During an ASTA webinar Thursday, Paul
Ruden, ASTA's staff senior vice president of legal and industry
affairs, told ASTA members that the Society fears ARC's proposal to
increase fees is only the start of an ARC plan to shift more of its
operating costs to agencies.
About 150 agents
had signed up for the half-hour webinar, which promised to explain
to agents how the ARC proposal "will impact your business and
bottom line."
"The goal of ARC
right now is to move the travel agency share of its operating costs
from 10% to 30% by 2011.
But ... once you start down this road without any justification and
explanation in economic terms, there is no limit to where it could
lead," Ruden said.
If ARC shifts 30%
of its operating costs to agents in the next four years as it has
targeted (although no plan has been put forward beyond 2008), Ruden
said the fees that agents pay to the settlement system would
skyrocket.
According to ASTA's
estimates, by 2011 charges for headquarters locations or
independent agents could rise from $395 in 2008, which itself is a
172% increase over 2007, to $875 in 2011. Transaction fees could
jump from 2 cents to 36 cents.
Ruden warned agents
that ASTA had "little chance" to stop ARC's current plan for 2008
from being implemented on Jan. 1 once it is approved by the ARC
board. ASTA plans a challenge through the independent arbitration
panel, but it cannot happen before the end of the year, he
said.
The panel, created
in a court settlement in 1985, has reviewed just two cases that
ASTA has brought before it challenging ARC policies. In both cases,
the three-person panel favored ARC.
To
contact reporter Laura Del Rosso, send e-mail to [email protected].