Galileo has produced a White Paper to assist travel agents in Asia who are yet to face a zero commission environment. Entitled “Moving to a Service Fee Based Model,” the guide aims to assist travel agents in the region cope with the evolving airline trend towards eliminating commissions. It draws on the experience of agents in Singapore, Australia and New Zealand who have taken advantage of other revenue opportunities.
Mr. George Harb, Galileo’s Marketing Director Asia Pacific, commented, “The steady trend for airlines to eliminate commissions market by market will continue unabated. Galileo believes it has a fundamental responsibility to help customers adapt to change in a way that not only ensures their continued viability, but helps them achieve even greater revenue growth.”
He continued, “By talking with agents who have coped in a reduced commission environment, we have identified steps which not only include the charging of service fees, but also the re-education of staff to provide professional services which can be clearly identified by the customers as adding real value.”
Findings show that Singapore’s travel agents were among the first in Asia to experience the impact of commission cuts. In late 1999, Singapore Airlines followed the lead of North American and European carriers by removing commissions on all published fares - effectively introducing a zero commission policy. The overall experience of the Singapore market showed that by introducing service fees, broadening focus and empowering staff, travel agents could adapt and flourish in a zero commission environment.
Galileo’s “Moving to a Service Fee Based Model” provides guidelines on how these fees can be implemented, justified and communicated to customers with case studies demonstrating ways in which agents have not only survived zero commissions in other parts of Asia Pacific, but have thrived once they mastered the art of adding true value through customer service.
The White Paper identifies types of fees agents could typically charge such as “change fees” in association with ticket or itinerary alterations, the collection of additional funds for fare increases or airline penalties and consulting fees for complex itineraries. It also outlines another revenue generator - occupying a niche, and specializing in areas such as specific travel destinations, market segments or ethnic groups where an agent may find it easier to demonstrate the value in knowledge and expertise.
Galileo’s ‘Moving to a Service Fee Based Model” is the latest in a series of publications issued over the years to help bring increased efficiencies to the travel industry in Asia Pacific.