Changes to the YTB Travel Network Booking Engine Effective January 5, 2011If this was a planned transition, why is it done literally at the last minute with an email sent out at 4:30pm on the day of implementation?
Orbitz Worldwide will replace Travelocity Partner Network as the provider of air, car and hotel products and will now be the EXCLUSIVE provider of said products on the YTB Travel Network booking engine.
There are a few reasons why Travelocity might drop YTB including excessive chargebacks and credit card disputes. Considering that YTB is not recognized by the airline industry as a legitimate travel agency, perhaps YTB does not know the way that chargebacks are handled. Charges are ultimately made by the airline and when a dispute arises, the airline asks no questions and refunds the amount and (under the terms of the ARC Agreement) debits the issuing agency for the amount--Travelocity.
The shift to Orbitz is questionable considering that YTB sells a good amount of Carnival cruises. Orbitz no longer sells American Airlines along with Expedia. One would have to think that American Airlines provided a substantial lift to the YTB clients looking to cruise. I wonder if YTB took the time to actually look at the carriers and city pairs before this 11th hour decision was made.
Of course, had YTB not been in the business of re-selling their IATAN credentials several years ago, they could still be recognized as a legitimate travel agency and been able to negotiate upfront (possibly) and back end (certainly) commissions with many airlines. Many larger agencies still find a lot of profit in selling airline tickets.
Yet it seems that this new "exclusive" relationship between Orbitz and YTB is nothing more than the standard program available to every company in the world to manage their travel. YTB will merely translate the Orbitz data to appear on their booking site by data mapping. What is curious is that YTB is claiming Orbitz is paying "commission" of $2.50 per ticket. See, some travel agencies are indeed making money on airline commissions. But is the $2.50 all that YTB is getting or is there more? Another interesting note is that Orbitz has said that commissions will not be paid until travel has commenced. Again, this offers further support that chargebacks may have been the crux of the breakup between Travelocity and YTB.
How long will this "exclusive" venture last? There is only one other online agency out there after Orbitz that can handle this type of deal--Expedia. Will YTB remain in the travel business long enough? Time will tell as it seems that right now all focus is on Zam Zuu and recruiting new members to sell girdles.