Should travel agents charge fees?

Paper


Cassidy, Frances. 2000. "Should travel agents charge fees?" Pforr, Christof and Janeczko, Ben (ed.) 11th Annual Council for Australasian Tourism and Hospitality Education Conference (CAUTHE 2001). Canberra, Austalia 07 - 10 Feb 2001 Canberra, Australia.
Paper/Presentation Title

Should travel agents charge fees?

Presentation TypePaper
Authors
AuthorCassidy, Frances
EditorsPforr, Christof and Janeczko, Ben
Journal or Proceedings TitleProceedings of the 11th Annual Council for Australasian University Tourism and Hospitality Education Conference (CAUTHE 2001)
Number of Pages1
Year2000
Place of PublicationCanberra, Australia
ISBN9780858898325
Conference/Event11th Annual Council for Australasian Tourism and Hospitality Education Conference (CAUTHE 2001)
Event Details
11th Annual Council for Australasian Tourism and Hospitality Education Conference (CAUTHE 2001)
Parent
Annual Council for Australasian Tourism and Hospitality Education (CAUTHE) Conference
Delivery
In person
Event Date
07 to end of 10 Feb 2001
Event Location
Canberra, Austalia
Abstract

Travel agents currently do not charge their clients for the services they perform. Rather their income is derived from commissions paid by principals ranging from wholesalers to airlines and hotels. However, this might change as airlines in particular, are attempting to reduce distribution costs by reducing commissions paid to travel agents.
In recent months Air New Zealand subsidiary Freedom Air have ceased paying commissions entirely, while United Airlines recently announced a reduction of 2% in commissions paid to travel agents effective 01 July 1999 (Read 1999; Brill 1999). Jetset Tours has developed a system to track all hotel and car commissions. According to Jetset's General Manager Corporate Travel, Alan Diamond, they once relied on principals to send them a cheque. Unfortunately, this cheque did not always materialise and so they decided to develop a computer software to track this commission (McMahon 1999).
What if hotels, wholesalers, car companies, travel insurance companies and cruise companies, who currently pay a minimum of 10% commission to retail agents decided to reduce their commissions? How would the retail travel agents make up for this reduction in revenue. How would the retail travel agent stop the spiralling decline in commissions or payment of commissions?
The unrelenting drive by airlines in particular, to reduce cost structures appears to be targeting the commissions previously paid to travel agents. If this continues travel agents face the start choice of seeing profits fall or introducing fees for bookings. This paper will outline current structures of commissions, comment on current changes and examine the options for retail travel agents in the future in relation to commissions.

Keywordstravel agents; commissions; travel industry
ANZSRC Field of Research 2020350899. Tourism not elsewhere classified
350716. Small business organisation and management
380116. Tourism economics
Public Notes

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Byline AffiliationsUniversity of Queensland
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