Since 1999, the percentage of agencies that collect any type of service fee has increased steadily and has now plateaued in the mid-90 percent range, a new 2007 Service Fee Report released by the American Society of Travel Agents (ASTA) says.
A key finding of the survey is the continued expansion of service fees collected beyond just those for air bookings. Half of the respondents now have service fees for hotel, rental car, trip planning and rail tickets. Just three years ago, less than one-third of agencies charged service fees for any of these segments, according to the report.
"As ASTA's research shows, there is pressure on all sides to cut costs and increase revenue whether you're talking about travel agencies or suppliers," said ASTA President and CEO Chris Russo. "Changes in market forces, for example, have caused many travel agencies not only to increase the amount they charge in service fees, but additionally to widen the number of services for which they are charging these fees."
ASTA noted that the new report is the only one of its kind as it looks at service fee changes by travel segment, changes in agent compensation, internal service fee processes, and service fee collections from an agency point of view.
Among the findings:
* 20.7 percent of agencies reported increasing their service fees for air travel in 2007.
* Rail bookings, trip planning and hotel and car rental packages are the non-air travel services most likely to have fees.
* 10.7 percent of agencies derive at least 50 percent of their income from service fees.
* 44.4 percent of respondents expect to make changes in their service fees in 2008.
* 35.4 percent of those planning to make changes will be adding additional fees.
* About half of the responding agencies selected "Charge no fee; work solely on commissions paid by vendors" as the best revenue model for leisure travel services.
* More than 60 percent of agencies are charging trip planning and consulting fees.
The ASTA Research Family is comprised of a representative sample of ASTA member travel agency owners and managers. The report indicates a 95 percentage confidence with an error rate +/- 5.1 percentage, ASTA says.
ASTA Premium Members will receive the full report for free and travel agent members will receive a free two-page summary, but can also purchase the entire report for $350. The cost for ASTA member suppliers is $550 and $750 for non-members.