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The move was hailed by some as an attempt to control pricing at
a time when deep discounts offered by both online and traditional
agencies are undercutting business.
But the policy has generated controversy, with some saying it
may raise red flags of price manipulation, and others saying that
while it is legal it is likely to impact traditional agencies more
than online giants like Expedia.
Tauck’s policy, which goes into effect Jan. 1, establishes that
no travel agent or agency will be allowed to advertise or promote
Tauck products in print or on the Internet at less than published
Peter Tauck, president of Tauck Holdings, said the policy was
launched because of concern that the increase in advertised
discounts is “eroding the reputation of our business and causing
confusion in the marketplace.”
Agents who violate the policy will no longer be eligible for
overrides, which can range up to 15 percent, said Robin Tauck, the
Phil Crosby, Tauck’s chief financial officer, said, “We’re not
going to tell anybody how much they can or can’t discount.
“We’re just trying to level the playing field,” he said. “It’s
not going after any particular modem of travel agents, it’s all
Some tour operators ask agents to sign an agreement not to
discount if they use the suppliers logo or trademark.
Travel attorney Alexander Anolik said Tauck’s policy “raises red
flags as to price manipulation, but it is not per se.
“If it’s only for the approval of printed media, they can
probably do it,” he added.
But Paul Ruden, general counsel for the American Society of
Travel Agents, said suppliers may control pricing when retailers
are selling a product they don’t own.
For online agencies like Expedia, which may purchase an interest
in tours sold under the merchant model, suppliers would not have a
say in limiting discounts.
“But the problem in saying you may not discount is enforcing
it,” said Ruden. The response among agencies offering discounted
Tauck tours varied.
Charles Oppenheim, owner of H.C. Travel in New York, which
offers Tauck tours at a 10 percent discount, said he does not
believe Tauck’s policy will be legal and said he has no plans to
change his ways. In fact, he said, “We’re going to go deeper.”
But Sue Lobo, director of marketing for Atlas Travel in Florida,
said she supports the plan as long as it only addresses the
advertisement of discounts. Atlas typically offers $50 to $100 off
Tauck tours, which makes it difficult to compete with agencies
offering 10 percent off.
“Some of these discounters have gotten so aggressive, it makes
it difficult for smaller agencies to stay in business,” said