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ASTA’s New CEO Faces Budget Issues, Declining Membership

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Assistant Editor’s Note: The following article, by Nadine Godwin and Johanna Jainchill, was originally published in Travel Weekly.

New ASTA CEO Tony Gonchar, a Virtuoso and Expedia veteran, takes on leadership of an organization plagued by budget woes and stagnant membership as it has struggled to navigate the shifting travel agency landscape over the last decade.

After a nine-month vacancy at its helm, ASTA appointed Gonchar to be its new CEO last week. He replaces Bill Maloney, who abruptly departed ASTA in March following a contract dispute.

Asked to identify Gonchar’s biggest challenge, the association’s president, Chris Russo, said, “We have an industry trying to find an identity, and [we] need to make sure ASTA is relevant.”

In an interview last week, the new CEO made it clear that this mission was not lost on him. He identified awareness as one of the three main areas he thinks is in need of focus at ASTA.

“When it comes to awareness, the industry knows ASTA, but consumer awareness about the value of using a travel agency and, more importantly, an ASTA travel agency needs to be improved,” Gonchar said. “One of the goals should be ensuring that ASTA remains the trusted adviser to the travel agent community.”

The other two areas of primary focus, he said, were ASTA’s finances and its legislative agenda.

On all three fronts, Gonchar and ASTA face an uphill battle.

The association has experienced a steady decline in membership over the past decade, mostly due to the declining number of agencies and industry consolidation. This has helped push its finances squarely into the red over the last few years.

In 2007, ASTA lost $808,869. In 2008, its loss fell to $662,289. And according to ASTA’s federal tax filings, it lost $407,311 in 2009. Russo said last week that “2010 will be better than 2009” and that he was “optimistic” that ASTA could finish 2011 with a balanced budget.

Even so, Russo said ASTA’s budget would be “part of a package of challenges, not the main focus” for Gonchar. His overriding challenge, Russo said, would be “to look at ways to accomplish our goals, and budgeting is just part of that. We’ve actually stabilized it, but these [budgetChrisRUSSOs] are always a work in progress.”

Last month, ASTA’s board signed off on a balanced budget for 2011, and Russo said he was optimistic that the group might do even better than that and end up in the black.

Gonchar said his financial background positioned him well to tackle ASTA’s budget woes. At Expedia, Virtuoso and most recently as a consultant to Microsoft, Gonchar said he managed profit-and-loss statements. At Microsoft he has been doing that for the software giant’s call-center division.

“I have a history of being able to assess where there are opportunities,” he said. “There are two places you can focus: cost containment and revenue generation. On the cost-containment side, you can always find areas to cut further and deeper, but at some point you begin to cut into your value proposition. Cutting for the sake of attaining a balanced [profit and loss] could be detrimental to the long-term health of the business.”

Gonchar believes there are untapped opportunities for revenue generation at ASTA.

“While there may be cost-containment and optimization opportunities on the expense side, I think revenues are the primary short-term issue,” he said. “I’ll be looking at several things to enhance that.”

He cited as examples ASTA’s two networking events, the Travel Retailing and Destination Expo and the International Destination Expo. Gonchar wants to ensure that the association maximizes its revenue opportunities at those events, “in the form of participation and sponsorships.”

“Understanding where investments can be made in order to drive revenue opportunities are places I’ve been successful in my history at Virtuoso and Expedia,” he said.

Gonchar was executive vice president of sales and marketing at Virtuoso. Before that, he spent seven years at Expedia running its private-label and branded partnerships division.

He stepped out of travel when the recession hit and Virtuoso scaled back in response to the downturn in luxury travel.

Gonchar said he never stopped wanting to get back into the travel realm, and he began to look again when economic indicators convinced him that travel would rebound more quickly than other sectors.

“Travel is one of the things people tend to not give up,” he said. “The one asset that is most valuable is free time. People have a tendency to invest that asset in experiential things related to travel. … I believe that travel will have a good recovery in 2011.”

At Microsoft, Gonchar has been involved in the company’s first attempt to build a direct-to-consumer channel via Microsoft stores.

Some travel industry insiders predicted that ASTA would be well served by Gonchar’s mix of experience, especially since it spans positions both inside and outside of the travel industry.

“I think in travel there is not enough of a business discipline sometimes,” said Jack Mannix, the former president of Ensemble Travel who now has his own consultancy. “We’re sometimes inclined to overvalue pure travel experience. It’s good to have different types of experience and backgrounds that will help you be a better businessperson. That’s an area where as an industry we could be better.”

Matthew Upchurch, CEO of Virtuoso and one of Gonchar’s former bosses, said his experience in both online travel and a consortium would prove valuable, as well.

“We think Tony is a great choice for this position,” Upchurch said. “His knowledge of the industry from the dual perspectives of positions at Virtuoso and Expedia, his keen analytical skills and strategic ability should successfully guide ASTA as it helps all of us face the challenges and opportunities ahead for the retail community.”

Russo said Gonchar would face “a built-in laundry list of things to address” within the industry as well as the responsibility of determining if ASTA is, overall, an efficient organization.

Gonchar will also have to wrestle with ASTA’s membership issues and its declining dues.

Russo said that while ASTA is doing a good job keeping its members, its challenge was “showing the value proposition” in order to attract new members, “especially as the agency makeup is changing.”

Gonchar said that bolstering membership was part of the awareness equation and could be addressed by convincing the traveling public that ASTA agents are the most desirable in the agent community.

“I don’t think consumers have a strong opinion one way or another if an agency is an ASTA agency or just a travel agency,” he said. “We need to define an ASTA agency as the agency of choice.”

As for legislative issues, Gonchar said the challenges would be “complex” and would include issues that are visible and important to consumers, such as the recent TSA security measures, and issues that are important to the travel trade, such as airlines shifting credit card merchant fees to agencies.

Cheryl Hudak, who served as ASTA president from September 2006 to September 2008, said that one of the association’s biggest challenges was letting agents and suppliers know what ASTA does for them on Capitol Hill. She said if agents understood everything that ASTA did for them, more would join.

“There has been so much legislation that could have hurt agents badly without ASTA’s help,” Hudak said. “And agents can’t watch everything on the Hill. That is what ASTA is for.”

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