Amadeus has commissioned an independent study on service fee
management in travel agencies in five European countries. The study,
conducted by Dr. Fried and Partner, a German consultancy, found that
agencies can increase service fee revenue and productivity by 28% and
67% respectively by automating the management of service fees.

The study compares agencies calculating fees manually with agencies
using an automated solution. Automating service fee management was found
to allow travel agencies to adopt more sophisticated fee schemes which
include a greater variety of transaction fees. The resulting increase in
service fee revenue can be as much as 28%.

 

Compared with agencies calculating fees manually, agencies using an
automated solution integrated into their selling application can, on
average, increase productivity by 67% for service fee application
activities and by 12% for the overall booking process. The productivity
gain can be achieved by using the time saved through automated fee
management to make more bookings.

 

Maximising service fee revenue is crucial as the travel agency business
model relies ever more on Service Fees as airline commissions disappear.
According to research published by Amadeus in July this year, 34% of
travel agencies see falling commissions as the biggest challenge their
business faces. Moving to a service fee-model is one of the key ways
travel agencies can prepare their business for the next phase in the
travel industry’s evolution. In Scandinavia, which is leading the way in
this trend, 73% of business travel agencies’ total revenue comes from
service and transaction fees. Notably, the average revenue/gross sales
margin among these agencies is higher than among agencies which have not
adopted the service fee model to the same extent. 

 

“Amadeus commissioned this study to help our customers as they move to
a service fee-based business model. Our close relationship with
thousands of travel agencies around the globe allows us to compare
trends in service fees and how they are managed by agencies,” says
Claude Giafferri, VP, Travel Office Products & Solutions, Amadeus, “We
are convinced that there are strong revenue opportunities to be
uncovered by travel agencies and this study demonstrates that automated
processes are a key enabler to making the most of the service fee
revenue opportunity.”
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