From: carter@spot.Colorado.EDU (Mike Carter)
Newsgroups: rec.travel.air
Subject: Bucket Shops
Keywords: bucket shops consolidators etc
Date: 16 Apr 92 23:21:09 GMT
Article-I.D.: ucsu.1992Apr16.232109.1883
Organization: University of Colorado, Boulder


I received this via mail and was asked to post it without identifying info, so
please don't mail/flame/etc me about it.

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"Consolidator" and "bucket shop" are sometimes used interchangeably, but aren't
exactly the same.  (What I said about "consolidator tickets" applies to
the sorts of discounted tickets sold by consolidators, regardless of
whether you buy them directly from the consolidator or through a bucket
shop or another retail travel agent.)

Consolidators are agencies that have discount agrrements with the airlines.  In most ca
In most cases, especially with the big and the U.S. airlines, consolidators
are wholesalers who sell only through retail agencies, not directly to the
public.  (I recall seeing a list in the Consumers Report Travel Newsletter
of some consolidators who deal directly with the public.  But retail
customers will, of course, be charged more than wholesale customers.)
In any case consolidators do NOT offer retail service.  If you want
a straightforward round-trip ticket, know what airline you want to go on, and
exactly what dates, and that that airline has the best route and price, fine.
But of course many itineraries aren't like that, and most people need a
retail agent's help to fiigure out what's the best ticket for them.

Any retail travel agent can buy tickets from consolidators, and most
U.S. agents who do significant international ticketing are familiar
with some of the biggest consolidators for major carriers.  Bucket shops
are retail agencies that specialize in knowing the full range of
consolidators (every airline has many consolidators) and in other
techniques of fare construction, importing tickets, etc. for discount prices.

Consolidators basically fall into three categories:

(1) Wholesale only -- no retail sales or advertising.  (You may have seen their
names, however, in the validation box of tickets bought through a retail
agency.)  These are the consolidators most local travel agents know about.
They generally deal only with round trips originating in the country where
they are based, and seem to be most common in the U.S.  They advertise
heavily in the travel agency trade press.

(2) Sppecialty agencies selling both wholesale and retail.  Freuently an
agency operating and retailing tours to a particular country will have
a discount agreement with the airline it uses for its tours ((generally the
national carrier of the destination) and will also wholesale tickets
on that airline.  One reason they do the wholesale business, even if their
markup on wholesale tickets is very low, is to boost their volume of productuion
(sales) with the airline, as many discount contracts are contingent on

a specified sales volume, and/or have year-end bonuses or additional
commission rebates based on sales threshholds.  Sometimes they are
"general sales agents", that is, official representatives of an airline
(usually a small one) that doesn't have service or its own office in a country.

(3) Bucket shops.  Many bucket shops negotiate their own deals directly
with the airlines for routes where they can't get good (or any) discounts
from (1) or (2).  They use these deals for their own retail customers,
and frequently also to other bucket shops.  (Sometimes they negotiate
these deals specifically to be able to export the tickets to bucket
shops in other countries, as when a Singapore bucket shop gets permission
to discount tickets originating in the U.S.)  Bucket shops' own deals
tend to emphasize one-way tickets, which are essential for constructing
around the world tickets and which often aren't available for other
consolidators.

Enough on consolidators.  As for getting tickets at the last minute:
Airlines wait until they have a good idea how full their planes will
be (based on advance booking levels) before they decide how deeply they
need to discount their tickets to consolidators to fill their planes.
So consolidator contracts with the airlines are subject to change,

usually several times a year, and generallyy forbid sales of tickets for travel
commencing more than a few months after the sale.  Verifying  prices
with vendors around the world, and then importing tickets, can take
a couple of weeks (unless youwant to pay extra for air courier service).
So  you can't exxpect to get the best price, or to get your tickets, many months ahead (
months ahead (except for times like Christmas, when prices are set
and planes fill up many months in advance.)  On the other hand, it shouldn't
take more than a couple of weeks to get your tickets from a reputable,
effiicient agency -- barring complications.  (The most common, and justifiable,
complication, especially with a complex ticket, is that one of the rates
has changed and a different source or fare construction has to be found.
Customers find this hard to understand, but it isn't always possible
to call or fax an  oversees -- or even a domestic -- supplier to verify
every fare in their wholesale tariff, which is always subject to change,
before quoting a price to the customer.)

I didn't set out to write a treatise on bucket shops, so this hasn't
been well organized.  Maybe I will sometime for Lonely Planet
(although my bosses DO read Lonely Planet guides)...

As for what to do, I wouldn't think of buying an international ticket
from a neighborhood travel agnet, even if I told them to try to find
a consolidator fare.  Depending on your itinerary, try either an agency
specializing in that destination and/or a bucket shop.  You'd be
surprised how often local agents, when they have a customer for
a weird destination or routing (especially around the world) simply buy
the tickets from a bucket shop and mark them up to the customer.

