At work, it used to be that we had to book all our flights through travel agents. I was one of the many people disobeying that rule as all we were booking was Aer Lingus and Ryanair anyway and it is pointless to have someone else click through the airline's website and then charge you for that. If I remember correctly, the markup was around €30 per flight for absolutely nothing. Also, it took several days for your flight request to be forwarded to the travel agent by which time the offer you were aiming at was often gone already. And finally, when booking myself, I can add my frequent flyer number. When booking through travel agents, there was no provision for this.
The higher-ups seem to have copped on. Now, the rules are book through travel agents or a budget airline directly.
But we were talking mostly about holidays, so let me move on from work travel: I have been booking holidays myself for ages now and never needed the help of a travel agent. I did try this year as I was going to Russia and organizing the visa is tricky. Well, it turned out the brick-and-mortar place specializing on travel to Russia here in Dublin first of all could not help me because I am a UK citizen, second would have charged me a fortune and third would have sent me to the consulate in person to sort it out... I went with an Internet company, mailed them my passport and got it back with a visa inside for a fraction of the cost. Sorry, high street travel agents really are a thing of the past. I used to believe their experience would help with tricky, complicated cases - but I have learned otherwise time and time again. All they seem to do is sell overpriced cruises, flights and hotels to people who do not know any better. Fair enough, that is the service they offer and if people are willing to pay for it, such are the workings of a market economy. But I would not be surprised, as more people cop on how Internet bookings work, if less and less walk into a travel agent to book a flight.
Of course older/less tech savvy people will have a harder time. But guess what, they will do what they always do in such situations: Ask their kids. I am a computer scientist and of course I have turned into the entire family's go-to guy for tech problems. Same goes for Internet bookings, eBay transactions, Amazon and the like... If they cannot figure out how it works, they ring me. I may not like it, but this is what people naturally do - ask someone in their family who might be able to help rather than talk to a travel agent, having to pay to get the same questions answered.
I certainly feel your pain - you were offering a service that seemed important and valuable but that you are suddenly finding is no longer required. The world keeps changing, services become obsolete. There used to be a guy operating the pump at each petrol station. He got cut. There used to be a guy selling tickets on every tram/bus. He got cut. There used to be travel agents. They, eventually, will disappear as well... People have learned how to fill their tank, how to get tram/bus tickets - they will learn how to get airline tickets as well. And the upside is, this frees up more money to spend on fun things. Restaurants will not suffer, they will benefit from people having more money in their pocket to go out for a meal rather than spending it on an overpriced holiday.
As a final point, I for sure actually enjoy the bargain hunt on the Internet. This may not be true for everyone, but I do choose my destinations by where I can get a return flight for less than €30. I did book a dozen hotels using Expedia's £40-off-a-night promotion. I booked even more using HotelClub's $50-off-a-night promotion last year. I never got a rental car from any of the big companies as there always is a cheaper small place... Travel agents do not offer me the flexibility to do any of this. I know for a fact that given my budget, I could have done maybe 20 trips if I booked through travel agents. Booking over the Internet and using each promotion to its very limit, I got almost a 100 trips for the same money.