Consortia landscape gets a shake-up as advisors realign their allegiances

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Agencies are striking new deals with consortia as the pandemic continues.
Agencies are striking new deals with consortia as the pandemic continues. Photo Credit: AJP/Shutterstock.com

When the pandemic began, Signature Travel Network CEO Alex Sharpe wanted the member-owned agency cooperative's sole focus to be on supporting its existing owners. He instructed his team to put a notice on Signature's website to that effect, informing prospects the co-op would not accept new applications for 90 days.

But before the notice could even be posted, current members and suppliers started calling, encouraging Signature to talk to other agencies about joining. And join they did. So far this year, Signature has added 16 member agencies, with several more in the pipeline. It's an appreciable bump over the 10 to 12 agencies Signature typically signs in a year, and Sharpe hopes to add more and further increase the group's preferred supplier sales.

Signature's new agencies are not the only ones making moves during the pandemic. Many of the major agency consortia reported at least some churn, coming at a time when most agency owners are evaluating every aspect of their businesses, including fee structures, compensation and affiliation.

"A lot of agencies, yes, they were very, very busy doing rebookings, cancellations and all of that," said Roger Block, presidentof Travel Leaders Network (TLN). "But I think they also are having more time to look at all of their options [regarding] what will fit best for them. It could be their business model has changed over the years, it could be they're thinking about changing in the future. It could be, 'let's just see what's out there for our particular business that would help us the most.'"

This year, TLN has added 152 members in the U.S. and 17 in Canada. That is down about 25% from 2019, Block said, which he attributed at least in part to furloughs for his in-house member recruitment staff. The majority of TLN's newbies came from competing organizations. Others were home-based hosted agents who wanted to affiliate directly with a consortia.

Block said the network has lost "very few" agencies, "many fewer than we anticipated." Most, he said, were due to retirements. A few others had sold their agencies, and some had shut down their brick-and-mortar locations, became home-based and opted to affiliate with a host agency.

American Marketing Group has seen around 35 brick-and-mortar agencies sign up with one of its companies, the marketing organization Network of Entrepreneurs Selling Travel (NEST). Its brick-and-mortar consortium, Travelsavers, is also seeing an uptick in members, albeit a smaller one, Travelsavers chief sales officer Kathryn Mazza-Burney said.

Some Travelsavers members have moved to NEST temporarily and plan to reopen a brick-and-mortar agency, she said. There have been a few outright Travelsavers closures, according to Mazza-Burney, and "a few" Travelsavers agencies have left the organization but stayed in business.

"There are a lot of agencies out there, and I think they will continue to reevaluate their business," she said. "I think you'll see more moving into the home-based segment."

Signature emphasizes bringing on agencies that are the right fit for the organization. That means they need to be a good cultural fit as well as being poised for growth, Sharpe said. So far, its new members have added $146 million in preferred-supplier volume, based on previous years' production. Sharpe hopes to increase that number to $500 million.

"I feel good about the progress we've made and what's in the pipeline in terms of potential," he said.

Signature has not been immune to membership losses. It felt it most keenly with the departure of Tzell Travel Group, which is owned by Internova Travel Group, parent company of TLN. Internova rolled up its luxury agencies, including Tzell and Protravel International, into one organization, Global Travel Collection. That organization consolidated under Protravel's long-standing affiliation with Virtuoso.

Tzell thus became one of eight retailers that were added to Virtuoso's U.S. agency roster in 2020. (Virtuoso has added more than 30 members globally.) Cheryl Bunker, Virtuoso's vice president of global member partnerships, said that membership growth in 2020 has outpaced 2019. Some new members have joined from other agency groups, some were previously hosted agents and some were unaffiliated.

Virtuoso also lost 15 agency locations. Bunker said most merged with other Virtuoso members, a few closed because the agencies switched to a home-based, hosted model and one dropped its affiliation. The attrition was on par with previous years, according to Bunker.

She added that the fourth quarter is usually the busiest time for affiliation switches, and 2020 is on track to follow that trend.

"I think it's smart for every agency to look at their consortia affiliation on an ongoing basis," Bunker said. "Making sure that you have the right partners across the board is something people should look at [periodically]."
Like Virtuoso, MAST Travel Network has seen several new members that were previously unaffiliated, president and COO John Werner said. MAST has added seven agencies since June; three came from other consortia, while four were unaffiliated.

Affiliation has been a growing trend in the industry for some time, and it appears that the pandemic may have accelerated that trend for some. A 2018 Phocuswright study found that 67% of agencies were affiliated with a consortium in 2007. That increased to 82% in 2018.

But not every consortia is seeing fluctuations in membership. Bobby Godwin, vice president of the Leisure Travel Alliance, said it hasn't seen any changes. Most agencies, he said, "are hunkering down just focusing on getting through the current situation."

Western Association of Travel Agencies COO Mike Estill said that there have been no organizational switches to or from the consortium but that three members have merged into existing agencies and one has closed.

Ensemble Travel Group declined to comment for this report.

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