Chambers of Commerce Compete With Travel Agents

(MoneyWatch)  You probably have seen them advertised, a trip sponsored by the local chamber of commerce to some place like China, Sweden or Greece. They are seemingly innocuous, but local travel agents say that chambers of commerce shouldn't be their direct competition by sponsoring and selling packaged tours.

"Call it infanticide or call it cannibalism, but whatever you call it, the fact that Chambers of Commerce would be selling travel in direct competition with its members is an outrage," Bill Maloney, chief executive of the American Society of Travel Agents, said in a release addressing the issue. "Chambers of Commerce exist to help local members get more business, not to compete with them."

In Santa Cruz, Calif. the local chamber is sponsoring a $2,185 eight-day trip to Greece in March. The chamber, which started by offering a trip to China in 2007 before the Beijing Olympics, sold around 900 packages in its first offering -- making $700,000 and nearly tripling what the chamber raised through events and memberships. The chamber realized its packaged trips were a new source of cash -- but was it at the expense of local travel agents?

Previously, when the chamber used out-of-town travel agents, it was easy to say it was. However, its latest trip to Greece is being supplied by local Pacific Harbor Travel of Santa Cruz. Still, other local travel agents are offering cheaper rates to Greece to attract customers.

When an agency, supposed to advocate for business, becomes a competitor -- who does that help? While I don't think that this means local chambers of commerce will suddenly be offering life insurance or employment recruiting, I do see how local businesses can feel like they were just sucker-punched. The recession is hurting business and the last thing a local business owner wants to see is the agency they pay a fee to taking away perceived business.

The Santa Cruz Chamber of Commerce has made some changes to its packaged tours, and by using a local agent it lessens some of the impact. Unfortunately, because it's profitable, I don't see chambers quitting the travel business. Only when the money stops will the agencies turn to something else.