The effort by American
Express to charge travel agents to serve Platinum and Centurion
card members for their card-related travel programs struck an
emotional chord with agents not heard since airlines announced the
first commission caps.
Now, as then,
agents feel that entities achieving success on their backs decided
that, to get to the next level, it was necessary for a knife to be
inserted into those same backs.
Though the flap
seems to be nearing a resolution, one has to ask: Should agents
have been surprised when Amexs card and consumer travel divisions
started working in concert?
The answer is yes.
Agents had a right to feel betrayed. There had been, until the fee
announcement was made, a perception in the agency community that
there was a wall between the card and travel divisions -- a
separation of church and state, so to speak.
separation enabled agents to work in good faith with the card side
while competing with the consumer travel network.
The system seemed
to benefit both sides -- agents supported the card organization,
keeping application forms on their desks and selling the benefits
of the Platinum and Centurion programs. Agents didnt worry much
that the Amex card folks would tilt the playing field toward
And so, perhaps the
most profound implication of recent events is not the single action
that Amex had proposed, but what appears to be a larger strategic
decision to break down the wall of separation between the card and
If this is the
case, Amex has picked the right new person to lead the travel side
-- Lynne Biggar comes to the travel network after 12 years with the
consumer card division.
But it remains a
bit bewildering that Amex took the risk of its original
take-it-or-leave-it proposal. The potential upside didnt seem worth
the potential downside -- a view confirmed by the companys
acceptance of the need for some changes.
organization Virtuoso advised its members not to sign up for the
American Express programs early-bird date of Dec. 31 (agencies
signing up by then would qualify for discounted rates) pending
Virtuoso had shown
it has a taste for conflict with large companies. And Virtuosos
feud with IAC/InterActiveCorp last year showed that it wont
hesitate to bring a feud into the public arena.
If agents as a
whole were to say no to the fees, not only would Amex lose its
projected fee income, but volume would have gone down, meaning
fewer card fees from merchants.
Amex may have
initially calculated that there is little or no risk, that if
non-Amex agencies wont service Platinum and Centurion clients, Amex
branded agencies will pick up the business.
It may have
believed that the combination of church and state was a winning
Its my observation,
however, that theocracies tend to move toward arrogance and
isolation, and that citizens (or members?) tend not to benefit when
they lose freedom of choice.