|Bruce Bishins, managing director of ARTA|
Travel agents will be challenged in the year ahead by a host of complex, contentious issues that will shape the future direction of travel distribution, Bruce Bishins, managing director of the Association of Retail Travel Agents (ARTA) said in an interview with Travel Agent.
“The challenges will be many: regulatory in the form of Department of Transportation policies, competitive in the shape of new sources of online competition, and technological in terms of Direct Connect and the future of GDS,” Bishins said.
The challenges cited by Bishins also underscore a new, aggressive posture for ARTA as a champion of professional agents. Bishins, a 35-year industry veteran who joined ARTA as its managing director this year, notes that ARTA allows only retail agent members and offers his top ten list of challenges that ARTA and the industry will face.
“Agents can choose which issue they believe to be the most important to them and their operations and add at will. We welcome the input and solutions. Whatever priority the issues are given they all will impact our future," Bishins said, noting sharp differences of opinion on many issues.
DOT- ARTA has proven highly critical of the Department of Transportation’s (DOT) policies that ARTA feels does not believe reflect the best interests of the industry or the traveling public. The DOT’s Notice of Proposed Rulemaking – expected early in 2012 - that seeks expanded DOT influence and control of travel distribution and agents ARTA believes is wrong.
"The DOT is proposing more regulation and controls, including reporting requirements such as incentive payment of agents, that we question. ARTA also questions the need for all the reporting requirements of ancillary services which could well be a prelude to increased taxes,” Bishins said.
“What other industry is required to share internal, proprietary pricing, incentives, and inventory with the end consumer? The DOT's plan is overkill, excessive, and without the slightest justification," Bishins argues.
ARC- Bishins, who has been an ARTA board member since 2006 and is president of ARTA Canada is also concerned with the so-called “modernization” of ARC (formerly the Airline Reporting Corporation) and its impact on travel agents. He is critical of ARC’s Helix program, for example.
Bishins cautions agents to be wary of ARC’s future direction and notes that ARC remains airline-owned. “How far should ARC be allowed to go beyond its basic accreditation and settlement functions?” Bishins' views are given extra weight as he served ARC's predecessor organization, the Air Traffic Conference or ATC.
Employment- Bishins places attracting new talent to the travel industry as a top issue of concern to everyone – suppliers included. “We have to do more to make entering the travel industry more attractive. This includes attracting a new breed of owners and managers who see the potential and real attractions of being agents. The graying of the industry is a challenge.“
Social Networks- A new issue of concern is major online discounters such as Groupon and Living Social. “ARTA is concerned that if they move into travel sales – especially group sales –that they gain access to a price conscious mass market and could move a high volume of traffic. If they enter the travel business in force agents and suppliers will have to be alert to the competition. Another view is the personalization represented by the agent and communization by online travel sellers may deepen rather than converge.”
Search Engines- Another online challenge is Google’s acquision of ITA that Bishins believes bears watching. “Travel agents may have to end up dealing with Google as the dominant search engine with virtual monopoly power. This can impact agents' ability to compete with online agents.”
Direct Connect- Surprisingly to many, ARTA has taken a position in favor of expanding direct connect technology. “Agents should approach this issue with a fresh perspective. ARTA understands the retailers concerns, but we sense that changes are underway.”
“Suppliers clearly want to increase their control over distribution and contain legacy GDS costs. Travel distribution costs will be a real challenge. GDS’s are really supportive of travel agents but there has been a slow decline in agency use of GDS. There are also questions about the GDS’s pace of innovation.”
Credit Card Fee Issues- Agents will have to address the issue as credit card fees as costs mount. "Factoring in the transaction costs will challenge many agents and their technologies. Merchant fees are another concern. The best managed travel continues to work on thin margins.”
The Economy- The top issues for virtually every segment of the travel industry is the U.S. and world economy. "The state of the U.S. and global economies will be a major concern, as will government policies, including tax policies which will impact consumer demand and agency profitability,” Bishins warns. Punitive taxation – local, state or federal –will have to be monitored.
Pricing- There are real challenges in pricing volatility and with the commission ability of services. Bishins sees this as an ongoing battle that agents must face, as must suppliers such as cruise lines who want agents sales support.
Consumers- A tough challenge that agents will be affected by – and can play a key role in shaping – is consumer satisfaction with the travel experience. “Consumer demand and satisfaction is critical. Can we minimize hassles at airports without loss of security, for example? Agents and suppliers must deliver genuine value.”
Bishins began his career as a flight attendant for Pan Am and has held positions at Air Canada, Swissair, Air France, and Austrian Airlines. He was manager-travel industry training at Trans World Airlines for nearly eight years. He developed and implemented the travel agency training program for the PARS GDS.
“Professional travel agents have been both challenged by and empowered by the rapid changes in technology. This will continue as the online travel market expands and as suppliers – including the airlines – continue to innovate. Agents can expect changes – including the relationship between airlines and GDS.”
ARTA itself will remain an active, responsible voice in the industry, Bishins says, noting the ground-up participation of ARTA members and the involvement of a professional Board of Directors. He also notes that ARTA’s aggressive stance on key issues has delivered a “marked increase in membership.” (ARTA does not release its membership figures.)
A virtual certainty is that travel agents and their associations, as well as the agency consortia, will have their work cut out for them in 2012, especially in view of the U.S. elections. “It’s never been enough to be an order taker. Professional agents have to be proactive with the industry and issues that impact it. They will need ARTA and its input.”