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Travel agencies trying to set prices, critic says

It's tough to be a travel agent these days.

With airlines cutting commissions and more people buying tickets by phone or on the Internet, travel agencies are having more trouble staying afloat.

So when representatives from several local travel agencies gathered in Spring Hill on Oct. 1, it seemed only natural that they talk about a way to increase their income. They decided to form a professional group and implement a standard set of fees on the services their members provide.

Want to buy an airline ticket to visit your grandchildren in Long Island? That'll cost you an extra $10. Need to cancel your cruise or tour reservation? That'll be $25, please.

Problem is, it's against the law for competitors to get together and set prices on their products. It's called collusion, or price-fixing, and it is a federal offense.

That's what Charles Voelker of Above-n-Beyond Travel said he told the group when he refused to join.

"I sat there and told everybody that you can't do this. It's against the law," Voelker said. "The whole thing makes me sick to my stomach."

Voelker's wife, Linda, attended the Oct. 1 meeting when the new organization, the Hernando County Association of Travel Professionals, was formed. But when he heard that the group had set fees its members should charge, Voelker said he knew that his family's firm wouldn't be involved.

"I'd still like to be in business this time next year," said Voelker, a former used-car dealer.

Many of Voelkers' competitors felt differently. Eight of them have joined the fledgling organization: West of the Moon Travel, Spring Hill; ACBS Travel Agency, Spring Hill and Brooksville; Voyager Travel, Spring Hill and Brooksville; Around the Earth Travel, Brooksville; Seven Hills Travel, Spring Hill; ABBA Travel, Spring Hill; Diana's Travel, Spring Hill; and Premier Travel, Spring Hill. The phone book lists 14 Hernando travel agents.

While the president of the organization, Randy Bowser of West of the Moon Travel, was out of town and unavailable for comment Friday, the group's treasurer, Greg Myers of ACBS Travel Agency, denied that the group had done anything wrong.

"We're not concerned. What the individual agencies do is on their own accord," said Myers, who said that the group's attorney had signed off on their actions.

Jim Malcolm of Voyager Travel agreed. He said that in his opinion, the fees do not constitute price-fixing.

"I see an association forming. I see nothing different from a builders' association or a Realtors' association," said Malcolm, who is also a Hernando County School Board member.

Malcolm said one of the main reasons the association was formed was so members could combine their advertising dollars. He emphasized that members are not required to charge the association's fees: "There's still competition. We're cooperative but still competitive."

Allegations of price-fixing are nothing new in the travel business. In the past, it has been the major airlines that have been accused. Now, because those airlines have cut commission fees to travel agents, many agents have been forced to charge fees.

It is a practice that has been growing across the country. According to the American Society of Travel Agents, one in four of its 27,000 members now charges service fees. In 1995, only one of 10 members charged fees.

"If you check the professional (travel) publications, you'll see that charging transaction fees and different fees like that have been talked about for a number of years," Malcolm said. "For survival, (travel agents) will need to start charging fees for their work."

There is nothing illegal about individual travel agencies setting fees for their services. However, when competing agencies get together and set rates, that's an entirely different matter.

If federal or state officials decided to prosecute the matter, the Hernando agencies could be in trouble since they put their intentions on paper.

"Each participating member will have the option of charging more if they desire, but the minimum amounts as listed must be adhered to," the group wrote in the minutes from the Oct. 1 meeting. "It was unanimous by all members present to implement these fees as soon as possible."

Although Voelker said the agencies had planned to begin charging the fees Oct. 16, it is unclear whether all eight agencies are actually levying them. If they have, the agencies could be open to either civil or criminal lawsuits, said Thomas Hurst, a law professor at the University of Florida.

"This sounds like a pretty clear-cut violation," said Hurst, an expert in antitrust issues. "The Sherman Antitrust Act prohibits agreements among competitors."

That act says it is unlawful for competitors to agree upon either maximum or minimum prices or on the fees that are paid to agents. The agreement doesn't even have to be on paper. It also applies to telephone calls, conversations or other communications between competitors about their pricing.

If the agencies wish to avoid lawsuits from customers or competitors, it would be best to stop charging the fees, Hurst said.

"Basically, what the group could do was get together and rescind their prior action," he said.

Although state and federal agencies have been informed about the situation, it was unclear Friday whether they would take action against the agencies.