Risky Business? Agency Brings Clients, Vendors Together

A New York City travel agency is bringing its corporate clients and suppliers together for a networking event that flies in the face of the conventional wisdom.

Bill Sarcona, assistant general manager for KIE/Kintetsu, realizes that some travel sellers might see KIE’s annual Travel Showcase as a risky venture that might result in direct vendor to client sales. But he disagrees.

Sarcona said the showcase started as a way for KIE, a branch of the Japanese travel management firm KIE/Kintetsu International,  to promote its hotel program. The showcase has also proved to be a vehicle for strengthening relationships with its corporate clients, he said.

As for the risk? Sarcona said clients simply won’t find a better deal by going direct to suppliers rather than through KIE. Travel Market Report spoke with Sarcona about the showcase and how it can work for other agencies.

What was the purpose of the first showcase?
Sarcona: It was aimed at promoting our hotel program, which is very strong. We book 60,000 room nights a year in New York alone and we leverage that to get seriously discounted rates, as well as many other extras like upgrades, free breakfast and late check-out. We can also get blocked space others can’t get.

The first showcase was aimed at promoting the hotel program and only involved hotels. Starting two years ago we brought in airline, car rental and a variety of vacation vendors.  This year, our fourth, we had 30 New York City hotels, 10 airlines, a number of car rental companies and several vacation vendors. And we had 160 clients.

Did you consider the possibility that vendors and clients would cut out KIE and begin working directly?
Sarcona: Agencies are afraid of that but we see it as a win-win. Every year the number of clients and suppliers has increased. In fact, we now charge vendors a fee of $250 and that offsets our catering and other expenses. We believe that because of the volume of business we do, our clients will simply not be able to get as good a deal directly as they do with us.

And the showcase really strengthens our relationship with the client because the vendor is able to educate them about their hotel or other product. We actually had to turn away a few vendors this year.

Also, I had two hotels call me in the past year telling me that accounts had gone to them directly and they had directed them to us. Even if a couple of direct relationships were established, it would still be well worth it.

How does the showcase work?
Sarcona: We send an invite out to clients and vendors several months before. We are lucky to have an outdoor terrace at our office which works great when the weather is good. Vendors each get a table on the terrace. When clients arrive we give them a bag to collect information. There is sushi and other food, as well as wine and beverages. We have prizes of business class tickets to Japan, as well as prizes from most of our vendors, including hotel rooms and car rentals.  The event runs for three hours on a weeknight.

Who attends from each group?
Sarcona: Salespeople attend from the vendors. From the client side, it ranges from actual travelers to secretaries or administrative staff who book company presidents. We are selective about who we invite. And we also invite people from accounts who have been inactive – and even some potential clients. We get good coverage from the Japanese press.

Do you think this practice might work for smaller agencies?
Sarcona: It would work for any size agency. Vendors love the idea and are happy to create special promotions for events like this. We put our logo on the special promotion flyers so clients remember where they came from.