Supplier-Direct Competition? Don’t Get Mad, Get Proactive

Editor’s note: News this spring of more vendor-direct initiatives prompted travel agency owner Sandy Anderson to pen the following commentary.

I really am done complaining about vendors marketing direct to travel agency customers. This is nothing new. It just evolves in different ways.

Vendors have competed with travel agents in various ways over the years, including:
•    selling direct to consumers on the Internet
•    promoting future bookings to your clients onsite
•    marketing time-shares to your clients during their vacations
•    recruiting your top sellers to work for them.

Most vendors affirm that the travel agent model is an important form of distribution for them. Some speak of the agency distribution channel as more important than others.

I believe that tour operators and cruise lines are doing exactly what I do daily – looking for new opportunities to grow their business and profitability.

It is so easy to waste energy getting caught up in these issues. What works for my agency is to look at my vendor relationships with an eye to finding opportunities for my business.

I have dealt with vendor-direct competition in the following ways:

Internet bookings. We embraced the Internet years ago and actually recommend to our clients that they look at online offers. Since we know that price drives these bookings, we work with our vendors to establish standard procedures for resolving differences in the offers.

We also focus on cultivating the client relationship by serving as their personal advocate. Our agents are generally able to move customers who find better offers online to a package that fits their wants and needs.

Future-booking programs. When our agents book a supplier whose on-property or shipboard future booking programs do not respect the agent-client relationship, we encourage them to communicate to clients their options for repeat bookings before they travel.
 
Recruiting top-selling agents. As the travel agency business model has evolved to include more independent contractors, I have known some ICs to book their business directly with tour operators, as a way to bypass their host agency and avoid the commission split.

When this issue came up in my business, we resolved it real fast by talking through the value and terms of the agency-IC relationship. If your agency wants to develop relationships with ICs, you must have open communications and negotiate your value with your independents. When you do, they become very loyal.

Fractional ownership sales. Some great resorts promote their fractional ownership programs really forcefully to guests. My concern is how the resorts handle this with our clients. So when we book a customer into a resort chain that is pushy about fractional ownership sales, we communicate this to the customer before they travel. Fractional ownerships may be a good fit for some, but we don’t want our clients caught off-guard by a sales pitch they’re not expecting.

Under my control
Who owns the customer? How can you guarantee IC loyalty? These are real questions. One thing I do know – I own my business. This is the part of the equation I can control.

One of the best ways to control my business results is by cultivating strong relationships with our customers and with our independent contractors.

Again, I am done complaining. I am just looking for opportunities to grow my business with my partners!

Sandy Anderson owns Riverdale Travel Leaders in suburban Minneapolis. She serves on Travel Market Report’s Editorial Advisory Board.