In a meeting last week between the Association of Retail Travel Agents (ARTA), ARTA Canada, and United Airlines, a wide range of topics were discussed, most notably, United’s escalating distribution costs. The United team was headed by Dave Myrick, vice president, sales Americas, who understands the importance of travel agents and agreed to work with ARTA and ARTA Canada to find alternative ways to improve the mutual value that United and travel agents bring to one another.
ARTA and ARTA Canada made it clear to United that travel agencies would not be able to sustain the costs and fees associated with a shift of merchant status to agents, and that even if they could manage these increased costs, merchant processors are almost all unwilling to provide these services to travel agencies as travel is considered too “high risk.” Acceptance of merchant status was characterized as not an option for the agency community, not only because of the unbearable costs, but also because of the liability for chargebacks.
The three ARTA and ARTA Canada delegates offered a wide array of options to United to help lower the carrier’s overall distribution costs, methods to facilitate and encourage alternatives to credit card forms of payment, and several new processes to drive increased traditional and incremental revenue to United. These costs savings and increased revenues will help offset some of United’s annual US$710 million in distribution expenses.
“United has some serious challenges with distribution costs. ARTA sees these challenges more clearly now and will do all we can to encourage programs and solutions that help address these escalating costs without burdening the travel agency community,” said Barry Richcreek, heading up ARTA’s US delegation.
At its board meeting in New Orleans last week, ARTA agreed to withdraw its complaint at the DOT regarding ARTA’s concerns over the shift of credit card merchant fee status to agencies; this as a sign of good faith that ongoing talks with United will improve the overall agency/airline relationship.
“Our discussions with United were both frank and very constructive. We are convinced that United’s credit card merchant policy was intended to address concerns which the carrier has with less than one percent of travel agencies and that the plan does not represent a wider strategy by United to alter its relationship with the majority of agencies. We are encouraged by United’s willingness to maintain open and continued discussions,” said Bruce Bishins, CTC, who represented ARTA Canada.
Both ARTA and ARTA Canada hope to continue the positive and productive dialogue already underway with United.