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Articles
Stop Whinging about Commission Cuts
Written by Adrian Caruso, CEO/Master Business Coach of TA Fastrack
I write in reference to 'Hit to agents' back pocket' in
the October 27 issue.
It's time for agents to stop whinging about commission cuts and change
the way they do things if they want to survive. I know for a fact that
travel agents in Australia are in for more commission cuts from land-based
operators and even more airlines soon. Just take a look at what happened
in the travel market in the US, UK and even our closest neighbour New
Zealand many years ago. They have all been operating with zero commissions
from land-based operators for over 10 years. So, it is going to happen
here. It's just a matter of when. The recent cuts by Trafalgar Tours,
Insight Vacations and Globus are just a few of the land-based suppliers
to cut commissions. There are rumours that hotels (who already offer better
deals direct to consumers and agents over the Internet at zero commissions
to agents in most cases) are next. Car rental companies will soon follow
and cut commissions.
Therefore travel agents have to start changing the way they market themselves,
position themselves differently in the market (focusing on a niche is
the most profitable strategy) and present their clients' trip pricing
differently (as a total cost - never itemised). We at TA Fastrack have
for quite some time recommended travel agents we provide our travel agents
business coaching program to, to encourage their travel consultants to
net everything down and mark up 14-15 per cent according to what target
yield you wish to make (I feel travel agents need to be achieving a 14-15
per cent yield to be successful). By doing this, consultants will find
it much easier (and save lots of time) than working out how much commission
they are making on each component of a client's trip. This is because
each component pays different commissions.
We strongly recommend that travel agents use this method
of netting the whole trip down to what they have to pa the suppliers and
mark up accordingly. This will always ensure that the agent makes their
target yield on each booking, and it avoids confusion.
tell
us what you think
We offer this article on a nonexclusive basis. You may reprint or repost this material as long as Adrian Caruso's name and contact information is included.
email, 07 3630 1298, http://www.tafastrack.com
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