The professional travel advisor has survived the Internet, online travel agencies, supplier direct-booking initiatives, a pandemic and now artificial intelligence.
But I believe the profession faces another threat that our industry has been far too reluctant to confront — a threat our industry can no longer afford to ignore.
It is the proliferation of business models that allow consumers to obtain the economics and privileges of being a travel advisor while making virtually no investment in actually becoming one.
Let me be very clear: This is not about new travel advisors.
Our industry desperately needs talented new people. We should recruit them, train them, mentor them and help them build successful businesses.
Every successful travel advisor was new once.
But there is an enormous difference between creating a pathway into a profession and creating a shortcut to its economics.
Pay a fee. Gain access to an agency credential. Book your own travel. Collect commission on purchases you would have made anyway. Gain access to industry rates and benefits. Perhaps recruit others to do the same.
That isn’t the next generation of professional travel advisors.
It is a business model built upon blurring the distinction between the travel professional and the travel consumer.
And the organizations with the greatest ability to stop it are the same organizations making it economically possible:
The suppliers themselves.
Follow the Money
Suppliers control the economics.
They decide who qualifies for commission. They determine who receives travel advisor rates, FAM opportunities and other benefits historically intended to educate, support and reward professional travel advisors.
Consider a consumer who has historically booked directly with a cruise line.
That consumer becomes a “travel advisor,” gains access to an agency credential and books the same cruise they would have purchased anyway.
What has the supplier gained?
It hasn’t acquired a new customer. It hasn’t created incremental demand. It hasn’t taken business from a competitor.
The customer was already there.
The supplier has simply converted a direct booking into a commissioned booking.
Now consider a consumer who historically booked through a professional travel advisor and then joins one of these programs.
Again, the supplier hasn’t acquired a new customer.
Instead, the commission moves from the professional advisor who developed and serviced that customer relationship to the customer themselves.
That isn’t distribution. It’s cannibalization.
And that cannibalization has a real cost.
The Cycle Makes Even Less Sense
At the same time this is happening, suppliers are becoming increasingly aggressive about controlling distribution costs.
Marketing funds are scrutinized. Cooperative marketing support becomes harder to obtain. Overrides require aggressive growth targets. Successful professional agencies producing millions of dollars in annual sales are increasingly expected to prove that every additional supplier dollar invested in them will generate incremental revenue.
I have no problem with that.
Suppliers should demand a return on their investment.
But apply the same standard everywhere.
Consider the cycle we may now be creating.
A professional advisor develops a customer, builds the relationship and generates business for a supplier.
That customer then joins one of these programs and begins booking their own travel.
The professional advisor loses the sale.
The professional agency loses the production.
The supplier retains the customer — but now pays that customer a commission for buying the product they were already purchasing.
Then the supplier looks back at the professional agency, sees slower growth and begins questioning its marketing support.
Think about what just happened.
The professional advisor developed the customer.
The supplier’s economics helped move that customer away from the professional advisor.
The supplier began paying the customer to book their own travel.
The professional agency’s production declined.
And then the agency may receive less supplier support because its production didn’t grow enough.
The supplier is potentially spending more to service demand that already existed while spending less on the distribution channel capable of creating new demand.
That isn’t simply cannibalization.
It’s a cycle that rewards the cannibalization.
There is something fundamentally backwards about reducing investment in the people whose job is to create demand while increasing compensation to channels that may simply capture demand that already existed.
Stop Rewarding Volume Without Asking Where It Came From
The economics can extend well beyond the commission.
Some of these business models are now being embraced by larger consortia, where their production can become part of aggregate sales volumes upon which suppliers may provide overrides, marketing fees and other forms of compensation.
But not all volume creates equal value.
How much represents new customers or business shifted from competitors?
How much represents demand created by professional advisors actively selling and recommending a supplier?
And how much represents existing customers simply routing purchases they would have made anyway through an agency credential because the industry gave them a financial incentive to do so?
Those distinctions matter.
We may be taking business that once required no distribution compensation, adding a commission to it, and then potentially attaching additional economics as that production moves through the distribution system.
Meanwhile, we continue looking for savings in the professional agency channel.
Stop rewarding volume without asking where the volume came from.
Only Suppliers Can Fix This
Industry associations can talk about professional standards. Accreditation organizations can establish requirements. Host agencies and consortia can make their own decisions.
They can all help.
But let’s not pretend they hold the real power.
The suppliers do.
Suppliers created the economic incentives that allow these models to flourish, and suppliers can change them.
No government regulation is required. No new industry bureaucracy is necessary.