You'll get the best price if you shop around, but remeber that rating an around the
the world itinerary can take an hour of work ((for which the agent is paid
nothing if you end up getting the ticket elswhere).  So don''t be
surprised that the fare isn't in the computer, can't be  given off the
top of the agents head, and the agent will give only a very rough estimate
of the fare unless you make clear that you are really serious about
getting the ticket from that agency if the price is right.


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[The following is from a friend who doesn't have an account.]

	Disclaimer: I'm a travel agent (for the time being).
I'm not trying to sell my services, or my agency, and I think
my perspective is primarily that of a traveller, not a travel
agent (which is how I got the job).  But it seems only fair to
tell you tell you where I'm coming from.  If you don't like it,
press "n" now...

	The term for the sort of travel agency you describe is
"bucket shop" (apocryphal etomological theories vary).  Bucket
shops serve a limited and specialized subset of the air ticket
market, and are mostly concentrated in a few world cities:
London, Singapore, Bangkok, Hong Kong, and San Francisco.
Much smaller and less competitive bucket shop marketplaces include
New York, Athens, and Nairobi.  It's worth going far out of your way
to deal with a bucket shop -- the overwhelming majority of travel
agents don't even try to compete with bucket shop fares.  For that
matter, most agents couldn't construct the sorts of routings
the better bucket shops specialize in (especially customized
around-the-world itineraries) at ANY price.

	How do they do it?  For one thing, simple specialization.
Almost all air tickets sold in the U.S. are domestic round trips
(the majority) or the simplest international round trips (mostly
to resorts in the Caribbean, Mexico, or perhaps Europe).  I haven't
the faintest idea what the fare is to Cancun, and our agency policy
is to tell callers flatly, "I'm sorry, we don't handle domestic travel."
On the other hand, most agents have never booked a ticket to Moscow
in their life, and might get one around-the-world customer a year.
I get round-the-world enquiries every day.  "You need to go to
Manilla, Hong Kong, Moscow, and Paris?  No problem.  Of course,
no airline flies directly from hong Kong to Moscow, so the route
and the fare would be as follows:..."

	How do they get their fares?  That's an extremely complex
question, which I can''t answer fully both because (1) it would
take too long and (2) I'm not supposed to divulge trade secrets
(although my boss, so far as I know, isn't on the net -- and there
is surprisingly little overlap between the hacker community and
even the most skilled CRS {compterized reservations system} users,
perhaps because travel agents are mostly women and hackers mostly men.).
Even a sketchy answer requires some explanation of fares in general:

	International airfares  are set by interantional agreement and
regulated by the airline cartel, IATA.  Most interantional airlines
are closely related to, if not directly owned by, their national govern-
ments.  Most governments in turn have an interest in protecting the
profits of their national airline, and the IATA fares are artificially
high.  IATA rules officially prohibit discounting, and in some countries
these rules are actually enforced -- one reason some countries have
no bucket shops whatsoever (although tickets originating in those
countries can often be bought in other countries, if you know wher to
look).  All official fares are "published" either in hardcopy (the OAG)
or elctronically to the CRS's.  Most important, only published fares
are shown in any CRS.  That works OK for domestic U.S. fares, since
with deregulation domestic carriers can publish pretty much any fares
they want, and change them at whim.  If they wnat to lower the fare,
they lower the publish fare.  So getting the best domestic fare means
learning how to search whatever CRS the travel agent uses (the major
ones are pretty comparable on completeness of published fare listings),
figuring out which seats on which flight itineraries it applies to,
mbooking seats accordingly, and driving the ticket directly from the
CRS (using its "auto-price" capability).

	Bucket shops subvert the airline cartel conspiracy against
wdiscounting in various ways.  Airlines can contract with
wholesalers ("consolidators") to sell tickets at less than published
fares.  These rules on routes, stopovers, seasonality, etc. for these
tickets are governed by the contract, not by the rules for any published
fare.  Sometimes bucket shops contract directly with airlines and
SOmetimes they buy and resell tickets from consolidators.  Since the
goal of the airlines is to get each passenger to pay the most they are
willing to pay, airlines try to discount tickets in such a way as to
fill otherwise-empty seats rather than divert full-fare passengers
to cheaper tickets.  Frequently, they restrict how consolidator tickets
can be advertised, such a forbidding mention of the name of the airline
or allowing the discount fare to be promoted only to a particular
geographic or ethnic market.  It's common for tickets to be most heavily
discounted in a place far (even thousands of miles) from where the
ticket either begins or ends, so as not to depress the primary market.
If a consolidator fare is TOO successful, the airline will raise the
fare or terminate the contract.  Many conolidators won't deal directly
with the public, and net fare tariffs are confidential.  One of the
most important skills for a buccket shop agent is having a feel for the
wholesale ticket market.  It's one thing to ask your local agent to
try to buy you a consolidator ticket.  It's quite another for the agent
to know who, and where, has the best price for what you want.

