Automated service fee boosts revenue
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The study, conducted by Dr. Fried and Partner, a German consultancy compared travel agencies in five European countries.
It compared 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 that include a greater variety of transaction fees.
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 is then achieved by using the time saved through automated fee management to make more bookings.
Maximising service fee revenue is crucial as changes in 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 that have not adopted the service fee model to the same extent.
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