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.”
