Agents Face Tough Economic, Legislative Challenges

Despite an unstable and perilous marketplace, travel agents must reach out to their markets, invest in their future and aggressively promote their services, Paul Ruden, ASTA’s senior vice president of legal and industry affairs said during a webinar on issues impacting agents. Ruden said ASTA is closely monitoring the current economic crisis and its impact on agents and the travel industry. He said that the impacts of the crisis are variable by region and predicted that agents will continue to feel the effects on their business.

The positive news, Ruden said, is that all recessions end and that ASTA’s analysis of past downturns suggests that companies that chose to compete rather than withdraw from the market will be best positioned to recover. He also urged agents to review ASTA’s recently released advisory on investing during a recession.

Ruden’s webinar presentation also examined ASTA’s legislative and industry relations programs and the prospects for 2009. One forecast— regardless of the winner in the presidential race now underway— is new taxes and attempts to regulate small businesses, including travel agents.

Travel agents can expect new federal standards to be explored by the IRS to define if a worker is an employee or an independent contractor, Ruden said. Given the growth in use of independent contractors by the industry, this will be a major challenge.

Agents must also be aware of new ways that federal and state governments will propose to shore up their revenues. Combating new, punitive taxes on agents will be a major priority for ASTA, Ruden said. He noted ASTA’s recent successes in Michigan, Massachusetts, Louisiana, Illinois, New York, Texas, Oregon and Montana. ”We will see more tax proposals.”

Ruden urged travel agents to get involved in ASTA’s legislative relations program and stressed the importance of grassroots agency participation if the industry is to have an impact on legislators. More than 1,000 agents responded to a Michigan tax proposal that was defeated. Support of ASTA’s non-partisan Political Action Committee or ASTAPAC is also essential to gain access to lawmakers. Agents can expect more calls for action from ASTA in the year ahead.

On the federal level, Ruden noted the increased number of government agencies ASTA must deal with and the number of complex issues that impact agents. He credits ASTA with effective representation of agent’s interests in Congress and among federal agencies. This ranges from the Department of Justice (airline antitrust issues) to Homeland Security (Secure Flight issues). A new area of concern is energy policy, with ASTA joining a coalition concerned with the impact of oil prices.

Other issues involve unfair competition and state versus federal power to regulate travel. Ruden warned of the effects of airline consolidation and alliances. “Airlines with antitrust immunity are dividing up the world,” he said, citing the impact of airline alliances on agents and passengers. Not least in importance, Ruden cited ASTA’s successful defense of agent’s interest with the Airlines Reporting Corporation (ARC) and ASTA’s involvement with bread and butter industry issues.

“ASTA can’t do the job alone,” Ruden said, urging travel agents to get involved and participate letting their voices be heard in Washington, D.C. and state capitals. ASTA will remain vigilant in its defense of the industry, he said, and welcomes agent’s support and input.


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