Accreditation and Associations
In order to sell or resell travel services, a travel provider must be accredited. There are different accrediting associations, and each fills a distinct role. Essentially, they act as governing bodies, and are responsible for setting standards across the airline industry.
Once accredited, an airline or agency will get their own unique accreditation number. Using this number, agents are able to book travel in the GDS and are eligible to earn commissions from vendors. Some accreditations also allow agencies to issue airline tickets.
Who Needs It?
Independent agents: Without an accreditation number, they are simply not allowed to sell travel. For some agencies, it is worth the hassle to get accredited. However, if they can’t get accredited, then they must join a host agency or franchise.
Host agencies: Agents that work under the umbrella of a host agency do not need their own accreditation. They are covered by the agency’s accreditation. Since getting accredited is no simple task, that’s pretty much a major reason why agencies work under a host.
Corporate travel: Accrediting associations offer special accreditation programs for corporate travel as well.
Who Are They?
As far as US-based agencies go, the two most important accrediting associations are ARC and IATA/IATAN.
In its simplest form, the Airlines Reporting Corporation (ARC) serves as the accounting department for the airline industry. They handle all the financial transactions between airlines and agencies. (Think of it as the travel industry’s equivalent of Visa, MasterCard or AMEX.)
Besides the actual money exchanged during the purchase, ARC also handles all the payments of commissions from the airlines to agents.
Tip from the Pros: ARC works seamlessly with any GDS. You don’t ever log into an ARC system, since all ARC transactions are done through the GDS.
To become an ARC accredited agency is a grueling and costly process. Therefore, if an agency does not do any ticketing on their own, they can apply to become an ARC Verified Travel Consultant (ARC VTC). This lower-cost program will give the agency recognition in order to book directly with vendors, but they can’t do the actual ticketing themselves. And of course, if an agency joins a host or franchise they can avoid the need to become ARC accredited altogether.
To sum up: ARC does all the financial transactions. Therefore, if your agency will do actual ticketing, then you must become ARC accredited.
The International Air Transport Association (IATA) is an international organization – but they also have a specific branch for US-based agencies. Just like ARC, they also have a non-ticketing option as well.
While ARC focuses on the financial side, IATA serves a bit of a different function. To quote from their website; “IATA’s mission is to represent, lead, and serve the airline industry.” Their core goals are to:
- Represent the airline industry, by advocating for the interests of airlines across the globe. They challenge unreasonable rules and charges, hold regulators and governments to account, and strive for sensible regulation.
- Lead the airline industry by developing global commercial standards upon which the air transport industry is built.
- Serve the airline industry by helping airlines to operate safely, securely, efficiently, and economically under clearly defined rules.
There are the 4 types of IATA accreditations:
- IATA – with air ticketing
- IATA TIDS (Travel Industry Designator Service) – No air ticketing
- IATAN (International Airlines Travel Agent Network) – with air ticketing
- IATAN (International Airlines Travel Agent Network) – No air ticketing
As you can see, there are 2 key differentiators: US or international, and ticketing or no ticketing.
If you are not doing any ticketing, it is fairly easy to become IATAN accredited. As long as you are an official company that does travel – such as a home-based or storefront agency, or arrange corporate travel for your company – you’re pretty much guaranteed membership. All you need to show is 2 plus years of industry experience, and that you have invested at least $10,000 in your business.
Tip from the Pros: Even though technically all members in the USA belong to IATAN, there is little difference in the details between IATA international and IATAN United States. As a matter of fact, most IATAN members just refer to it as IATA, and drop the N.
So, Do You Need Both?
If you are based in the USA, the short answer is yes. They are both definitely needed in order to sell air travel – but not necessarily needed by you.
Remember that IATA does not do any financial transactions in the US. Those are always handled by ARC. Therefore, an agency can’t do any transactions in any GDS without an ARC. And when it comes to getting air contracts, no vendor will do business with you unless you have IATA.
However, this doesn’t mean that you need to get accredited yourself. As mentioned before, you may be able to join a host agency or franchise – especially when it comes to the oh-so-hard-to-get ARC.
ASTA & GBTA
For the purposes of this training, all you need to know are ARC and IATA. However there are a few other big names that you should consider. These are not nearly as important in scope as ARC and IATA, but serve a great purpose for certain agencies.
Do You Need A Travel Agent License?
In the United States, there are 5 states that require a travel agent license: California, Florida, Hawaii, Iowa and Washington. This license can apply to agents who operate their business out of any of the states listed here or agents who would like to sell to residents of any of these states. To find out more about the requirements related to each of these states, you can visit their websites here:
Here is a great link to the Host Agency Review blog that explains it all in detail: https://hostagencyreviews.com/blog/travel-agent-license
Chapter 4 Takeaways…
- In order to sell travel services, a travel provider must be accredited.
- ARC and IATA/IATAN are the two main associations for US based agencies
- ARC: Does all financial transactions
- IATA/IATAN: Sets rules and standards in the industry
- IATAN is the US version of IATA
- You can avoid the need to become accredited by joining a host or franchise.
- You need a travel agent license if you live in or service clients in California, Florida, Hawaii, Iowa or Washington