Despite endless predictions of the demise of travel agents, the recent acquisition of Vacation.com by Travel Leaders underscores the enduring value of professional agents and the contributions of agency consortia, franchisors and networks to the agency community, Jack Mannix, founder of Jack E. Mannix & Associates, said in an interview with Travel Agent.
"There are many models for agency groups – consortia, franchise, agency owned cooperatives – but a common feature is their ability to serve their professional agency members and to strengthen them with competitive tools," Mannix said. "Today’s professional agent is more profitable and productive due to their affiliations."
A veteran consortia manager, Mannix served for more than eight years as president and CEO of Ensemble Travel Group and now manages a growing consultancy. Mannix believes that in consortia, franchises, co-ops or agency marketing groups, travel agents have found robust tools to build agency profitability and productivity while delivering value to their client bases and suppliers.
"The agency groups are diverse – ranging from American Express’ Representative Network, to AAA, and to international networks such as Virtuoso, Travelsavers or Uniglobe," Mannix said. "The common denominator is agency owners and managers recognizing the value proposition of their groups and a meaningful ROI."
This is true, Mannix said, not just for agency owned cooperatives such as Ensemble, Signature or MAST, but for franchises that include some Travel Leaders groups such as Cruise Holidays and the former Carlson agencies that are now part of Travel Leaders.
"To an outsider it is confusing, but the reality is that professional agencies have a lot of choices with whom they can affiliate, including strong regional networks such as MAST and WESTA," Mannix said. "The franchise options are numerous – from Cruise One and Expedia Cruise Ship Centers and multiple Travel Leaders options – and has clearly shown its strength as a business model."
Agency groups also are impacting the so-called "host agencies" who aggregate independent home based agents with a host who is a consortia or network member. Groups such as Avoya/America’s Vacation Center, for example, is at once a host agency, a growing cruise and tour seller and a member of the AMEX Representative Network as is Cruise Planners.
The value proposition for agency members of consortia has evolved beyond the traditional preferred supplier relationship, according to Mannix. While negotiating supplier deals is a basic component of most programs, today’s agenda includes education and training, management guidance, booking technologies and a range of online and offline marketing programs. Even large national groups have also found a needed balance between localized and regional needs of agent members.
Mannix, a CTC and former head of the Travel Institute, offered a unique perspective. In addition to his time with Ensemble, he served six years as managing director of Travel Related Services, worked in marketing and industry relations at AAA’s national headquarters and built a 16-year career with American Express, for nearly four years of which he served as vice president, of the company's representative network responsible for approximately 400 travel agency franchisees in the US.
"In the future, preferred supplier relations will remain at the heart of the relationship. Agency member’s ability to direct sales to preferreds will be an imperative and — when successful — the source of higher commission revenue and incentives," Mannix said. "To benefit, however, agency members will have to meet ever-increasing performance and productivity standards and levels of 'engagement.'
"The consortia groups themselves will be challanged to deliver value to the agency members in a changing, competitive business. For the relationships to succeed both member agencies and their affiliate groups will have to have a strong return on investment. Both will also have to demonstrate their value to preferred suppliers."
If there is a shortfall in the relationship between agencies and affiliated groups it is that very few have the resources to be a strong consumer brand, Mannix said. The exceptions are American Express and AAA, both of whom enjoy extraordinary brand recognition, particularly in the U.S.
"This doesn’t mean that agencies don’t benefit from their affiliation or that clients don’t benefit – but they are not household names and that isn’t essential for them to succeed."
Industry suppliers continue to benefit from agency networks and Mannix sees a continually evolving relationship between suppliers, productive agencies and their groups: "The ability to aggregate demand has helped suppliers move product and the consortia have proven their value. But performance standards for member agents are being enforced and agencies that don’t meet them are dropped from the rolls. Suppiers, consortia and agencies are constantly evaluating ROI’s from their agreements."
Other trends seen by Mannix include the push toward upscale luxury travel products that appear to have made a more rapid recovery. There is also a continued division between corporate business travel and leisure travel sales.
"Agencies have and are successfully developing niches and core competencies to succeed in highly competitive markets. Many agents and groups have moved to concentrate on lucrative but service intensive leisure products. Suppliers, agents and consortia often cooperate on developing marketable programs with consumer appeal," he said.
While some agents succeed at combining corporate/business and leisure sales, the large corporate agencies or travel management firms (TMC’s) have specialized and prospered, he notes. Travel Leaders, for example, has succeeded in expanding its business and leisure travel units as well as both franchise and affiliated locations.
Another emerging trend is globalization. Many U.S. groups have expanded into Canada while several including Travelsavers and Uniglobe have extensive international links and affiliates. Vacation.com also has strong Canadian membership base, as does Ensemble. Mannix described the Canadian market as vitally important to U.S. agents.
The recession has also impacted agency groups as it has agencies: "The downturn has accelerated the shift from full service storefront locations to independent home based locations. Service fees and niche specializations are commonplace," Mannix said. "The growth in independent agents has fostered a strong host agency movement. It has also helped professional agents stay in the business while reducing overhead costs and allowing them to concentrate on selling travel rather than having to focus on many management issues and expenses."
Mannix, who holds BA and MBA degrees and is a fully rated commercial pilot with multi-engine and instrument ratings, sees the travel agency distribution sector – a $110 billion segment of the travel industry --as constantly evolving.
"The recession and the longer term impact of growing online sales and competition are major factors in shaping the future. My expectation is that agency owners and managers – including a new breed of very competent managers -expect constant change in marketing and technology. The economics of the industry have changed," Mannix said. "Every agent and agency will have to demonstrate their value to their suppliers and clients. But the consolidation of agency groups over the past decade still leaves agencies with solid options for affiliations. The key – at least for those who have made the transition from selling a commodity to a personalized service business – is to be a hero to your group, your suppliers and clients."
Mannix began his career as a travel agent and has served as a member of ASTA's Corporate Advisory Council (CAC), the Starwood Hotels and Resorts Leisure Travel Advisory Board, the ARC’s Joint Advisory Board and the Board of IATAN. He is presently Chairman of the Board of Trustees of the Travel Institute.