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The recently renamed American Society of Travel Advisors went through a bleak decade-and-a-half when it kicked off the 21st century. After reducing commissions for a few years, U.S. airlines eliminated them for then-flight-dependent travel agents in 2002, and thousands of storefronts disappeared.
It didn’t help their national trade association at all when travel agents realized the group couldn’t do much to stem the bloodletting. Suppliers disengaged from the group, membership tanked, and attendance at ASTA’s annual global conferences plummeted.
“They were running out of money, they were running out of members,” said Marc Casto, president and CEO of San Jose, California-based Casto Travel, and a former ASTA board member. “It was a wonderful study in how to destroy a great association at that point.”
For a look at ASTA’s financials from 2011 to 2016, see the chart below.
He pointed to a characterization of the trade association’s flagship convention about a half-dozen years ago as being right on target. “One of the press comments, which was unfortunate but highly accurate, was you could could roll multiple cannonballs down the aisle and not worry about hitting a soul,” Casto said.
But in the intervening years. ASTA has done much to turn itself around. Many point to the restructuring of the organization in 2012, when it created its first full-time president and CEO position, and the hiring of Zane Kerby to fill it the next year as pivotal events. Kerby had been number two at the Global Business Travel Association, serving as deputy executive director.
“It’s changed,” said Denise Jackson, president and CEO of San Diego, California-headquartered Balboa Travel Management, and chair of ASTA’s Corporate Advocacy Committee, referring to the trade association’s transition. “The leadership has changed, and I think that has made a significant difference. I can speak to the last five or six years. I think we are more laser-focused. People got reengaged at every level. Not just teeny, tiny agencies but large corporations.”
As the chart below shows, when Kerby took up his post in 2013, following the departure of ASTA CEO Tony Gonchar a few months earlier, the association was wracking up losses. The group, which is classified as a not-for-profit trade association, turned a $549,000 loss in 2013 into a nearly $693,000 gain in 2016, the latest figures we found.
ASTA’s Financial Losses and Gains 2011-2016
|Revenue||Expenses||Revenue Less Expenses|
|2011||$3.93 million||$4.13 million||– ($198,000)|
|2012||$3.81 million||$4.04 million||– ($237,000)|
|2013||$4.01 million||$4.56 million||– ($549,000)|
|2014||$3.98 million||$3.57 million||$412,000|
|2015||$4.47 million||$3.73 million||$746,000|
|2016||$4.82 milliion||$4.13 million||$693,000|
Source: Charity Navigator, and Foundation Center
Kerby credits commitments by consortia, groups and large agencies such as Virtuoso, Travel Leaders Group, and Signature Travel Network, as well as the reengagement of major suppliers, ranging from Royal Caribbean to Enterprise Holdings, with getting ASTA moving in a positive direction.
“It was a big role and a challenging role, especially because the association had gone through 13 years of financial losses, and so we had to fix a lot of things quickly,” Kerby said of his early days at the travel agent association. “It felt like a startup. We had to go to our investors and say, you gotta believe in us, and here’s why.”
The rise in influence of travel agency consortia over the years contributed at first to ASTA’s decline, but also to its rebound, Kerby said.
The consortia had strong commercial ties to agencies, and didn’t really see a need for a national trade group, which was under-funded, he said. “I think the real story of ASTA’s revitalization begins and ends with the consortia leaders and the large agency owners who breathed new life into ASTA,” Kerby said.
He approached them about five years ago, arguing that travel agencies needed a strong national organization to advocate both on the state and national levels on their behalf. “If each of the consortia has to create an advocacy apparatus that can respond to both state and national threats that come along that can get expensive really quickly,” Kerby said. “That’s especially when you consider putting any kind of lobbying group on retainer at a state level could cost tens of thousands of dollars.”
Subsidizing Travel Agency Memberships
Kerby called on the large agency groups to subsidize or pay for agency memberships in the association. The membership fees range from $199 for independent contractors to $35,000 annually for the largest agencies based on sales volumes.
“I think John Werner at MAST Travel Network was the first one to say, listen, we’re going to subsidize membership at ASTA for our entire network,” Kerby said. “That move kind of paved the way for Signature Travel Network in September 2014 to step forward and say, you know what, we’re going to mandate membership at ASTA. So if you’re a member at Signature Travel Network, you have to get a membership at ASTA.”
Groups like Virtuoso and Travel Leaders implemented similar schemes.
The roster of agency memberships in the association has increased 15 percent since 2013 to 2,738 despite considerable agency consolidation, an ASTA spokeswoman said.
In addition to the membership uptick, Dave Hershberger, ASTA chairman and owner/president of Prestige Travel in Cincinnati, Ohio, is bullish about the enhanced participation of suppliers such as airlines and cruise lines at the annual trade show in Washington, D.C. this summer.
