If you were new to the travel agency business and you were asked to flip through ARC's Agent Reporting Agreement and Industry Agents' Handbook, you would soon be tweeting OMG (and maybe some other capital letters) to your friends and followers.
These are indeed formidable, if not forbidding, documents. As we reported in our news pages a week ago, ARC admits that the complexity of these documents can be a deterrent for prospective ARC agents. It's one of the reasons why they've been rewritten, updated and streamlined, an undertaking for which ARC deserves considerable credit.
We haven't parsed every sentence, but from what we've seen, the new language and organization is clearly an improvement on the old.
In terms of the substance, some changes at first glance appear to benefit the airlines far more than agents, such as the shortening of the remitting cycle. If the changes are adopted, agent accounts will be drafted five days after the close of a reporting period rather than 10 days. That could pinch small agencies that get a lot of personal checks.
But even here, ARC and the airlines can make the case that they're being practical rather than arbitrary and that there is an upside for agents.
The 10-day cycle dates from a time when ARC settlement was based on paper sales reports and paper ticket coupons, and when banks cleared their checks through the mail. Some checks in this digital age clear faster than you can say U.S. Postal Service.
Given that airlines have been pressuring ARC for faster access to their funds from agents' cash sales, or for less risk in the form of higher agency bonds, it appears that the time has come to shorten the venerable 10-day cycle.
The upside is that agents who use ARC's credit card processing service for their client fees will also have faster access to their funds. For some agents, we are told, this could be a net benefit.
There are other advantages for agents. Under the new contract, ARC will not draft agent accounts for anything not "specifically" authorized by the agent or contained in the sales report, except for fees governed by the agreement, such as annual fees or compensatory charges.
ARC even did away with a minor annoyance for agents with small sales volumes: If an agency has a "no sales" week, it will no longer have to file a "no sales" report.
Perhaps most importantly, the revised contract creates a new "associate branch" category for branches that are not wholly owned, opening up new possibilities for agencies to share ownership of branch offices or manage their hosting relationships in new ways.
To be sure, the Agent Reporting Agreement will still have the airlines' best interests at its core, and it will remain a one-size-fits-all contract that makes few concessions to the growing diversity in the size and scope of ARC agencies. But on balance it seems to be an improvement, and not just because it mercifully does away with "Witnesseth" and "Whereas."
The new document is the result of a long dialogue between ARC, ASTA and other agents and agency groups. Some provisions were negotiated line by line, word by word. Concessions were made on both sides.
OMG!
Even for those who have issues with the content, there is good cause to applaud the collaborative process by which these revisions came into being.