The Airline Reporting Corporation (ARC) is primarily responsible for what function?

The correct focus of the Airline Reporting Corporation (ARC) lies primarily in its role of accrediting travel agencies. ARC serves the crucial function of providing standardization and regulating the financial reporting and settlement processes between travel agents and airlines. This accreditation process allows travel agencies to issue airline tickets and facilitates the financial transactions that occur as a result.

While the options regarding hotel rates, airline ticket distribution, and airline cargo services are relevant aspects of the broader travel industry, they fall outside of ARC's direct responsibilities. For instance, hotel rates are typically influenced by hotel chains or travel management companies rather than a regulatory body; ticket distribution involves different players, such as Global Distribution Systems (GDS); and cargo services are handled by airlines and logistics companies rather than ARC itself. Therefore, the correct answer emphasizes ARC's significant role in maintaining standards and accreditation among travel agencies within the airline industry.