About two dozen community banks in Iowa have signed UP for a joint venture between the Iowa Bankers Association and a Des Moines travel agency.
While banks have long offered travel services, the Iowa Bankers Association, in forming a separate subsidiary to operate travel agencies in its members' branches, has come up with a new development. According to the American Bankers Association, no other state bankers association provides such a service to its members.
And, by all accounts, the service, known as TravelClub, is welcome - especially to community banks, which in Iowa are in small, sometimes isolat. ed communities that often have no travel service provider.
Hopes for Fee Income
Since the plan was introduced last month, 27 banks, all of them in small, rural towns, have signed on, according to Daryl Lewis, marketing and communications manager of the association.
"We feel like it will generate traffic in the bank," said Dick Park, chief executive of Hancock County National Bank, which will install a TravelClub agent in its bank soon that will be the only travel service in the town of Garner (pop. 3,000). "We are very hopeful and confident that it will produce fee income for us."
TravelClub is a joint venture between the IBA and Airborne Travel Associates of Des Moines. The IBA owns 85% of the company; Airborne owns i5%.
Regular Travel Agency
The 512 member banks can participate in two ways. Affiliate members pay $250 a year and agree to refer the travel business of its customer "clubs," such as seniors clubs, to TravelClub. In return, the bank will get a 2% referral fee on all the billings.
Associate members of the program agree to have a full-blown travel agency inside the bank. TravelClub must do a feasibility study to make sure the agency will make money, and banks pay $500 a year to have the service.
Mr. Park, whose $58 million-asset bank is in a town with no travel agencies, said he is confident the in-bank agency will be popular and able to increase his revenue stream beyond just referral fees.
"We'll be very disappointed if the agency isn't able to crosssell," he said. "My intentions are to incorporate banking activities in such a way that they integate with the travel agency, and vice versa."
He said he will probably market deposit accounts geared toward saving for vacations booked at the bank.
"We also have a number of good industries in this town that we do business with," he said.
Push from Seniors Clubs
The IBA's Ms. Lewis said the TravelClub idea started two years ago when rural banks began to prod the association to offer travel services for its seniors clubs.
According to recent survey of community bank members of the American Bankers Association, only 4.1% of the respondents said they offered a travel service in their bank. However, 14% plan to offer a travel service in the next two years.