Suppliers simply need to decide what behavior they are willing to pay for.
That doesn’t mean erecting barriers to entry.
Let new advisors enter the profession.
Let them train.
Let them sell.
Let them earn commissions on the business they generate.
Give them a reasonable period to establish themselves.
But at some point, continued access to the economics and privileges intended for professional travel advisors should require evidence of professional activity.
Production. Training. Client business. Tenure. Certification. Some reasonable combination.
The exact standard can be debated.
The principle shouldn’t be:
Professional benefits should require professional activity.
Suppliers already establish production thresholds for virtually every other economic relationship in our industry.
They know how to do this.
The question is whether they are willing to.
Somebody Has Already Done the Math
Concerns about these business models have been rumbling through the professional travel community for years.
What I find remarkable is that corporations so intensely focused on margins and distribution costs appear not to have addressed the underlying economics more aggressively.
These are sophisticated companies.
They forecast demand. They optimize pricing. They measure customer acquisition costs. They scrutinize commissions, overrides, marketing funds and virtually every other distribution expense.
So why isn’t this receiving the same scrutiny?
What does it cost when your customer becomes your commissioned distributor?
And the model isn’t going away.
Established organizations continue to operate. New variations continue to emerge. Some have become substantial businesses. Some have gained access to major industry distribution organizations. And some have attracted significant institutional investment.
That last point should get the attention of every supplier CFO.
Institutional investors don’t put significant capital into these businesses because they want inexpensive vacations.
They invest because they see an opportunity to generate a return.
If sophisticated investors have determined that there is significant economic value in building and scaling these travel-advisor platforms, supplier CFOs should be asking themselves a very simple question:
Where does that value ultimately come from?
The answer isn’t to attack individual companies. As long as the underlying economics remain attractive, someone will build a business around capturing them.
Trying to address this one company at a time becomes an industry game of whack-a-mole — except the existing moles aren’t necessarily disappearing. More keep appearing.
Fix the economics that make the model attractive.
Somebody has already done the math.
Perhaps it’s time our suppliers did too.
Put a Number on It
So here is my challenge to the CEOs, CFOs, Chief Commercial Officers and revenue management teams of our industry’s major suppliers:
Put a number on it.
Determine how much commission you are paying on personal travel booked by individuals who became travel advisors principally to obtain an economic benefit on purchases they were already going to make.
Determine how much of that business previously came through your direct channel.
Determine how much previously came through professional travel advisors.
Then look beyond the commission.
Determine what additional overrides, marketing fees and percentage-based compensation may be attached to that production as it flows through agency organizations and consortia.
And then answer the question that really matters:
How much of that business is genuinely incremental?
Don’t simply measure how much a channel produces.
Measure how much business that channel actually creates.
Before the next budget meeting concludes that another $100,000 needs to be removed from professional agency marketing, ask your finance department a different question:
How much are we paying in commissions and other distribution costs on business we didn’t need an intermediary to acquire?
You don’t need another industry task force to answer that.
You need your finance department.
And if the number is meaningful, then the next question becomes unavoidable:
Why are we cutting investment in the people who create demand while continuing to subsidize business models that cannibalize it?
Being a Professional Travel Advisor Should Mean Something
Professional travel advisors have spent decades proving their value.
They find customers. They influence purchasing decisions. They introduce travelers to products and destinations they may never have considered. They advocate for their clients. They build relationships that generate business year after year.
Most importantly, they create demand.
That is professional distribution.
And that is what the economics of professional distribution should reward.
A commission should compensate someone for creating, influencing or servicing a sale — not simply for finding a way to place their own purchase through an agency number.
This isn’t about protecting professional advisors from competition.
Competition makes us better.
It isn’t about keeping newcomers out.
We need them.
It is about preserving the distinction between someone who enters this industry to sell travel and someone who enters it primarily to buy their own travel for less.
Professional travel advisors should not be asked to compete against a business model subsidized by the very suppliers whose products they spend their careers selling.
The biggest threat to the professional travel advisor today isn’t technology.
It isn’t artificial intelligence.
And it isn’t the new advisor genuinely trying to build a career.
It is an industry that has forgotten to distinguish between the travel professional and the travel consumer.
Suppliers created the economics that allowed that distinction to become blurred.
They have the data to determine what it is costing them.
And they have the power to change it.
Put a number on it.
Then do something about it.
Because being a professional travel advisor should mean something.
It’s time our industry started acting like it does.
Lee Smolinski
Chairman & CEO
Oasis Travel Network