Opinion: Agency Groups Remain Sources of Innovation

As 2012 begins its useful to remind ourselves of how important agency groups of all kinds – consortia, franchisers, agent owned co-ops and for want of a better label host agencies - have become to travel distribution and how much they have empowered agents and agencies.

The past year has shown that innovation has become a hallmark of the agency groups. They offer lots of new tools and programs that are building sales and profitability. Critically, they enhance the value of professional agents to leisure and business clients. This will surely continue in 2012.

In recent months major groups- including American Express, Virtuoso, Ensemble and the many units of the Travel Leaders Group- estimated with $16 billion in sales and representing one third of agencies - have reported new initiatives that strengthen professional agents.

This includes expanding air, cruise and hotel sales opportunities and helping combat competitive online sales. From travel insurance to luxury travel, groups and new destinations professional agents are better equipped to compete armed with award-winning marketing and technology innovations.

So too are agencies that host large numbers of independent agents. Witness the initiatives of Avoya Travel on lead generation and fast commission payments or Nexion’s new air commission program. CruiseOne and its sister company Cruises Inc. constantly announce new initiatives as does CruiseShipCenters – an Expedia company.

A sampling of the recent initiatives includes new technologies, new marketing programs, education, training and management support. While member needs obviously differ from group to group, market-by-market, serious investments are being made and presumably paying off – both for the member agents and the groups.

Improved technologies are important and rank high among the innovations. An example is Ensemble Travel’s launch of a new cruise booking engine designed to provide agents with one-stop shopping and booking of Ensemble's 1,500 cruise departures and amenities.

The engine will be available to U.S. and to Canadian members this year and be powered by technology partner Passport Online – a company that itself is a source of innovation. The new tool will be free to all Ensemble agencies.

In June Ensemble also announced a new air-booking engine that will help Ensemble’s 850 members to shop, book, and earn on 70 international and U.S.-flag carriers. The technology is free to all member agencies.

Opening new marketing opportunities is also an important innovation for group members. The powerhouse Travel Leaders Franchise Group, for example, created its Luxury Center of Excellence. This seeks to help members serve the growing luxury travel market. The move follows the earlier launch of its Travel Leaders Business Center of Excellence, Envision and Envision Plus.

Expanding hotel sales is another perceived area for critical innovation. Travel Leaders Group, for example, is offering its members a guaranteed 12 percent commissions on every gross booking (before taxes) with its new Stream prepaid hotel program.

Stream allows Travel Leaders Group members to offer competitively priced prepaid hotel rooms for over 70,000 hotels and resorts worldwide to their clients while earning commissions.

Stream will be available to the group’s wholly-owned, franchised and affiliated travel agencies and agents, including Travel Leaders, Results! Travel, Cruise Holidays, Vacation.com and Nexion.

Education and training initiatives are critical parts of many group programs. Signature, for example, will launch a new series of “Bootcamp” regional trainings in ten cities coast to coast during May and June 2012. These sessions will include interactive workshops focused on Signature’s technology tools including “Pocket Travel Consultant”, “myTravelSite” and other one-to-one client communication tools.

In 2012, Signature said it is expanding Signature University, its online training tool offering on-demand, self-paced courses available 24/7, for travel consultants. Logically, the weekly webinars will focus on effective usage of Signature’s technology.

As with other groups the goals include leveraging the groups value added products to close more sales and how to better use supplier resources. Signature also wants to encourage members to sell groups – including the family, honeymoon and the luxury markets.

Noteworthy too is Signature’s urging members to participate in a centralized recruitment and matching program for independent contractors.

Innovation often includes close cooperation and collaboration with preferred suppliers. One example from the powerhouse American Express U.S. Retail Travel Network is a partnership with Orbitz to power the American Express Travel online webs.

With this new collaboration, Orbitz's extensive hotel program, which represents 85,000 hotel properties, will be available to the network. Included are price-match guarantees as well as access to low rates and guarantees of a 12-percent commission.

Another welcomed trend is helping agents recruit new members. This year, Virtuoso says it has placed 260 travel advisors into its network, and is on track to place a total of 350. With each boasting a conservative estimate of $200,000 in annual sales, that equates to more than $70 million in increased production, Virtuoso says.

In total, the Virtuoso network reports 7,218 frontline travel advisors – up from 6,000 – and accounts for $9.6 billion in annual travel sales, or roughly 10 per cent of total travel agency production.

Many groups including Vacation.com are building on a solid basis of achievement such as the time proven AgentNet desktop technology and Engagement marketing programs that provides a basis for more innovations and initiatives.

Who benefits from innovation? Certainly the preferred suppliers who in some cases underwrite program initiatives gain from more productive agents. So too do the groups themselves benefit from increased revenues to expand programs. The agents and agencies also win from enhanced productivity and profitably. Not least in importance the clients – business or leisure - benefit with improved services and options.

In 2012 agency groups will continue to compete for quality, productive agents and agencies and discovering keys to building consumer demand. They will continue to listen and respond to member needs. Agents and agency members will continue to benefit from solid leadership and highly competent veteran mangers in the groups themselves.

It will be interesting to see what new innovations 2012 brings. A virtual certainty is that the agency groups -in all their diversity- will continue to be on the cutting edge of innovation in travel distribution.