travel distribution revolution, possibly as far-reaching and important as the emergence of the online channel, is occurring. Retailers are recognizing in increasing numbers that being a retailer and a wholesaler -- a wholetailer -- is far better than being one or the other.

And just as importantly, they're seeing that they're in a better position to claim this coveted ground than wholesalers.

To be sure, it's not a completely new phenomenon. The longstanding Liberty/Gogo operation is figuratively and chronologically the granddaddy of all wholetailers, but until recently, others have joined its ranks only in dribs and drabs: The acquisitions of Travel Impressions by American Express, Pleasant Holidays by AAA Southern California and Classic Custom Vacations by Expedia all have occurred within the past six years.

But the pace is picking up. When Virtuoso axed Classic from its preferred-supplier list last month, Classic chairman Ron Letterman chided Virtuoso CEO Matthew Upchurch in a letter, saying, in effect, that there are classier ways Upchurch could have gone about announcing his intention of getting into the wholesale end of the business.

Indeed, Upchurch is intending to get into wholesaling but couldn't resist poking a stick at both his rival distribution channel (online) and a future rival wholesale operation. It was probably of little comfort to Letterman that Leisure Travel Group was upfront about its intention to move to wholetailing as the rationale for cutting Classic from its preferred list.

What's becoming clear is that not only is the speed of wholetailing's evolution quickening, but it's making retail/wholesale relationships increasingly complicated as suppliers become competitors. Channel bias plays into the equation: Classic was an easy target because it's not only a competitor, but it's linked to the online revolution that has so upset traditional agents.

This is bound to change. Consumers are forming into two camps, those who book online and those who book offline. When traditional agency-cum-wholetailers realize they're competing primarily with other traditional agency-cum-wholetailers for offline business, will they still want to offer wholesale products owned by offline retail competitors?

Further easing the transition of retailer to wholetailer is dynamic packaging, which puts wholetailing within the reach of even the smallest retailers. And as this online functionality penetrates the traditional agency community, the lines between offline and online are likely to blur as much as the line between wholesale and retail. And then, perhaps, the revolution will be complete: Just about everyone will be competing with just about everyone else at some level.

The common wisdom of the past was that any movement toward vertical integration would be led by the wholesale side -- the rollups of the '90s assumed that the first step of a successful wholetailing operation required lining up the supply, rather than distribution, side of the equation. But as Wal-Mart and Home Depot have shown, retailers can become much more important than the brands on their shelves. Especially when they happen to own the brands.


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