- Lee Smolinski has argued that business models allowing consumers to obtain travel agenteconomics without investment threaten the profession.
- Smolinski has stated that suppliers control commission qualification and travel agentrates and benefits.
- Smolinski has described the movement of commission from professional travel agents to consumers as cannibalisation.
- Smolinski has challenged supplier executives to determine how much commission is paid on personal travel booked by such individuals.
- Smolinski has stated that professional benefits should require professional activity and that suppliers can change the incentives.
Professional travel agents may be about to face the biggest threat of all, according to an American travel trade analyst.
Lee Smolinski, Chairman and Chief Executive Officer of Florida based Oasis Travel Network argues that the professional travel agentfaces a threat from business models that allow consumers to obtain the economics and privileges of being a travel agentwithout investing in becoming one. He has stated that the industry has been reluctant to confront the proliferation of such models. He has distinguished between creating a pathway into a profession and creating a shortcut to its economics.
Smolinski states that suppliers control the economics by deciding who qualifies for commission and who receives travel agentrates and benefits. He has argued that when a consumer becomes a travel agent and books the same cruise they would have purchased directly, the supplier has converted a direct booking into a commissioned booking without acquiring a new customer or creating incremental demand.
He contends that when a consumer who previously booked through a professional travel agent joins such a programme, commission moves from the professional travel agent to the customer, a process he has described as cannibalisation.
Smolinski has st out a challenge to supplier chief executives, chief financial officers, chief commercial officers and revenue management teams to determine how much commission is paid on personal travel booked by individuals who became travel travel agents principally to obtain an economic benefit on purchases they were already going to make.
He then asks suppliers to determine how much of that business previously came through direct channels or professional travel agents and how much additional overrides and marketing fees are attached to that production. He states that professional benefits should require professional activity, that suppliers created the economic incentives allowing these models to flourish and that suppliers can change them and calls on suppliers to put a number on the cost and to act on the result.
