The travel agency community is in critical condition, and it took a
federal panel $800,000 of your tax dollars and six months’ time to
render the verdict.
In 1994, there were some 24,000 travel agencies in the United
States. Since then, more than one-third of them have vanished.
“The state of the travel agency industry itself was pretty much
a foregone conclusion,” said Ted Lawson, one of nine commissioners
with the National Commission to Ensure Consumer Information and
Choice in the Airline Industry. Lawson is with National Travel
Service in Charleston, W.V.
What wasn’t a foregone conclusion was how the decimation of
travel agency ranks has affected consumers. Agency advocates have
argued that a healthy agency community is critical to consumer
choice. But the commission determined, “The decline in travel
agents did not have an adverse impact on consumers because the
Internet gives them more access to travel information than ever
before.”
While bemoaning the plight of travel agencies, the commission
recommended neither new legislation nor regulations to reverse the
trend toward industry consolidation.
“Rather than interfere with competition, we chose to allow
market forces to drive the direction of travel distribution and not
recommend measures to artificially protect one interest over
another,” the panel concluded.
And so it is that the status remains virtually quo.
ARTA President John Hawks said he’s disappointed that the
commission didn’t go far enough.
“From our end of the industry, the small retailers, there’s just
not the lobbying effort out there,” Hawks said. “I’m not too
surprised they didn’t come out more strongly [in favor of remedial
regulation].”
Hawks said the commission was particularly soft when it came to
Orbitz.
“It would have been great for them to come out and push the
government to regulate Orbitz the same way CRSs are regulated.”
The commission did recommend, however, that the government
immediately consider whether the Web site owned by five major U.S.
airlines be allowed to maintain contract clauses that allegedly
keep airlines from offering Web fares to other agents. These
so-called “most-favored-nation” and marketing incentive clauses
have been a prime target of agent ire.
Travel agent commissioner Lawson defended the commission’s
position on Orbitz.
“Actually, I think we hit the issue right on the head,” he said.
“Our opinion was that the most-favored-nation clause was
troubling.”
Ann B. Mitchell, NCECIC commissioner and president of CWT/First
College Park in Starkville, Miss, concurred: “To retain
most-favored-nation status for Orbitz goes beyond what was
considered to be a fair use of market power.”
While Mitchell (CTC & PhD) said the report would have been a
bit different had she written it, she’s nonetheless proud of the
commission’s efforts. She noted that commissioners served in a
voluntary capacity, and the commission actually returned to the
government $200,000 of the $1 million originally allocated.
Regarding the product’s substance, she said, “For it to
represent nine people from different areas of the industry, it was
a fair report.”
Overlooked in the criticism that the commission’s efforts
weren’t far-reaching are a couple of seeds that conceivably could
bear fruit. The commission recommended that:
" Agents should be protected from the arbitrary action of
airlines in debit memo disputes. Amending and strengthening the
Travel Agent Arbiter program should take care of this.
" The industry should provide travel agents a special box on
tickets to include service fee charges.
Hawks is hopeful that travel agents and the Airlines Reporting
Corp. can come together to beef up the arbiter program. To this
end, ARTA recently called ARC’s general counsel.
“They just dropped the bomb on us regarding daily reporting,”
Hawks said. “I’m posing it back to them to do something for us. It
would be a huge help.”
In the end, will the NCECIC help beleaguered travel agents?
“What it’s really doing is putting travel agents’ desperation on
the map,” said ASTA President Richard Copland, who’s confident that
the detailed delineation of agents’ plight will do some good but
not immediately. “You can’t expect things to be accomplished
overnight. You have to remember, the government works slowly.”
For Hawks, the commission’s report serves to underscore the
obvious but in a dramatic new way.
“Just seeing in cold, hard writing on federal stationary no less
that one-third of agencies have closed since the mid-’90s,” he
said, “brought home to me the agony of it all.”
