ASTA’s latest research study, the 2008 Travel Agency Service Fee Report, found that although 89 percent of all travel agencies report collecting service fees -down from 2006- almost half the leisure-based agencies surveyed indicated that they operate on a commission-only model for leisure travel services. An overwhelming percentage of corporate agencies, meanwhile, indicated they charge service fees on a per-transaction basis…
ASTA’s latest research study, the 2008 Travel Agency Service Fee Report, found that although 89 percent of all travel agencies report collecting service fees -down from 2006- almost half the leisure-based agencies surveyed indicated that they operate on a commission-only model for leisure travel services. An overwhelming percentage of corporate agencies, meanwhile, indicated they charge service fees on a per-transaction basis.
“As this study found, the service-fee model is changing. Fees today aren’t limited to just traditional brick-and-mortar travel agencies. All the large online agents charge service fees, although many recently stopped charging airline fees to remain competitive. The same market forces that have caused the online agencies to change their models are affecting traditional agencies, pushing many to expand their service fee model, whether it be the amount charged or the number of services for which they charge,” said Chris Russo, ASTA president and chair.
Among the survey’s findings were:
- The revenue share of air sales is expected to decrease 30 percent between 2002 and 2009 (based on respondents’ predictions for 2009), while tour packages and cruise segments have both increased their revenue share since 2002 significantly.
- When respondents were asked the percentage of revenue the agency derived from service fees the range ran the gamut from zero to as much as 99 percent.
- Forty-nine percent of respondents who charge service fees expected to make changes in their service fees in 2009, with 31.6 percent increasing fees “due to a combination of all three above (increased costs, reduced commissions, reduce GDS incentives).”
ASTA conducted this study to better understand how agencies use service fees and track how transaction fees are evolving along with the industry. Travel agencies using the “consulting” model will find data by which to benchmark their fees and policies, while those agencies using the “retail” model will find useful data in determining whether to add additional fees.
This is the only report of its kind that looks at service fee changes by travel segment, internal service fee processes, and service fee collections from an agency point of view.
The ASTA Research Family is comprised of a representative sample of ASTA member travel agency owners and managers. The report indicates a 95% confidence with an error rate +/- 4.7%.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
