CCRA Travel Solutions announced last week that it acquired the Outside Sales Support Network (OSSN), a trade association that represents some 8,000 home-based travel agents, along with Travel Retailer Universal Enumeration (TRUE), an agent ID system. Travel Weekly Senior Editor Michelle Baran caught up with CCRA President and CEO Dic Marxen to have him explain how a company that aggregates and sells hotel inventory is going to run a trade group.
Q: First off, what is CCRA?
A: CCRA is sort of an interesting little company that's grown quite a bit in the last few years. The hotels still call us a consortium, but given all of our revenue divisions, we're no longer a consortium. I'm having a hard time giving a single word that can tell you what we are. We have just under 500 corporate travel agencies in the U.S. that use our call center; we have a preferred hotel program, which we now have over 34,000 properties in; [and] we have an online real-time booking engine that's been out for about seven years now.
Q: So why add OSSN to the mix?
A: We started some research about two years ago, and we found that the storefront large corporate travel agency, although the agencies are doing well, there's not that many new agencies that are being started with storefronts. If anything, we're seeing a drop. On the other hand, we've been tracking home-based independent consultants and the leisure agencies and agents, and that market continues to grow significantly every year. So we decided that we wanted to make a concerted effort to have a presence in the work-at-home, leisure-based independent consultant/travel agent community. We also decided that we needed to leverage some of our new products and services that we had coming out. And if there was ever an opportunity to have a distribution channel and own one of the distribution channels to give our products to, then we would do so.
Q: How does the acquisition affect OSSN and TRUE?
A: They become wholly owned subsidiaries of CCRA. They're not going to change. We're not going to roll them in, merge them, dissolve them. They are just going to continue to grow on their own. And we do hope that they will be able to utilize some of our existing products and some new products that we have coming up this year that will really help this home-based market. It's about 8,000 members in the U.S., which means a lot to us. They are a big portal user, yes, and I think that they are going to be a big user of some of our new products for the leisure-based agency that we're announcing this year. It just made sense. It's going to be confusing to people in the industry. I've had many calls. Some of my best customers on the portal are host agencies. Now they think we're going to become a host agency. CCRA is not becoming a host agency.
Q: Will OSSN's members be compromised at all by the fact that OSSN is owned by CCRA? Will you be pushing your products on its members?
A: Well, it's been a little bit of a challenge for Gary and Melody Fee [president and vice president of OSSN, respectively, who owned the company prior to the CCRA acquisition]. The great news is that both of them are staying with OSSN and TRUE and will continue to run the two companies. I am also very cognizant of the fact that we may own this distribution channel, but what do we really own? I mean, you really don't own an agency unless you physically own the agency itself. These are independent businesspeople and for the most part are pretty savvy. So I've got to have good products. I've got to have products that have top-tier commissions that are the best in the industry. And that's my goal. I pass those on to Melody and Gary to promote to their agency membership, which they have done in the past. And now hopefully they will do more aggressively because we are really going to try to be tailor-packaging some of these products and services just for their members. But again, if my products aren't competitive, these independent agents, they might go to another host, they might go to another affiliation. It's a competitive marketplace, and I love it.
Q: Do you plan on creating OSSN-exclusive offers?
A: If Gary, who's still running OSSN, feels like he can bring enough volume from his membership to use our products, of course that's going to give him enough leverage to get a good deal. ... And if he can commit enough of these members volume-wise, then of course that certainly helps in their getting a higher commission rate, too, and commission incentive.
Q: Usually companies are focused either on the distribution side or on the supplier side for a reason. When the lines get blurry, there can be opportunities, but won't there also be challenges?
A: There certainly will be. Some will have to offset the others. We are a marketing and technology company. That's what we really are. We're not a consortium, we're not a host agency. It is a difficult business model to describe. However, when you look at our individual divisions, and how well they are all doing and our financial success, we're pretty bullish on it. And we think that there are so many opportunities out there, but we don't want to be pigeonholed into just one area, where if you're a consortium then you have to be a consortium. It's a unique business model, and I don't have a name for it -- maybe I will in a few years -- but it's working quite well for us in the last few years as far as both our expansion and financial successes that we've had.
Follow Michelle Baran on Twitter @mbtravelweekly.