OSSN Acquisition: A Competitive Issue?

CCRA Travel Solutions’ acquisition of the Outside Sales Support Network (OSSN) is a good strategic move for both the company and OSSN despite the possibility that it may raise competitive issues from other home-based groups, according to CCRA president and CEO Dic Marxen.

“It certainly could and we have taken that into consideration,” Marxen said of whether the OSSN purchase might affect the use of its products and services by other home-based groups and host agencies.

Fort Worth-based CCRA’s services include a hotel booking engine and negotiated rate program, an airline contract program, and a 24-hour reservations call center.

“We may lose some business but in the home-based market, agencies are very, very independent no matter who they belong to,” Marxen said.

“We have some products and services that are either unique or provide better commissions,” he said. “So I would say, let’s see what happens in a few months; I’m not worried.”

Operating separately
CCRA announced its purchase of OSSN—an association representing some 8,000 home-based agents—on Tuesday. The deal includes the company’s acquisition of The Travel Retailer Universal Enumeration (TRUE) program, an agent ID booking system developed by OSSN.

Both OSSN and TRUE will continue to be operated separately as wholly-owned subsidiaries of CCRA, said Marxen and OSSN president Gary Fee.

“Our intent is to keep them exactly the way they are today,” Marxen said. “The [OSSN] agents hopefully will say there is absolutely no change in their membership.”

Good for both
The acquisition served both entities’ needs from different perspectives, said Marxen.

“They [OSSN] need more and new services and, more importantly, higher commissions from us,” he said.

“We needed a distribution channel in the leisure and home-based market and they [OSSN] have it,” Marxen said. CCRA’s research found the corporate travel market—a CCRA strength—is not growing while home-based agents have come to predominate the leisure travel market, he added.

CCRA also plans to make the TRUE system available to agents abroad, enabling it to expand its services to a global network of agents and suppliers.

Fee said that move will solve the challenge faced by international agents who have lacked recognition by industry suppliers.

A surprise
The deal with CCRA had been in the works for nine months, according to Fee.

“CCRA has been an allied supplier member for a number of years, so it [the acquisition] is no surprise,” he said.

At least one host agency executive, however, was surprised.

“I was really surprised; I just don’t see the synergy there,” said Kelly Bergin, vice president of the Outside Agent Sales Integration System (OASIS).

Bergin said she’d have to take CCRA’s ownership of a home-based agent network like OSSN into consideration in using its services.

OASIS agents do a “fairly good amount” of business now with CCRA’s hotel booking engine, she added.

“There are a lot of different avenues to book hotels though; it’s not like CCRA is the only one in that space,” Bergin said, adding that its ownership of OSSN “will probably be discussed” by the Professional Association of Travel Hosts (PATH).

Maximizing exposure
Scott Koepf, senior vice president of sales for host agency Avoya Travel, said he expected a sale of OSSN “for it to continue to grow.”

“But to some extent the purchaser surprised me,” Koepf said. “CCRA is not an association per se and there’s always somewhat of a dividing line between suppliers and vendors; someone selling versus an association.

“Knowing CCRA though, they obviously know where the difference is and will probably be a good owner,” he said.

“CCRA will maximize it’s exposure through the OSSN network and that is wise positioning, but beyond that I would hope it won’t do anything more than that.”

With a business model that focuses on cruises, escorted tours and resort packages, Avoya doesn’t do much business with hotel booking services like CCRA’s, Koepf added.

Agents’ take
Agent reaction to the sale was mixed.

“I believe this merger makes sense,” said Sandy Anderson, owner of Riverdale Travel in Coon Rapids, Minn., a Travel Leaders agency.

“It will enable TRUE agents to have more access to  CCRA’s hotel, call center and air contracts,” she said.
 
“If an agent wants to be truly independent this may give them more resources.”

But Michelle Duncan, president and CEO of Odyssey Travel in Centreville, Va., a NEST agency, called TRUE “just another type of hidden, multi-level marketing way of making a person claim they are an agent.”

“If one is a true professional they should have their IATAN card or CLIA certification behind them,” she said.

“The TRUE designation was another way of sending the wrong message into our travel profession.”

Andrew Sheivachman contributed to this story