Travel Agents: Operating beyond the ticket sales regime

The total zero percent commission policy on ticket sales which has been adopted by almost all airlines may be forcing travel agencies to create new streams of revenue along new services.

Traditionally, travel agents have depended largely on ticket sales for the bulk of their revenues. With airlines selling tickets directly to travelers through multiple e-ticketing platforms, travel agents are already dislodged from their dominant business haven.

This direct sales method is a global trend resulting from the need for airlines to shore up revenues while keeping costs down. Airlines both international and domestic were known to be offering about 10 percent commission on a ticket sold to a customer but was gradually reduced to 1 percent and now zero percent due to overheads cost. It has also been observed that several airline sites even offer reduced costs and extra incentives for customers ordering tickets online.

In response to this direct selling strategy by airlines, the travel agents in the country that are keen on remaining in the business of travel and tourism are beginning to offer an array of travel products to corporate organisations and individual customers that include arranging transportation, holiday package, hotels, motels, sightseeing, transfers of passengers and luggage between terminals and hotels, as well as special events such as music festivals and theatre.

Rather than stick to being mere airline ticket agents these agencies have transformed themselves into travel management firms operating in the vibrant and dynamic global tourism industry.

They now handle reservations for special-interest activities such as religious pilgrimages, conventions and business travels, incentive and educational tours.

Analysts and stakeholders believe that the wealth of professional expertise garnered by travel agencies in the business of travel should now be deployed to deepen their services to travel enthusiasts. More than this, moving away from commission revenue is also a way for the travel agencies to align their activities with global trends.

We believe that rather than raise issues with the no-commission business model of airline local travel agents should embrace fully the new trends in the travel market, push the frontiers further and engage in consumer surveys to detect better ways of providing services to their potential and existing clients.

The tourism industry is a dynamic one replete with opportunities. Tourism has won respect and credibility around the globe as a powerful driver of the economic engine of nations. The numbers speak for themselves. Generating over US$ 1 Trillion per annum in direct earnings (indirect earnings being as high as three-fold those of direct earnings), tourism provides nations with a proven, solid source of revenue.

Each and every day over 7 million people travel internationally, crossing borders and flight paths, journeying between countries and cultures. Over 70 million people travel each day within their own borders.

The travel agents should exploit properly the bountiful opportunities in the global tourism industry by being dynamic and acquiring relevant capacity to boost their offerings and operations.

By: BusinessDay