USTOA Prez: Commissions Will Remain Strong

While agents may be facing shrinking commissions and growing competition from consumer-direct sales in other sectors, they can expect continued strong relations with USTOA tour operators.

That was the message from USTOA President Terry Dale in a conversation with Travel Market Report. Dale also spoke about the organization’s increased advocacy role on Capitol Hill, new resources for travel agents and the outlook for tour business.

Should agents be concerned that tour commissions will erode as they have in the cruise industry?
Dale: Our tour commissions have been steady, solid and consistent.  You don’t hear comments from agents on this. I really don’t see any indicators of this happening.

A huge issue for agents is suppliers who sell direct to consumers. Is this happening with tour operators?
Dale: I don’t see any red flags in the tour industry, especially regarding the escorted and guided product. For our members within the guided category, over 90% of what they sell is sold through agents. I don’t see that wavering one bit. It’s a mutually respectful partnership.

Does USTOA have any new education or training resources in the works for agents?
Dale: We will be rolling out our first training program for travel agents during the first half of 2014. We are making final vendor selections now and will be putting together a curriculum in January.

It will feature 47 corporate members from USTOA who operate over 150 different brands. Even though some of our members already offer online training, this will be the first time their training has been offered in one centralized place.

Are there any upcoming USTOA marketing initiatives agents should know about?
Dale: We’re recognizing the potential of social media for engagement with our customers. We’ve started offering Facebook chats in which a CEO of one of our tour operator members is available for 45 minutes on Facebook.

A travel agent can submit a question and that CEO will respond. It’s another way to gain access to the leadership of USTOA that goes beyond hearing a CEO on a panel at an industry conference. It’s an opportunity to have a conversation.

What’s the outlook for the tour business next year?
Dale: The overall feeling is that 2013 was a positive year and that pre-sales for 2014 are even more so. There’s an upbeat feeling about business prospects. I think the world will continue to be unsettled so there will be pockets that will be challenging of course.

How is the nature of the tour business changing?
Dale: People no longer want to just jump on a bus and take a tour. They want to live like a local. That means meeting artisans, historians, people who cook the regional dishes that have been in their families for years. They want to see what makes a culture unique and special. So we continue to see more of these options integrated into the tour experience.

Some studies have indicated that tour products are becoming increasingly important to agents, even cruise specialists. Do you see this happening?
Dale: It’s not surprising that tours are a growing focus – they’re good for the bottom line and offer strong commissions. Agents are realizing that it’s important is to have a diverse portfolio that includes both tours and cruises. They actually complement each other.

As people take cruises to different parts of the world, it whets their appetite to go back to a destination and see more of it through a land tour.

Has USTOA, like other industry groups, stepped up advocacy efforts in Washington?
Dale: Advocacy has become a bigger priority for USTOA. We’ve engaged a lobbying firm in D.C. and we do regular visits with elected officials. We also keep up communication with DOT.

We have seen rules that have been written in the past that adversely impact our ability to do business. Shame on us if we aren’t down there in the Beltway educating officials about the consequences of these rules. It’s our responsibility to be proactive.

What issues are foremost on your agenda?
Dale: Right now we’re especially concerned with the possibility that the DOT may establish new rules requiring sellers of travel – tour operators and travel agents alike – to disclose to their customers any commissions or fees they are paid. We strongly oppose this.

We’re also concerned that DOT is looking to establish service standards for sellers of travel. That makes me scratch my head – how would you ever establish this?

Are there international travel issues USTOA is monitoring?
Dale: A big concern to us are people-to-people licenses that allow for educational and religious travel to Cuba. I’m attending a meeting on Monday about this topic. We want to create an open line of communication so that we can be compliant with licensing. We haven’t got the communication from government that we need on this.

Do you see travel opening up to Cuba?
Dale: In the short-term, I’m not too optimistic that travel restrictions to Cuba will be eased, but eventually it will happen. The cultural experiences that people are having in Cuba are tremendous.