," Day says. She says her company also organizes international tours each year to sought-after destinations, such as South Africa and Italy.

"On the airline side of things, there are wholesalers we use for international travel that buy blocks of tickets and guarantee the airlines they'll sell a certain number. They discount them to us, so we can get really good prices for those," Rowand says.

Some agencies here, such as Travel Leaders, still handle a lot of corporate clients, but many larger companies or those that do a lot of travel have experimented with other options to keep their costs down, including hiring in-house travel employees or assigning a secretary the task of making travel arrangements for executives.

"Some of them have asked secretaries to get on the Internet to do travel to save those fees, but I think they've found in the long run the time involved hasn't been a cost saving for them," Hallett says.

Hallett says Travel Leaders works hard at capturing its corporate business.

"Our true value to our corporate clients is we save them time and money as a one-stop shop for everything," Hallett says.

Better-informed travelers

Travel agents here say that in some ways, they now can serve their customers' logistical needs better because the Internet has made it possible for people to research what they want to do. Because of that, when customers first contact travel agencies, they're better informed, but want the help of a travel agent so they don't lose thousands of dollars by booking through the Internet and having problems later.

"A lot of people will do research and pricing on the Internet—but on a larger ticket item, they like the safety net of a travel agent," Hallett says. She says people now generally have a pretty good sense of where they want to go before they visit a travel agent, making it easier for the agent to help them plan their trips.

People also now feel that traveling is within their reach when the economy is good, agents here say.

"It's funny to see how with older generations it was such a privilege for them to travel, especially a cruise or flying overseas. Now people feel it's a right to them," Rowand says.

And as people get older, they tend to use travel agencies' services more.

"I think a lot of them initially, when they are young and going to Reno or Las Vegas, they do it themselves. They feel confident, and they are looking for cheap prices. Then, when they hit their 30s they start looking for value, if they're on business or to going to Disneyland in their early 30s with children it makes a big difference" where a hotel is located and if it will still be in business when they arrive, Rowand says.

Agents here say, however, that they also frequently get calls from people who want to check to see if they are getting a good price on an Internet deal. Agents say they won't recommend any companies they haven't personally researched.

"The Internet is a fantastic tool, but anyone can put anything on a Web site. People don't always understand that," Day says.

Huneywell says that news travels so swiftly now that the travel industry is affected by news such as a pirate attack in Somalia or by stories about an outbreak of illness.

Hallett says Travel Leaders is experiencing some sporadic improvement in business now, and others have added other lines of business to their repertoire to augment their business. Huneywell, for example, also books conventions and meetings, and the Days operate a bed-and-breakfast in St. Maries.

"We hope there will be a pent-up demand that will be unleashed," Huneywell says.