e have always embraced the
travel agency community," a spokesman for American Airlines told
TravelWeekly.com late last month. "They remain a very important
channel for selling our product."
This was by way of explanation for why the airline is taking an
interest in being a preferred supplier to Vacation.com and
Travelsavers, consortia representing small and midsize travel
Disingenuous or not -- all right, why fudge: Everyone agrees
it's disingenuous -- the statement speaks to a business reality
that, quite appropriately, has much more to do with money than
It'll be difficult to get the straight story from American about
why it's suddenly dealing with smaller agencies, but we can get
some insight by looking into another company that's very publicly
embracing travel agents -- Sceptre Ireland.
Bert Accomando, Sceptre's owner, recently committed to using the
travel agency channel exclusively for that brand. Accomando has
already left his mark on the way Irish products are sold, forcing
some operators to follow his lead in focusing on volume and yield
rather than yield alone.
He gave a straightforward explanation for why he decided to
pursue agency sales exclusively: "If you looked at it one way, it
appeared as if I were making a 35% gross profit on consumer direct
sales. But figure in advertising and marketing costs, and the
profit becomes a joke. Not only that, but the average sale was 25%
less when booked direct, compared with agency sales. That's huge.
It became a real issue: We realized that, going direct, we were
barely covering our costs."
It should be noted that Sceptre's inventory is obtained from
another Accomando-owned company, which also sells to competitive
brands that market consumer-direct. But Sceptre's shift toward
agents is meaningful -- it represents the biggest piece of its
Oddly, in some respects Accomando's embrace of agents is
reminiscent of the embrace American has just abandoned. Though he
is willing to commit 100% of his marketing dollars to agents, it
won't be through consortia or other groups of agencies. "I'm not
comfortable with the consortium concept," he said. "I think the
person who does the most work should get the reward -- it shouldn't
automatically go to someone just because he belongs to a group. I
want proactive partners."
He envisions that the "Emerald Partners" who will get his
marketing support will be entrepreneurial in approach. "I'm
thinking 1,000 agents selling 100 packages each. That'll work for
American's and Sceptre's recent moves represent giant steps away
from posturing and uncertainty and toward business decisions being
made using traditional considerations. The hype of the virtues of
traditional agencies on one hand and online agencies on the other
is dying down. Channel competition is showing the first real signs
of maturation: Traditional agents and online agents are looking for
the best deals, regardless of past supplier behavior, and suppliers
are looking for the best channel for their product, regardless of
whether the channel is thought of as cutting-edge or
In this new world, it's not travel agents who are suddenly being
embraced -- it's rationality.