AustinCoast Dons New Hat

Consortium now wants to be called a Travel Preferred Provider Organization

By: Robert Carlsen

The AustinCoast consortium has decided it is not going to be a consortium anymore.

The group of more than 700 independent agencies has begun calling itself a Travel PPO, or Travel Preferred Provider Organization, a “new category of travel organization,” according to spokesman Rich Abrahams.

He said the new designation is based on a business model that “recognizes the independence of small-business owners.”

What all that means, according to Mike Caplin, director of Napa, Calif.-based Coast Travel Group, is that AustinCoast is being managed in a way that gives its members lots of flexibility about which suppliers they sell.

Abrahams said consortiums traditionally have been commission clubs, developing preferred relationships with vendors and hoping that member agencies supported those vendors.

Through the years, he said, some consortiums have changed that model by pressuring members to do business in a certain way.

“For example, some consortiums insist that agencies meet specific production goals,” Abrahams said. “Others do not allow members to join other consortiums. And still others limit the number of supplier opportunities.”

Caplin said AustinCoast still secures contracts with suppliers, but it doesn’t pressure members to sell those suppliers if they don’t complement the members’ business focuses.

If that flexibility means the group doesn’t meet certain sales goals, AustinCoast members won’t receive the increased commissions, incentives and other benefits. “But we haven’t had that situation,” Caplin said.

As for the benefits of selling the group’s preferred vendors: “Bottom line, it’s the difference between 10 percent and 15 percent,” he said.

Caplin said AustinCoast has 100 preferred suppliers, 60 percent of which are large, national companies.

On the second tier are regional companies that are smaller, but with a loyal following of both agents and consumers, he said.

On the subject of dual affiliation, Caplin said AustinCoast agencies are free to join other groups, “though we certainly don’t encourage them to do so. But, it’s their decision.”