Vacation.com

As I’m sure everyone is aware, United has implemented a new program that goes into effect on July 20 prohibiting certain agencies from having access to its credit card merchant account. This action will require these agents to go directly to United’s supplier site to book travel; to become their own merchant of record; or pay cash through the ARC settlement plan for United tickets. All of these options create an undue hardship for the travel agent and those consumers who chose to use a travel agent to conduct business.  As Chris Russo (Vcom member and ASTA President) stated:

“Even if you did not receive the letter, this move by UA could have serious consequences for your business. UA has stated that the purpose of its move is designed to “reduce distribution costs”. UA’s message makes clear to us that the real game is to undermine the full-content deals made in 2006 by forcing agents to book clients direct and thus outside the GDS. This follows because no reduction in credit card costs eventuates if the client goes around the agent and makes a credit transaction directly with UA. Likewise, no credit card costs are saved if the agent goes directly to United.com for ticketing. The only way UA saves “distribution costs” is by avoiding the GDS.”

The travel agent distribution channel plays a vital role in distributing the majority of the product for the cruise industry, the tour industry, as well as many airlines, and is a purchaser of GDS product and services. Ultimately these actions destabilize the agency channel that others depend  upon and support to distribute their products. Unfortunately, the weakest link in the travel and tourism industry today are the airlines, which continue to undermine other providers who bring valued products and exceptional customer services to the traveling public.

One of the unfortunate consequences of the domestic airline industry moving away from the agency channel is that they have a limited ability to actually ‘sell’ their products. Their major outlet for sales are on-line or via a kiosk… Not a very compelling way to extol the benefits of  ‘buying-up’ to ‘more leg room’; frequent flier benefits; or an upgrade. The cruise lines and tour operators still use the channel as intended…. To ‘sell’ their products and to generate incremental revenue. As the PhoCusWright study stated: “The travel agent channel offers a significantly higher average transaction value than online channels”.

The core belief of our network at Vacation.com is to support those suppliers who support Vcom  and the travel agency distribution channel. It is very important that we continue down this path and continue to work with suppliers who work with us and value the work that the agency  channel provides. When booking air travel, or any other supplier, the agency community needs to continue to support those who support the travel agent and their clients.

Steve Tracas
President & CEO
Vacation.com