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Cut Off Your Nose to Spite Your Face

With virtually no airline news to speak of on this X-Mas Eve, I thought I’d share the ridiculous saga of Classic Custom Vacations (CCV). CCV is a luxury tour operator, with a focus on Hawaii. They happen to be owned by Expedia, which is in turn owned by Barry Diller. CCV has traditionally sold through offline travel agencies, who earn a commission on each vacation they sell. So far, so good.

Last week, a large group of luxury travel agencies called Virtuoso announced that they are cutting off ties with CCV. Why are they doing this? Because they believe that Barry Diller, who owns Expedia, Hotwire and Hotels.com, is trying to drive offline agencies out of business. Which is partially true, but definitely NOT true of luxury travel agencies. As you may imagine, Expedia does not sell all that many $7,000 vacations. But CCV certainly does. To be fair, CCV has announced that they will be selling online direct to consumer, but, I’m certain, most consumers will use the site to get smarter about the vacation options, then call a travel agents. Ask cruise companies how many cruises they sell direct. OK, you won’t ask, I’ll tell you. Very few.

So, Virtuoso decided to completely screw over their travel agents by taking away a major supplier of luxury inventory for one of the most popular travel markets. Bravo. Cut off that nose, Virtuoso!

It gets better. Two days ago, another travel agency consortium, Leisure Travel Group, announced the same thing, that they were dropping CCV as a partner. Again, completely nuts.

As CCV’s chairman points out in the above article, these companies aren’t faulting Sabre for owning Travelocity. And, ridiculously, they’ve teamed up with Pleasant Hawaiian Holidays, which aggressively sells direct-to-consumer. Insane.

Offline travel agents, for the most part, have their heads in the sand about the online world. Sure, many of them have been burned by the online agencies, as they’ve seen their airline ticket business drop significantly. But the tour world is different, and it seems nuts to me to penalize your agents and customers because of some vague threat in the future. It’s time to wake up.

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