ACTA Priority #1: Defending Agency Profitability
Jacqueline Jamieson

This is the View from the Chair printed in ACTA’s Annual Report, by ACTA’s Chair, Jacqueline Jamieson.

This Annual Report reviews many of the things we did in 2009 on behalf of our members. But it can’t detail all the hours and days and weeks spent by our staff and members of our board in thinking, planning for and even worrying about the needs of our members. It can’t describe adequately the elation we have felt when our work paid off by influencing government or industry decisions in ways that will benefit our members. It can’t describe the disappointment we have felt when onerous decisions were made or when our industry was overlooked by decision-makers. Behind this Annual Report is a tremendous amount of hard work and human emotion that we trust have advanced and protected the interests of our thousands of members over the past year.

One of ACTA’s mandates is to do as much as we can to ensure our member agencies are profitable and are not harmed by events or decisions that will affect their bottom lines. One would think it would be relatively easy to protect the solvency of a segment of the travel industry that generates so much business for our country and that provides so much service to leisure and corporate travellers. Unfortunately, it is not easy at all to defend the profitability of travel agencies against threats.

Throughout 2009 and, I have no doubt, long into the future, ACTA has had to fight against the trend by suppliers of products to maintain or to grow their profits at our expense. It is hard to believe the short-sightedness of those in our industry who would use the worst of creative accounting to mislead the consumer and to deprive travel agencies of the rewards of their hard work.

The moving of more and more revenues and costs of doing business from the base fare column to the taxes column of the ledger and of the GDS is a practice that ACTA cannot allow to continue without figuratively raising the roof against it. Fair competition is acceptable in the market but this practice creates the least fair playing field. This kind of manipulation presents the consumer with an artificially low base price in an attempt by a supplier to beat the competition, but adds on a large total in taxes, charges, surcharges and fees as after-the-fact costs. Not only is this practice bound to kill business as consumers realize they are being duped, it is compounded by suppliers then refusing to pay commissions to agencies on these new ‘non-commissionable fees.’ Again, inevitably, business for all will suffer as agencies become unable or unwilling to do all the work for half of the return.

Another practice we attacked during 2009 was the offering by suppliers to individual agents special incentives to encourage the agents to sell their products more aggressively over others offered by the agencies. These so-called SPIFFs can damage the financial health of agencies in many ways. Beyond the specifics, however, we have to look at the things that SPIFFs and base fare manipulation and other such tricks have in common including sheer greed. Such practices grow out of greed and depend on greed to flourish. The inevitable result of such tactics is a net loss to our industry as a whole. We lose in credibility with consumers, in respect and admiration for each other and in financial well-being and stability.

In physics, every negative action is met with a positive one and this is the way it is in our business as well. For every supplier that was motivated by greed or desperation in hard times to act badly, there was a supplier who supported ACTA stance and who acted honestly and decently. While some clung to creative accounting, many saw its errors and vowed to become more transparent in the future. While commissions fell, they rose again and while the economy lagged through the year, it showed significant signs of recovery by year-end.

Through this year, we strengthened ACTA a great deal. We were driven by the economic downturn and its global spread to shore up our capabilities to meet tougher times. We grew in confidence this year as we saw the travel industry in Canada doing considerably better than our counterparts in other countries. We spoke out forcefully and intelligently on issues that have been plaguing our industry for several years or more. We also bolstered our network, adding friends and partners across Canada and throughout the world. We built well in 2009 to prepare for future years.

In that future, we intend to move issues like base fare transparency, SPIFFs, consumer protection, and many more toward resolutions that favour travel agencies and agents. We intend, as well, to continue to widen our community. We’ll work for more profitability for members, for a more informed and cohesive community and for more fun and games to keep this community an exciting and rewarding place to be. I hope every agency will become a member of ACTA, the largest and most influential association in one of the world’s best travel industries.

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