Suppliers To Travel Agents: ‘We Love the IC Model’

Attendees at ASTA’s Global Convention.

The rapid growth of the independent contractor (IC) model has brought new life to the travel industry and helped it get closer to customers in remote areas across America, said a panel of suppliers at the ASTA Global Convention’s general session yesterday in Reno.

During a View from the Top panel moderated by TMR’s Doug Gollan, Travel Bound president James Phillips started the love fest for the independent agent segment, noting that while “it creates complexity from a sales perspective, we love the IC model. We embrace it.”

“It’s almost like the Marriott model, where the core entity provides the structure, and it allows agencies to scale in a very easy way. It brings an amazing amount of new talent into the industry—and we need that fresh talent,” Phillips said.

“I totally agree,” said Norwegian Cruise Line president Andy Stuart. “I think we were slow to build a support structure to support the IC segment—but we realize now that it has unbelievable reach to customers we would never be able to reach without you.”

The self-employed home-based agent is “a great business model that lets the travel industry scale on a low-risk basis and puts travel agents into communities all over the nation, agents who know the local customer better than anyone—and we embrace it,” Stuart said.

ICs, many of whom are young and thinking up new ways to grow and market their businesses,  also are a great conduit to the much-sought-after Millennial market, soon to be the largest buying power in the nation. Millennials are teaching “every generation how to shop, how to research, how to be,” Stuart said. “If you can figure out how to market to the Millennials, you get all the generations along with them.” 

Do not be deterred from reaching out to younger buyers by the belief that they are tech-savvy and more likely to buy online than from a human travel professional, he said, quoting Millennial expert Jason Dorsey. “Millennials are tech-dependent, not tech-savvy.” 

United Talks Ancillary Fees
Next up on the stage, United Airlines SVP of worldwide sales Dave Hilfman professed his own support of the travel-agency channel. 

“The majority of our revenues are represented by travel agents and we’ve been working  diligently to make it easier for you to do business with us,” with better incentive programs and a new portal coming out, and by making its Economy Plus product available through the GDSs, he said. 

Still, when it comes to going direct to customers or following the Lufthansa model of cutting commissions, “we are always assessing the opportunity to generate more revenue, like everybody here. You have to make your own business decisions. So we do sell on United.com, we have to be where the customers are. But we realize people value their interactions with agencies and we are trying to nurture that.”

When asked directly about ancillary sales, Hilfman said he “thinks there are more coming, whether you’re able to charge for wifi or pre-sell a number of things, and of course people want to know if they are going to end up getting compensated for them. That’s a fair discussion.” 

Obviously ASTA agrees that United is a good partner for travel agents. It named the company Airline Partner of the Year.