Consortia Executives Stress Strength in Unity

by Michele McDonald

There is strength in numbers. There also is strength in unity. That’s why the push to attract consortium members to ASTA makes sense, according to chairman Roger Block.

“Without ASTA, this industry will be regulated and taxed,” he said. “We need the most united group we can have.”

In politics, money talks, but so do votes, Block said. An example is the Maryland bill that would have imposed a 6% sales tax on travel agency fees for booking hotel rooms in the state. It was passed by state legislators but vetoed by Gov. Larry Hogan after an intense lobbying effort by ASTA.

Block, who is president of Travel Leaders Franchise Group, spoke at a breakout session at the ASTA Global Conference in which six consortia executives outlined their models and their approaches to branding.

Independent agencies looking to link with a group should take a careful look at which model best meets their needs, he said.

Block said the franchise model is subject to a variety of regulations.

“If we license you to use a brand and charge more than $500 a year, we are a franchise,” he said.

But there are many differences in the ways franchisors run their organizations. McDonald’s, for example, tells franchisees what vendors they must use, where they must buy potatoes, how they must store potatoes and what oil to use to fry them, Block said.

In contrast, Travel Leaders recognizes that “each of you has an individual brand. We allow you to use our brand with your brand, but we don’t require it. And we don’t tell you what hours or days of the week you have to be open,” he said.

Alex Sharpe, president and chief executive officer of Signature Travel Network, said, “We are the anti-franchise. We’re white label. We’re going to do $11 million in direct mailings this year, and none of them mentions Signature.”

If an agency is a startup with no brand recognition of its own, “this may not be the way you want to go,” he said.

Ensemble, which began life as the Greater Independent Association of National Travel Services (GIANTS), has a very simple business model, Lindsay Pearlman, co-president, said: “Revenue, costs, check.”

As GIANTS, the group was among the first to unite to increase agents’ buying power, commissions, and clout through preferred supplier arrangements.

Pearlman noted that agents, owners, and suppliers all need to get something out of the relationship.

He said Ensemble chooses its partners carefully.

“Some suppliers have a consumer-direct strategy,” he said. “We’re very careful about that. Do they support the agency channel?” If so, he said, “We’ll stand by suppliers in good and bad times.”

Ensemble’s job, he said, “is to give you the tools to make money. There is money to be made in air, in FIT.”

MAST Vacation Partners is a small consortium of agencies in the Midwest, but it uses its size to its advantage.

“Because of our size, we can customize our programs,” John Werner, president and chief executive officer, said. “We can tailor our marketing programs. The biggest thing for us is relationships, with our suppliers and to one another.”

Virtuoso agents, who specialize in the luxury market, share the consortium’s brand.

“Our name is born out of our shared goals,” said David Kolner, senior vice president of global member partnerships. “It is the power of a shared brand and ethos.”

Kolner said Virtuoso’s consumer-facing components generate “tens of thousands of leads for its members.”

Virtuoso stresses the need for power in numbers, he said. “Are we growing as fast as Crystal Cruises is adding ships? When we don’t grow, our relevancy is diminished. We must band together as a channel.”

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