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Travel Agents Protest Commission Cuts By Handing Out Vouchers

Travel agents protest airline commission cuts by offering vouchers to customers.
The dot-com fallout will hit airports nationwide Thursday as travel agents take on the airlines, following a major commission cut revealed last week.

From 1:00 p.m. to 3:00 p.m. EST, travel agents will be protesting the cuts by handing out to travelers at airports $30 vouchers, which can be used to book tours and cruises but not airline flights. The $30 represents the difference in commission that travel agents will receive under the airlines' new policy, which sets the maximum payment at just $20 for round-trip airline tickets, down from $50. The point, says Terryl Lofgren, president of World Wide Adventures & Photo Journeys of Denver, is to emphasize that agents provide a broad range of services beyond issuing tickets, including "knowledge, experience, and peace of mind."

That may well be true, but the airlines argue that with their bread-and-butter high-end business customers pulling back on travel spending--and their financials in the red--they have little choice but to cut costs wherever possible. Delta Air Lines estimates that it saves $15 to $25 per ticket when customers buy direct, for example, and it hopes to push 20% of its total revenue through Internet sales this year.

The airlines have taken a slow-but-steady approach to cutting commissions, trying not to alienate their existing distribution channel as they grow their Web business. A series of commission cuts has brought the figure down from a flat 10% three years ago and given agents time to come up with alternatives. Many agencies, and almost all agencies that sell business-to-business, now charge customers a fee for their services.