Travel has two sides to the same coin; distributors and end providers (this could be anything from hotels, to package tour operators, to kayak excursion group leaders), but still, we just can’t seem to be in this together.
If I had a nickel for every time I heard “please tell us how we can do more business together” spoken by an end provider, I’d have a lot of nickels. The issue is that these nickels come at a cost: ever-declining margins for the work that distributors do. Professional meeting planners are still reeling from the impact of a 30 per cent reduction in incentive payments by some of the biggest hoteliers in the world. But the hoteliers (and other partners as well – let’s not just call out one part of the industry) continue to seek out ways we can “do more business together.” I have a suggestion: perhaps start to do more than just pay lip service to the value you see in professional distribution and consulting. Don’t cut commissions in the name of rising costs. I can tell you that I have not experienced a meaningful increase in commission payments in my career; if costs are rising, agencies are not part of the problem.
Agencies need to be vocal about this. We need to speak the truth to our partners. We need to know our value.
We can change our fee policies for clients, modify the way we contract to try to bring us back to even but in the end, we must understand that the challenges aren’t going away.
Organizations like ACTA and ASTA have a role to play by being more vocal when unfriendly policies are announced. Agency owners have a role to play by actually changing strategies when commissions are reduced instead of just accepting it as a done deal. Investors have a role to play where they can acknowledge the difference in the value of guests brought by consultants and insist on more fair practices. Finally, advisors have a role to play by shifting market share where we can. We all have a role to play.
Most of all, we must stop thinking about the past. We should ban conversation about “when commission caps came” or “before the overrides dried up.” Margins are struggling in all businesses, not just travel. We aren’t part of the persecuted minority; all businesses have these pressures. We can be better than that though; we can move forward like our industry always does, and we can do it with professionalism and class…instead of moaning and groaning.
Jason Merrithew will be contributing regular columns to CanadianTraveller.net. We thank him for sharing his thoughts, and invite others to do the same!