As the world opens up and people begin to travel again, travel agents are heading back to their office. But there is one thing we did not expect to come so soon…
Major airlines have announced that the commissions they pay agents for booking clients on their planes are no longer going to be paid. Or if they are, it will only be 1% on an international long-haul or zero on an international short-haul.
The first airline to announce the news was Qantas with their plan to cut agent commissions on fares from 5% down to just 1% by the middle of 2022. A string of major airlines including Emirates, Singapore Airlines, Air New Zealand, American Airlines and Cathay Pacific are soon following suit on what appears to be a downward trend in agent commissions for booking fares.
Igor Kwiatkowski, Qantas’ Executive Manager of Global Sales and Distribution, stated in Travel Weekly that maintaining the airline’s current commission structure is no longer viable and that the cuts are central to its recovery plan. “We know our travel agency partners have also been hit hard by COVID-19. The crisis has driven a lot of permanent change in how airlines do business and that’s clearly going to extend to agents as well," Kwiatkowski stated.
Not only is this affecting travel agents, it is affecting passengers too. There have already been reports that people are spending more time on hold with an airline than they are actually flying with them. As we see a massive cut in travel agents commission in the upcoming weeks, the travel agency community will continue to play an important role in each airlines’ distribution strategy and will continue to support through the distribution of fares and products through sales and frontline support.
If clients are entirely dependent on airlines and their online system, imagine trying to keep up with the Covid requirements on a long trip to Europe that includes three or more destinations, by yourself? You could easily be on the line waiting for more than 2 hours.
What Will Be The Future Of Travel Agencies?
Don’t worry! The Travel Agency community are here to stay. Booking flights with a travel agent is still the best option we have today. They are the ones who are in it for love.
With international and state borders now open, Australia’s tourism industry is bouncing back with thousands of Australians eager to travel again. People are booking their holidays with their travel credits and our travel agents are in high demand. They are investing more and more time in ticket bookings. Once tickets are booked, they are going back into the booking system several times to make itinerary changes or checks on a ticket
So here’s the new norm… Booking your flight with a travel agent will include a service fee for them to work on a quote and plan your trip. This will be paid up-front and is usually deducted from your final cost.
While there is no industry standard rate for this work, you can expect to pay a fee of $50 to $500, depending on the travel agency, what they specialise in, and how much work is required.
Luxury travel specialists – FirstClass.com.au, are charging their clients from the 1st of July a service fee from $250pp to find the best first and business class flights that meet their clients requirements. For more information, please go to firstclass.com.au