It’s only a matter of time until airlines in Australia follow those in the UK by cutting commission for Travel Agents, warned Travel Counsellors’ Chief Commercial Officer.
Speaking to Travel Agents in Cairns over the weekend, Kirsten Hughes, said that while some people may laugh it off or deem it highly unlikely, the truth is that airlines cut Agents commission in the UK almost a decade ago, and she believes that eventually, they’ll do the same in Australia.
She explained that as the internet makes it easier for carriers to communicate directly with consumers, they’ll eventually feel like less motivated to incentivise consultants to sell their product.
Image: Eva Darron/Unsplash
“When I first came to Australia, people laughed at me when I said airlines will stop paying commission but we don’t have commission in the UK and we haven’t for years.
Kirsten Hughes, Travel Counsellors Commercial Director
“I truly believe it will happen here too,” Hughes continued.
“As it gets easier to get to the customer direct – and they can get to them a lot easier than they could before the internet – if they can cut you out, they will.”
But it won’t stop at airlines.
Hughes revealed that certain tour operators have also started cutting commission in the UK, and this too could one day drip into the Australian market.
“In the last two years tour operators have also stopped paying commission,” she said.
So, what can Travel Agents do to ensure they’re financially covered if/or when airlines and tour operators cut commission?
Travel Counsellors’ Regional Managing Director, Kaylene Shuttlewood, told KARRYON that she’s worked in different markets where commission levels are always different and you learn to adapt.
Shuttlewood said she believes the bigger change for consultants to focus on is New Distribution Capability (NDC), which can help futureproof their business.
“We’re not competing with SingaporeAirlines.com or the OTAs, for us it’s a lot more person and having that relationship with that customer thoughout their journey and their whole life.”
Kaylene Shuttlewood, Travel Counsellors Managing Director
Hughes added that consultants should also focus on being in control of their margins before airlines or tour operators cut commission.
This can be achieved by taking advantage of in-group contracts, such as those Travel Counsellors secures within Phenix, or introducing ‘service fees’, whereby consultants charge customers for their time.
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