American Airlines, which was an active executioner of the commission cuts that decimated agencies 16 years ago, brought about a dozen people to the conference in August. Alison Taylor, American’s senior vice president of global sales and distribution, gave a presentation on stage on how the airline is giving employees training in customer service for the first time, offering improvements in maternity leave, and making strides in reducing mishandled bags.
In a moment that might have been unthinkable a decade or more ago, Taylor told the crowd: “We treasure our travel advisor relationships.”
Hershberger marveled that a Celebrity Cruises vice president instead of a subordinate was staffing a trade show booth at the conference.
“United’s a big supporter,” Hershberger said. “Turkish Airlines is all over us because they know we’re getting the people here that make the decisions on who to buy from. I’m in a really good position in some ways because we’re on the way up. I just have to keep my foot on the gas pedal and keep it going.”
Kerby trimmed staff levels at the trade association when he took up his post, and Hershberger credits him with bringing in or promoting quality executives such as Eben Peck, executive vice president of advocacy; Karen Kelly Morris, director of meetings and events; and Kelly Bigel, senior director of business development, among others.
Lobbying at the state and national level, where accomplishments are measured in millimeters, as one consortia executive characterized it, is one of ASTA’s central missions. Funding for the ASTA Political Action Committee rose 342 percent to $278,600 from 2012 to 2018, officials said.
The U.S. Senate passed and President Trump signed into law the Federal Aviation Administration reauthorization bill last week. One hot-button issue was seven disclosures that agents would have been required to make to clients when talking with them on the phone. The disclosure requirements were absent in the final version of the bill.
“These disclosures were not about your seat being changed, but some of them were so out there,” said Jackson of Balboa Travel. “There’s been a pesticide sprayed on the plane in India, and I’m supposed to know that for travel that you’re doing in six months?”
The bill instead requires agents to refer travelers to the Department of Transportation’s insecticide website for more information, an ASTA spokeswoman said.
“While we fought against this provision, it is a modest expansion of the existing requirement that won’t meaningfully add to talk time,” the spokeswoman added.
As part of the momentum that the trade association points to, some 150 members went to Washington, D.C. in May, and met with legislators to discuss such issues as the FAA Reauthorization bill, independent contractor classifications, and the Travel Agent Retail Fairness Act.
“Members are engaged during our legislative days and going to the Hill,” said Jackson, who heads up the association’s advocacy council. “The advocacy work that we are doing is amazing compared to really hardly any in the past.”
ASTA also takes credit in working with members, chapters and coalitions, in helping to beat back proposals in Illinois, Maine, Ohio, and Pennsylvania to expand state sales taxes to travel agency services.
Kerby acknowledged that sometimes making progress in Washington is very difficult. “Getting legislation proposed is very, very hard to do,” Kerby said. “Look around all the trade associations that you can think of, all the ones that are bigger and richer than we are, and see how many bills they’ve proposed.”
Although the trade association’s membership ranks are up modestly, there are plenty of travel advisors in the United States who aren’t on the bandwagon.
One small travel agency group executive, who declined to be identified, said she doesn’t see the value in ASTA, or in travel agent designations because clients don’t really care about them. The executive also said she resented the trade association’s ties with Marriott, which recently reduced commissions, as did Hilton, for meeting planners.
Marriott is a member and sponsor of ASTA. The hotel chain was a sponsor of ASTA’s Advocacy Dinner in Washington, D.C., and had an exhibit at the trade show in August.
In a statement about Marriott, which acquired Starwood in 2016, ASTA said “it is disappointing when any supplier partner takes steps that devalue their relationship with our members.”
The trade association added, “We have and intend to spotlight suppliers whose business practices recognize travel advisors’ value, to raise concerns as appropriate with governmental stakeholders about the impact of supplier consolidation, and to otherwise give our members the tools they need to thrive in this complex and ever-changing industry.”
Meanwhile, in terms of traction with online travel agencies, while Expedia Holdings is a member of the trade group, and increased its contributions at a critical moment, according to Kerby, Booking Holdings dropped out of the group several years ago.
Things To Do
The trade association’s challenge these days is to keep up its momentum, and to make good on some of its initiatives, including a new consumer marketing campaign to reintroduce the public to the value of travel advisors while driving traffic to its soon-to-be revamped TravelSense.org website.
The goal is to drive 100,000 visitors monthly on a consistent basis to the site, where consumers can search for ASTA-verified travel advisors, and find specialists in various types of vacations.
ASTA indeed has made a comeback and has momentum, but as its executives know, the battle for relevancy and to increase its value to big agency groups and smaller organizations is one that the trade association will have to grapple with every day.