Guest comment: David Brown, Sabre
I can understand how vulnerable British travel agents felt at the news that British Airways has slashed its commissions to one percent. BMI and Iberia are among those who have already followed suit and I believe it’s only a matter of time before others implement similar policies. Airline commission payments are not dead – Virgin Atlantic has shown how a fine-tuned commission structure can help boost sales on targeted routes – but agents should definitely be looking to another source of primary income.
A number of industry figures have gone on record to encourage British leisure agents to adopt the service fee concept. In support, I would add simply that agents should be planning to phase in service fees sooner rather than later. UK travel management companies have been successfully using this model for some time, as have leisure agents elsewhere. It works, and as long as agents can demonstrate the value that they add to the travel booking process, their customers will understand.
I encourage agencies to talk to their technology providers to see how these companies can help smooth the transition to a service fee environment. Sabre Travel Network has been communicating its role as a marketing partner for agencies for more than 18 months, preparing the UK leisure agency community for the day when it might have to switch to a service fee environment. I believe that day has dawned.
Some GDS operators have a range of traveller-facing tools and services, and many of these are free of charge. A few have been accepted enthusiastically by agents, such as personalised websites for travellers containing itineraries and destination information. Others have been embraced less widely, despite their ability to add greatly to the overall level of service that an agency could potentially offer – not just at the planning and booking stage, but during travel and post-travel, too.
I happen to believe that good travel consultants are worth their weight in gold when it comes to experience, insight and back up. But your GDS operator should be able to show you how these tools and products could add even more value to the role that the travel consultant plays in the entire travel process. It should also be able to give you advice on how to structure your mid- and back-office technology to cater for the new service fee regime.
Finally, I would urge leisure agencies to look to their cost base, and use electronic processes wherever possible. Electronic tickets represent a significant saving for agencies, but go to any British airport and you’ll see how many are still issuing paper tickets. Electronic invoicing processes are available. And for simple point-to-point bookings, make sure you can offer your customers an online booking option.
It’s a nerve-racking time for many British agents, and we do empathise. Rest assured, though, service fees are definitely the way forward for the leisure travel agent, and they’re a lot more reliable and lucrative than commissions ever were.
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