ASTA’s Govt. Agenda: DOT Rules, Visa Waiver, Tax Issues – and More
This is the first in a series of articles about travel industry organizations’ top priorities in government relations this year.
While pleased with the recent presidential Executive Order on travel and tourism, ASTA still sees plenty of government-related challenges ahead – everything from DOT rule changes to what defines a small business.
ASTA CEO Tony Gonchar spoke with Travel Market Report about the organization’s advocacy role and his view of the biggest issues, whether generated from the White House or City Hall, that could affect the way travel agents do business.
What do you consider the most important elements to come out of President Obama’s recent Executive Order on tourism?
Gonchar: The creation of a task force overseen by the secretaries of Commerce and the Interior that is charged with creating a national tourism strategy is truly a positive, beautiful thing.
The issue of visa waivers is also very significant, including the call for new visa processing offices in China and Brazil. And so is the support for expedited processing of frequent travelers passing through airport security. (See “Jubilant Industry Leaders Hail Obama’s Travel Strategy,” Jan. 23, 2012)
These are very big things. The industry should be very excited.
Why are these issues important to travel agents?
Gonchar: In the case of airport security, shorter screening lines mean happier travelers. And happy travelers travel more. We’re very much concerned about the bookend experiences for travelers – the experience as they enter the travel process and the experience as the exit. It’s about getting home safely, but still having a pleasant experience.
Visa waivers for travelers entering the U.S. is about inbound travel. Do U.S. travel agents have a stake in that?
Gonchar: It’s an indirect impact, but still very important. When foreign travelers spend, there’s an echo benefit – for the hotel, for the Starbucks employee and many others. People have more disposable income and they can travel more. There’s a ripple effect through the entire economy.
ASTA has been active regarding changes to Department of Transportation (DOT) rules. Please elaborate.
Gonchar: Changes to DOT rules have been and continue to be a major focus for us. Early last year new rules were designed to make air travel better for consumers – the Passenger Bill of Rights. We’ve seen that the DOT has levied some fines on those airlines who have not stuck within the time limit of being on the tarmac. We believe consumer rights are important.
The second phase of these new rules, which went into effect on January 24 and 26, could have an impact on how travel agents do business. These are rules pertaining to full-fare advertising, restrictions on post-purchase price increases and baggage fee disclosures.
If agencies are unaware of these rules, they could be fined. Or, if they are aware, they may need to make big changes to programming and in their training of frontline agents.
We recently did an on-demand webcast, which was also open to non-ASTA members, about six critical things you need to know about these new rules. It’s very important for agents to understand this. (See “An Agent-Friendly Guide to New DOT Disclosure Rules,” Jan. 26, 2012)
What’s coming up next with DOT rules?
Gonchar: The third phase, which will go into effect next year, has to do with airline ancillary fees. The issue for travel agents is whether or not they will have access to fee information and be able to transact on those fees.
The airlines view ancillary fees as proprietary information. We’re saying that without that information, travel agents can’t provide what they need to. We want to see more transparency in how these fees are charged.
ASTA recently commented on a proposed DOT requirement that websites be accessible for the disabled, saying small businesses such as travel agencies should be exempted. You also filed comments with the Small Business Administration in support of raising the threshold for what defines a small business.
Gonchar: We are looking at the definition of what a small business is and how they are recognized by all government bodies. If the definition is brought too low, it could create overwhelming expense for a small agency.
For instance, requiring a website to be accessible for the handicapped – meaning that it would have to be voice-activated and have elaborate video and captions – places an enormous burden on agencies. It would be burdensome even for the largest agencies, but at least they have web development people. For small agencies, it would truly be excessive.
Is ASTA involved in measures on the state and local level? What is of concern there?
Gonchar: We’re very involved at the state and local level, as we see so many cash-strapped governments looking for new ways to extract revenue. It’s like they are looking for coins in the couch cushions. We want to make sure that travel agencies are not facing local taxes that are over-burdensome.
We are working on more actively using our network of ASTA chapters throughout the country. We are encouraging them to be more active in grassroots legislation and to create more public awareness of the value agents provide.
How about the issue of Independent Contractor status?
Gonchar: ASTA is a member of the Coalition to Preserve Independent Contractor Status, which is designed to allow businesses of all types to hire and/or be independent contractors. A lot of how the travel industry is evolving is through the host agency-independent contractor model.
Taxation can increase and make it impossible for people to hire independent contractors, based on the rigorous filing process involved.
This is a state-by-state issue and there’s nothing pending right now. However, we are monitoring things closely.
How would you assess the perception – among the public and in government – of travel agents right now?
Gonchar: Agents have been getting some good press lately. The discussion has moved away from, ‘Are there still travel agents?’ to, ‘Where can I find a good one?’ So it’s an exciting place to be in the industry right now.
As we go forward, an important development is ASTA’s consumer-facing website, travelsense.org, where consumers can find an agent. More people are realizing that they want the guarantee of an agent’s experience.
We’re seeing more momentum and this makes it easier for us to have conversations on Capitol Hill.