Do you think the days when airline commissions generated the bulk of travel agency revenues were the "good old" days? Look at the following numbers -- and think again. The commissions that airlines paid agents increased every year until 1998, when they peaked at just a little over $640 million, Lee Rosen, president of TRAMS, told attendees at the TRAMS Technology & Marketing University 2007, held last week in Las Vegas. Within the next five years, commission caps and cuts took their toll, and airline commissions for agents processed through ARC disappeared. In response, the agency community shifted gears and focused increasingly on complex, high-margin products such as cruises and vacation packages. This year, Rosen estimates that travel agency commissions from cruise lines will probably exceed $1 billion.

What's the moral of the story? The complex leisure travel that agents now sell holds far more financial opportunity than air ever did back in the seemingly halcyon days of airline commissions and overrides. Rosen said this is an arena in which agents have a big advantage over online mega-agencies like Expedia. That advantage is the personal relationship agents have with their clients. "We know our clients. We see them at soccer games and churches and in the grocery store, we have relationships with them that Expedia doesn't have," Rosen said.

But the Expedias of the world do have one advantage over traditional travel agents: A single database that aggregates the purchasing and travel history of all of their clients. All their automation is in place. They automatically have every client's email address. They can easily go back and pull up travelers who have booked a trip with Expedia, but who may not have purchased travel insurance. That's what Rosen calls the "one database benefit." Suppliers can look at that single database, see its purchasing power, segment that database to see what kind of products will appeal to the various types of customers in that database and design customized campaigns designed to appeal to those clients.

That's tougher to do with an individual agency's database, no matter how up-to-date and detailed it is, because suppliers have to do it with many agencies. But technology and business practices on the travel agent side have now developed to the point where agents can begin to enjoy the benefits of that kind of clout -- without ever losing control of their own client database, Rosen said.

One recent development is synchronization. In the same way many of you sync up your Palm Pilots and other PDAs with your computers, it's now possible for what Rosen calls "separate but equal" databases to sync up their databases into one central database and keep that central database up to date with daily syncing. It's automatic and takes no extra work on an agency's part. Many suppliers can now see the aggregate of that data -- not customer names, of course, but the purchasing power and the type of travel those clients take -- and use it to create a variety of highly targeted marketing campaigns that individual agencies can use, if they so choose.

Rosen said that agents still have total ownership and control of these databases. "It's your program," he said. "You choose the suppliers, you choose which clients get what, and you are in control. You are just outsourcing."

For example, an agency might be a member of the Signature Travel Network and choose to use its marketing program. Alternatively, an agency might choose to participate in multiple marketing programs -- one through the consortium they belong to, one through a particular supplier, such as a cruise line, or one through a destination, such as Las Vegas. Many agencies are pooling their numbers to reap the benefits of the clout derived from the combined purchasing power of their customers.

The attraction for suppliers is that they're trolling for business in one giant database instead of many smaller ones. Suppliers can measure their returns on these marketing initiatives to see how well they worked.

To show how using a central database works, Rosen used the example of an initiative to sell insurance. The three travel agencies that participated in the program had a total of 1,000 names but had email addresses for a little less than 700 of them. The participating agencies sent out emails customized with their agency information and that initiative generated 172 sales of travel insurance policies.

Suppliers want to work with agencies that have good data on their customers, because it helps target consumers with travel products that match their tastes and desires. That helps suppliers sell travel, helps agents sell travel, and means customers are taking vacations that make them happy. And that's good for everyone.