Last updated: 04:43 PM ET, Wed June 25 2014

How Are Agency Groups Responding to Sam's Club Travel?

Host Agency & Consortia Claudette Covey June 25, 2014

How Are Agency Groups Responding to Sam's Club Travel?

Photo courtesy of Thinkstock

The announcement of the new Sam’s Club Travel, the travel package brand for the wholesale club of Walmart Corp., has agency groups wondering about rebating and pricing.

“We need to make sure that there’s a level playing field with the distribution channel,” said John Lovell, president of of such travel clubs as Sam’s Club Travel and Costco. “We can’t allow these clubs to rebate the commissions or anything back to their membership because that’s a direct violation of the rebating policies that are out there in the marketplace.”

He noted that there are travel clubs that do not enforce rebating policies, adding that he hoped suppliers would work toward stanching rebating on the part of Sam’s Club Travel.

“They need to make sure that they’re not putting their largest distribution channel, which is the travel agent, at a competitive disadvantage,” Lovell said, adding that with a level playing field “the distribution channel always wins.”

One way for rank-and-file travel agents to maintain a competitive edge against the large travel clubs is to join such consortia as to take advantage of the value added amenities that they offer, said Lovell.  “If all things are equal, the travel professional that has an established relationship with the client has a different relationship than a club would per se when it comes to selling travel.” 

What’s important to remember, said Libbie Rice, co-president of Ensemble, is that said although an agent might lose a customer to Sam’s Club it’s simply because of pricing issues. “This type of customer will never be loyal to you because they are always searching for the next deal,’ she said.

To maintain a competitive advantage, travel agents should focus on the service and value they offer as professionals. “Just as important is to not be afraid to ask your customers to support your local business,” Rice said. “Your messaging should explain not only your value in enhancing the vacation, but also the value your business brings to a thriving local economy and community spirit.”

Agents, she said, should not hesitate to promote their ties to their local communities and the value of personalized service. “People must realize that if they primarily deal with the big boxes of the world, eventually there will be no small merchants or feel-good community pride,” said Rice. “You’re offering them a full-service experience from start to finish. With Sam’s and Costco, it’s strictly taking an order.”