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TRAVEL INSIDER

Paying Agents to Book Flights Is Now the Norm

Service fees * Travel agencies charge $5 to $30 to arrange air tickets, and most clients are staying with them despite the extra cost.

March 26, 2000|CHRISTOPHER REYNOLDS | TIMES TRAVEL WRITER

In the good old days--which in this case means 1994--when travel agent Susan Dushane sold a $1,200 airline ticket to Europe, she pocketed a commission of 10% to 15% from the airline and charged the traveler nothing.

But those days are gone. In late 1996, Dushane's agency, Travel by Greta in Northridge, began charging travelers $15 per airline ticket. In the last five years, the business of selling airline tickets has changed significantly. As a result, most travel agents, who formerly charged travelers nothing, now charge $5 to $30 a ticket.

The reason for the change: airlines streamlining their business. Increasingly, U.S. carriers are eliminating the middleman (or woman) and selling seats directly to consumers, often by Internet. As major U.S. carriers have begun to depend less on agents, they also have steadily reduced commissions to travel agencies.

Airlines now routinely pay 5% commissions, up to a maximum of $50 on a domestic flight or $100 on an international flight. Thus, Dushane's 1994 European ticket commission of $120 to $180 would be a flat $100 today, she said.

Travel agents now have a far smaller piece of the action, especially with last-minute bookings of business- and first-class seats.

The domino effect of the airlines' move is clear in a new study by the Alexandria, Va.-based American Society of Travel Agents, which has about 11,000 member agencies. ASTA reported that 87% of the agents who responded have initiated ticket fees since January 1997, and 88% now consider the fees part of business as usual. The charge varies depending on the agent, the type of ticket and whether the consumer is a regular customer.

Other findings:

* Agents said they had retained 92% of their customers since imposing service fees.

* The service fees averaged $13 per ticket.

* About 18% of the agents started assessing fees in 1997, followed by 31% more in 1998 and 38% more in 1999.

* Aside from charges for initial airline bookings, 84% of the agents said they charge for refunds, and 83% said they charge for cancellations.

If you were already a frequent traveler before this fee trend gained momentum, these figures suggest that you probably haven't changed your habits. Those who value travel agents' help are willing to pay the new fees. On the other side, those who spurned agents when their services were free are still spurning them.

As I've noted before, I've seen friends spend years searching for an agent who could please them, then give up and make their own bookings because they trust only themselves. I also have friends who have clung to the same agent for 10 years, even though they now live in different cities.

Nationwide, industry officials count more than 43,000 travel agency locations, which sold $76.6 billion in tickets in 1999, about 80% of all airline tickets sold.

The larger question may be the next generation of consumers, a group more likely to be comfortable with Internet shopping. With that generation of consumers in the foreground, the future looks shaky for travel agents of the old-fashioned variety.

So agents are turning to a variety of new strategies--some of which we consumers may want to embrace, some of which we might rather deflect.

For instance, back in Northridge at Travel by Greta, Dushane, like thousands of agents nationwide, has increased her emphasis on selling cruises and tours (cruise lines and tour operators pay higher commissions) and on the time-honored retail practice of "upselling"--that is, persuading consumers to spend a bit more than they first intended.

Also, Dushane has not only stuck with those service fees that the agency introduced in 1996, but she also occasionally increases them to as much as $50 (giving clients advance notice) on particularly demanding itineraries.

"When I'm saving them hundreds of dollars," Dushane said, "it's worthwhile."

To find those deep discounts, she began investigating and relying more often on consolidators--wholesalers (sometimes affiliated with tour operators) that acquire large numbers of tickets from the airlines at cut rates, then peddle them to agents. Because the consolidators' trade can be so tenuous--these are often small outfits that operate on thin margins with a high mortality rate and little time for customer service--some agents have resisted using them.

Now, Dushane said, more agents are studying this option. Using it might take more time than making a standard airline booking via the computer reservation system, but it can save travelers money and yield agents better profits.

For example, with a traditional booking, a traveler might pay $2,200 for a round-trip first-class ticket to Hawaii. With three calls and a bit of good luck, Dushane recently found a consolidator ticket for less than $1,000, with several days of rental car privileges and trip insurance thrown in. She sold it to her customer for about $1,100, saving him more than $1,000 and giving her more than twice the revenue she would have had booking directly through an airline.

Usually, consolidator savings aren't as dramatic. (If you're willing to spend the time, you can find discounted air tickets on your own through outlets such as http://cheaptickets.com and http://air4less.com.) But if you use a travel agent, it's worthwhile to ask whether he or she is checking consolidator fares.

One emerging trend not reflected in the study is "plan-to-go" fees, said Dina Long, an ASTA spokeswoman. Agent Sande Davidson of Sun City, Ariz., who coined the term, often charges upscale travelers $50 in advance for researching a relatively pricey itinerary. If the research yields a booking, that payment is sometimes applied to the cost. But if the booking falls through, the agent has at least received some compensation.

*

Christopher Reynolds welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or send e-mail to chris.reynolds@latimes.com.

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