Outdated Brick and Mortar Model

 

 

 

For decades, brick-and-mortar travel agencies represented the backbone of consumer access to travel. Storefronts, neighborhood presence, and face-to-face consultation were the primary ways travelers booked flights, hotels, and cruises. But in today’s digital economy, this model has not just become outdated — it is being directly challenged by the very companies that once built their reputation on agency networks.

 

The most striking example is Expedia Cruises, a brick-and-mortar franchise business, competing directly with Expedia Group’s own online and AI-driven platforms. This creates a structural conflict that underscores why storefront agencies are an increasingly poor investment.

 

 

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1. Consumer Behavior Has Shifted Away From Storefronts

 

Travelers today no longer think in terms of walking into a local agency to “sit down and book a vacation.” Instead:

 

  • Over 80% of global travel bookings are now made online, either through supplier websites (airlines, cruise lines, hotels) or aggregators like Expedia, Booking.com, and TripAdvisor.

 

  • The pandemic accelerated digital adoption, as consumers grew comfortable researching, booking, and even managing changes entirely online.

 

  • Mobile access is now dominant: more than half of travel bookings are completed on smartphones or tablets.

 

Consumers expect instant access, 24/7 support, and self-service options — qualities that are fundamentally mismatched with brick-and-mortar storefronts limited by location, hours, and human staffing.

 

 

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2. The Cost Burden of Physical Locations

 

Brick-and-mortar franchises carry significant overhead:

 

  • Lease or mortgage costs for retail space.

 

  • Staffing and payroll for in-store agents whether commissioned agents or not usually there are staffing costs.

 

  • Utilities, insurance, signage, and local marketing.

 

By contrast, online platforms operate at near-zero marginal cost per customer. AI systems, websites, and apps scale infinitely without needing to add new storefronts or staff.

 

This structural disadvantage means that even if a travel franchise can attract customers, its profitability is eroded by costs that online competitors simply do not face.

 

 

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3. Even Expedia Competes Against Its Own Franchisees

 

Perhaps the most telling evidence of the obsolescence of storefront travel agencies is that Expedia Group itself directly undermines its own brick-and-mortar brand, Expedia Cruises.

 

  • Expedia.com and its family of online brands (Hotels.com, Vrbo, Orbitz, Travelocity, Hotwire, etc.) give consumers direct booking access to nearly every type of travel product, from flights and hotels to car rentals, cruises, and vacation packages. While they can “lead” customers to brick and mortar locations when assistance is needed this is only accurate with customer inputting correct location and rarely happens in comparison to total business driven through the online platform.

 

  • Expedia’s AI-powered platforms (including chatbot tools, predictive pricing engines, and recommendation algorithms) provide faster, cheaper, more accurate travel planning than a storefront consultant can offer.

 

  • Expedia invests billions annually in its digital ecosystem and marketing, ensuring travellers are funneled directly to its websites and apps — not to franchise storefronts.

 

In effect, a franchisee buying into Expedia Cruises is paying fees to a parent company that actively drives consumers to bypass the storefront altogether.

 

 

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4. The “Cannibalization” Effect

 

This creates a cannibalization problem:

 

  • A customer who walks into an Expedia Cruises store could just as easily book the exact same cruise online via Expedia.com. Customers using traditional agents may miss out from sources that a more robust AI system can identify.

 

  • If that customer ever does book online, the franchise earns nothing — but Expedia Group still profits from the booking.

 

  • As Expedia pushes harder into AI and direct-to-consumer strategies, the storefront franchise is squeezed even further, unable to compete with its own parent’s superior digital infrastructure.

 

This isn’t just theory — it is the lived experience of franchisees, many of whom have voiced concerns about competing directly with Expedia’s online dominance and an unwillingness from Expedia to fully link their rewards program with Expedia Cruises.

 

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5. The Futility of Competing with AI and Digital Giants

 

Expedia is not alone in this strategy:

 

  • Booking.com has no storefronts, relying entirely on digital scale.

 

  • Airbnb built its empire with zero retail locations.

 

  • Cruise lines themselves are investing in AI concierge tools, mobile apps, and direct booking platforms that eliminate the middleman.

 

Expedia Group knows this — which is why it pours resources into AI development and online marketing, while leaving its franchisees with a shrinking slice of an outdated model.

 

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6. A Model Facing the Same Fate as Blockbuster

 

The brick-and-mortar travel agency is following the same path as video rental stores, check-cashing outlets, and physical ticketing kiosks. Just as streaming replaced DVD rentals and online banking replaced neighborhood branches, AI and online platforms are replacing storefront travel agencies.

 

Consumers no longer see value in driving to a physical location to perform tasks they can accomplish instantly from their smartphone — and suppliers no longer see the need to pay commissions to agencies when they can own the customer relationship directly.

 

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Conclusion: A Business Model in Decline

 

The outdated brick-and-mortar model is a liability, not an asset, for investors. It imposes unnecessary overhead, attracts fewer customers, and faces existential competition not only from online disruptors but from Expedia itself — the very parent of Expedia Cruises.

 

When the company selling the franchise is also the biggest competitor to the franchise, the conflict is unresolvable. For modern travelers, the future is clear: they will book directly, digitally, and increasingly with the help of AI — not by visiting a retail storefront.

 

 

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