	Other consolidators, and some retail agencies (especially those
with a large volume on one airline to one destination, such as those
serving specialized ethnic markets) recieve more than the standard
commission on some or all of the published fares of a certain airline
to certain destinations.  This is permitted by IATA rules.  The
"incentive", "override", or "bonus" commission is officially forbidden
to be rebated to the customer, but of course is.  (In fact, bucket shops
often end up with a smaller ppercentage commission than normal
agencies).  Figuring the actual price to the passenger with such
commission deals is particular complex, since one must satisfy all the
conditions of both the published fare and the commission deal.  Net fare
contracts usually have mush simpler rules.  (For example, the cheapest
ticket may be issued at a higher fare that also has a higher commission.
For this reason, and because net fare tickets usually carry the "full"
afer as their officail price, the "face value" of a ticket need bear no
relation to the price paid.  All else being equal, the HIGHER the face
value of the ticket the better, since in general high-value tickets are
more readily changed, rerouted, etc.)

	Finally, the bucket shop business is global.  Your local travel
agent might buy from a domestic consolidator, but they WON't import
your ticket from overseas, even if that would be much cheaper.  The
major bucket shops in SFO, HKG, BKK, SIN, and LON regularly buy from
each other.  Costs of DHL and international faxes are less than the wide
interantional variations in ticket prices.  Theres a lot more to it
(especially in constructing routes and connections, which no CRS
does well for complex international routes), but in many ways a
bucket shop is simply a ticket broker, buying for its retail customers
on the world wholesale ticket market.  Most bucket shop tickets, if
you inspect the validation, are not issued by the bucket shop itself.
If you already knew exactly where to buy them, you could often get a
slightly better price directly.  But the odds are you couldn't find
the best deal for yourself -- the whole system is, DELIBERATELY,
stacked against just that.

	Round-the-world tickets are the epitome of the bucket shop
agent's art.  Don't be fooled by published around-the-world fares.
They restrict you to the extremely limited routes of just one or two
airlines.  Only rarely are they the best deal; to put it another way,
only the rare itinerary can be shoehorned into such a fare without
mangling it.  Most around-the-world itineraries can be best and most
cheaply ticketed as a series of one way tickets from point to point.
Constructing a round-the-world fare requires both deciding at what
points to break the circle into segments and getting the best price
for each segment (where each ticket may actually, with stopovers, cover
several legs of the journey).  On top of that, most people aren't sure
when they start planning a round-the-world trip exactly whip stops they
want, or in what order.  Good round-the-world agents are rare, even in
bucket shops -- but your average travel agent doesn''t even know where
to begin.

	As for buccket shop reliability, it varies.  Caveat emptor.
They tend to be wheeler-deelers, and of neccessity they cut their
margins thin.  Find out how long they've been around.  Check them out
with the Better Business Bureau.  See if they belong to the American
Society of Travel Agents (which has its own arbitration system).  Go to
their office in person, if you can.  If it's worth it to your peace of
mind, pay by credit card so you can refuse the charge if you don't get
your tickets.  You'll probably be surcharged 2-5% for using a credit
card, but its simple, cheap, and effective insurance.  (one thing not to
believe is favorable references.  Except for complete frauds, even
rip-off agencies have satisfied customers.  The test is what they do
when things go wrong.)  For what it's worth, I have yet to encounter a
completely fraudulent bucket shop, and most are pretty reliable.  But
you have to recognize that you can''t expect the best service at the
lowest price.  It's especially important to remember that fares change
constantly and that no estimate is certain until the tickets are
actually issued.  (Amazingly, airlines claim the right to increase fares
even after tickets are issued, althought they never do.)

	It's late, and my typing is getting tired.  Let me know if this
is useful info.  I've seen several similar queries, and meant to answer
them.  But I'm not on the net, and my friend doesn''t have posting
priveleges.  So I'm sending this as a private mail message.
Please post it to rec.travel, minus the header and signature,
which aren't mine anyway.  Not to be paranoid, but my boss really
wouldn't like my saying much of this.

These are long, but I do think the info in them should be in the faq,
as they clear up some common misconceptions about the airline ticket
market.  Or perhaps, if they don't go in THE faq, they should be posted
monthly in a bucket shop posting.  Perhaps they could even be the
nucleus of a list of bucketshops people have found reliable...?
thanks for the first attempt!
-- 
				- Mike
				  carter@spot.Colorado.EDU
Newsgroups: rec.travel.air