ASTA’s latest research study, the 2009 Travel Agency Service Fee Report, found that 41 percent of responding agencies are charging consultation fees for some type of custom travel,
and a much smaller percentage is also charging fees for information given over the phone (12%) or in an e-mail (17%).
“Most agencies, today, realize the value of their business expertise and the services they provide and have begun to expand their service fees in terms of the amounts charged and the number of services to which they apply. Even so, there are still agencies who are looking to supplier commissions for a significant portion of their revenue. Given the increasing market pressure on suppliers to reduce costs, it’s imperative that agencies review their revenue sources thoroughly and make sure they are not overly dependent on one revenue source,” said Chris Russo, ASTA president and chair. “This report can assist those agencies in benchmarking their revenue sources to ensure they are remaining competitive.”
This 39-page report covers average service fees for air, cruise, tours, car, hotel, rail and other bookings. It also examines fees for other services, such as visa application assistance. Included in the report is revenue from service fees as a percent of total revenue, consumer attitudes toward fees, and the percentage of agencies that also have consultation fees.
Among the survey’s findings were:
* The percentage of agencies that collect services fees has increased steadily between 1998 and 2005. From 2006 on, the percentage has fluctuated, and in 2009 it was 91 percent.
* Although the average service fee for air bookings decreased by a small amount in 2009 (a $2 decrease), for other types of travel bookings, the fees stayed the same or continued to increase.
* The average fees for domestic and international air bookings have plateaued in the upper $30’s range.
* The average fees for non-air travel have increased over time with the exception of “Car only” and “Hotel only,” as these areas are the booking categories that clients most dislike paying service fees according to responding agencies.
* After increasing steeply between 2002 and 2004, the percentage of total revenue derived from service fees has stayed in the 17 percent to 20 percent range.
* Forty-one percent of responding agencies charge consultation fees for some type of custom travel. A much smaller percentage also charges fees for information given over the phone or in an e-mail.
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%.