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HomeNewsArchivesTRAVEL INDUSTRY CONSENSUS: FIGHT AIRLINE CAPS

TRAVEL INDUSTRY CONSENSUS: FIGHT AIRLINE CAPS

Aug. 31, 2001 – A move by major airlines which could cut off the territory's lifeline to mainland overnight tourists drew travel agents, tourism officials, retailers and hotel representatives to the Caribbean Travel Agency on St. Thomas Thursday to talk about what they can do about it. One thing they agreed on: They can't just sit back and let it happen.
The meeting was held during a two-hour closing of travel agencies across the nation to protest the drastically reduced cap on travel agent commissions recently announced by most of the major airlines for domestic travel.
The closing, a "Nationwide Day of Awareness," was called by the American Society of Travel Agents to protest what ASTA says is the airlines' intention to put their agencies out of business. Travel agents on St. Croix and St. John also closed their doors for the specified period, from 1 to 3 p.m.
The commission cap was reduced from $50 to $20 on round-trip domestic tickets. The territory is considered an international destination for travelers from the mainland in all instances except for passenger ticketing. Thus the reduced cap can save the airlines millions of dollars a year in commissions on travel to the territory.
Federal Department of Transportation statistics show that for the year ended June 30, 2000, the number of long-haul passengers arriving or departing St. Thomas on regularly scheduled flights totaled 655,330, the approximate equivalent of 327,665 round-trip travelers. At $50 per round-trip, commissions would amount to nearly $16.4 million. At $20, they would come to a little over $6.5 million.
Last week, four days after American Airlines became the first carrier to announce the commission cuts, Delegate Donna Christian Christensen wrote to the airline president protesting the move and asking him to rescind it because it "would certainly damage this small U.S. tourism market."
Christensen noted that the cutback in commissions for travel to the territory while a $100 cap remained in place for foreign travel would "discourage travel agents from booking flights to the Virgin Islands, because they would be able to get a higher commission by booking their customers to other Caribbean islands under a foreign flag."
A representative of the delegate's St. Thomas office was unable to attend Thursday's meeting because of a gas spill near Frenchtown which cut off traffic to town. However, Shawn-Michael Malone said calls to his office were being answered by a message stating Christensen was in support of the travel agents' protest.
Courtney Gabrielson, secretary-treasurer of Caribbean Travel, told the Source Friday morning, "It's all well and good to write to the airlines; we appreciate it. But we need something stronger. I think the delegate should contact the Departments of Justice and Transportation. The airlines have shut down so many agencies already; I think it's time we stop wringing our hands and take strong federal action. I'm sure there's collusion going on here."
The cap also affects Puerto Rico, where a five-hour closing of travel agencies and a march to local government offices were held Thursday, according to Lyn Shoemaker, owner of Paradise Travel, one of about 20 travel agents who attended the meet Thursday on St. Thomas.
At the meeting, Joseph Aubain, executive director of the St. Thomas-St. John Chamber of Commerce, suggested forming an alliance with Puerto Rico to fight the new cap.
Gabrielson told the group: "It's not just about travel agents. This is our livelihood — the territory's livelihood, the hotels', the taxis', the retailers', the restaurants', everybody's. We have to have tourists, and if the stateside agents don't sell the Virgin Islands, where will we be?"
The effect is inevitable, she added: "Why would stateside agents sell the V.I. for a $20 commission when they could sell, say, Tortola or St. Martin and make the $100 international commission? It's a very serious matter."
Gabrielson and her sister, Brooks Brown, president of Caribbean Travel, which has been doing business on St. Thomas since the 1960s, spoke at the meeting about the personal aspect of the issue, as well. "The Internet is not personal, and many people don't want to give their credit card number to a website," Brown said. Also, she said, travel agents often can get better fares than those available on the net — and make all the client's arrangements at one time.
Gabrielson said customer service is a concern, too, posing the problems for "the person who doesn't have a computer, or somebody who doesn't speak English well." She said, "I feel terrible for those people. They're at such a disadvantage. What are they going to do without travel agents to check fares for them and help them? Go to the airport and stand in line for hours?"
Brown said many of her company's clients don't like to use credit cards even in person. "They come in with their cash and tell us where they want to go, and we're in business," she said. "We've been doing it for years."
Angela Belfon of World Wide Travel and Shirley Monsanto of Monsanto Travel, who between them have about 60 years of local travel expertise, agreed. "We have to help our people," Belfon said. "They depend on us."
All of the agents agreed the $20 cap could put them out of business, but Belfon said, "That won't happen; we're going to fight this." Among other things, they have employees to protect, she said.
Henry W. DeLagarde, general manager for the Tourism Department's North American offices, said, "My feeling is this didn't happen overnight. It raises the question of an antitrust suit. The major carriers use the destination 'international' when it suits their needs." He said all six of the mainland Tourism offices closed during the ASTA protest period Thursday.
Richard Doumeng, president of the St. Thomas-St. John Hotel and Tourism Association, termed the "domestic" designation for ticketing to the territory "the final insult." He said, "The airlines use 'international' to make people go through customs and immigration and take much longer booking flights, but when it comes to money, to caps, it's domestic."
Doumeng said about one-third of the guests who stay at his property, Bolongo Bay Beach Club and Villas, "go to our website" for information, "but only about 2 percent book from it. They still want personal service; they go to their travel agent."
Rina Jacobs McBrowne, Government House spokeswoman, said she was there representing the governor, who was on St .Croix meeting with Tourism Commissioner Pamela Richards. McBrowne and Monique Sibilly-Hodge, assistant tourism commissioner, said the governor and Richards were working on a strategy to fight the commission cap, and that the plan would be announced soon.
Aubain said on Friday that he and the St. Thomas-St. John Chamber president, John de Jongh Jr., have written to Gov. Charles W. Turnbull and to Christensen suggesting that the territory form an alliance with Puerto Rico to fight the domestic cap.
Gabrielson said Friday she was very encouraged by Thursday's show of support. "We're just not going to just sit back and take this," she said. "We can't."

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