In Today’s Tough Business Climate, Trade Groups Play Critical Role

TORONTO, Ontario – The business environment for travel agents may be challenging today, but it would be far far worse were it not for the advocacy work of North America’s two leading trade associations – the Association of Canadian Travel Agencies (ACTA) and the American Society of Travel Agents (ASTA).

That was the message from Zane Kerby, president and CEO of ASTA, and David McCaig, president and COO of ACTA, at Travel MarketPlace here last week. The pair spoke on a panel about “Issues Facing the Travel Agent Community and How Associations Can Meet them.”

“If you think that not everything is perfect with the airlines and with other suppliers in this business, just take away ASTA and ACTA and see what it’s like then,” McCaig told agents attending the inaugural conference, which was hosted by Travel Market Report and sister company Acclaim Meetings.

It takes a village
But while the associations’ efforts benefit all travel professionals, more agents need to support their work by becoming members and getting involved, the executives said.

“It takes a village,” said moderator Anne Marie Moebes, co-publisher of Travel Market Report.

“Individually as agents you can only do so much. But aggregated through your association you can do so much more, whether it be with suppliers, with consumers or with the government.”  

Winning battles
McCaig and Kerby underscored their message by spotlighting the organizations’ key wins in recent battles.

McCaig pointed to ACTA’s successful fight to reverse new bank fees for IATA bank settlement plan (BSP) wire transfers. When some banks began charging those fees in January, “I went pretty crazy on IATA,” McCaig said.

As a result, IATA agreed to find a solution and to compensate agencies who have paid the fees. McCaig told audience members that agents will be receiving a form shortly that they can use to get their money back.

Powerful interests
In the U.S. the travel agency community is up against some “really powerful interests” that determine the rules of the road for businesses, Kerby said.

“The regulatory environment is getting more challenging, and the penalties for non-compliance are getting bigger. That’s why it’s important to have someone in Washington looking out for your business,” he said.

Canadian agents are affected by U.S. regulatory issues as well, he pointed out. (See sidebar.)

Supplier competition
But while regulatory issues are a huge challenge, Kerby named heightened competition from suppliers as the No. 1 issue facing agents today.

“We’re in an age of personalized offers to consumers [from suppliers] and that is only going to get bigger,” he said.

The issue of supplier competition was also on the mind of at least one agent in the audience, who asked, “What do you see happening in the next five to 10 years with the pressure suppliers are feeling to do more business direct to the consumer?”

McCaig replied that companies often try different strategies, like going direct. “Then they find out the return isn’t actually there, because there is no yield if you go direct, especially if it’s through the OTAs.”

Getting the data
Suppliers are pressured by shareholders “to squeeze the distribution channel and get a few more points of revenue and profit,” Kerby said. “But the reality is that travel agents bring suppliers their most lucrative customers.”

Getting hard data to support that assertion is critical, Kerby said.

“We have to get the numbers to back up our story. If [we get those numbers] we can take this to suppliers and say, ‘Don’t squeeze us; it’s foolish. We’re the ones who are telling your story. We’re an extension of your marketing program,’” he said.

“When things go wrong, and they do, [agents] are the people out there talking people back into travel, talking people back into getting onto the ships. But we need the science behind the story and it’s hard to get to.

“I’ve been at it for six months, and I still haven’t been able to crack it yet,” Kerby addeed. “But when we do, we’ll have a valuable resource for the entire agency community.”