Organizations in the Distribution Process - Tourism: Principles, Practices, Philosophies - page 152

Travel Agency Network (IATAN), or appointed by Cruise Lines International Association (CLIA) to
do business.
ARC is the premier provider of financial settlement solutions and data and analytical services for
the travel industry. Airlines, travel agencies, corporate travel departments, railroads, and other travel
suppliers process more than $80 billion annually through ARC's world-class settlement system,
making it the financial backbone of travel distribution. ARC is an airline-owned company. The ARC
Web site is www.arccorp.com .

The Changing World of the Travel Agent

Although the travel industry has struggled through tough times in the twenty- rst century because of
9/11 (that is, September 11, 2001) fears of severe acute respiratory syndrome (SARS) in 2003, the
global recession of 2008 and 2009, and concerns regarding terrorism and war throughout the decade,
the long-term expectation for all travel sectors

except travel agents, is recovery and growth. The
travel agent sector reached its peak in numbers in September 1997 with 33,775 ARC-accredited retail
agency locations. As of July 2010, there were 15,335 ARC-accredited retail agency locations. Agents
sold over $80 billion worth of air travel in 2009. 1
After decades of offering travel agents a standard commission of 10 percent or more, air carriers in
the United States stopped paying base commissions to travel agents in 2002. These changes in the
commission system driven by the airlines altered the distribution system fundamentally. Agents were
no longer paid to process transactions, and the airlines lost a huge sales force that was not paid until a
sale was made.
To offset the loss of commissions, agents developed new sources of income. The most readily
available source was service fees. Today, travel agencies charge fees for their services. In addition to
charging fees, many agents have also turned to selling more cruises and tour packages and shifted to
an emphasis on leisure travel.
A second major factor in the decline in travel agents is the Internet, which has affected travel
purchase behavior. The Internet has changed the way much commerce is conducted. Many businesses

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Travel agents work with clients, saving them time and money with a personal touch. Using the latest
computer reservation technologies, travel agents are able to access the most up-to-date information.
Photobytheauthor.