As cash-strapped airlines cut commissions on tickets and travellers prefer the ease of booking tickets online, many travel agents are convinced their occupation is a “dying trade”. With business and margins shrinking, many are diversifying into allied segments such as hotel and taxi bookings, and travel packages.

“In the past one decade, margins have shrunk 3% from 9%. Also, a number of newer booking avenues have opened up. The situation is bad and if this continues, we could see many agents shutting shop,” said Iqbal Mulla, president, Travel Agents Association of India (TAAI).

In fact, while domestic airlines are offering a 3% commission on the basic fare, commissions on foreign flights have almost dried up. Most foreign carriers do not offer any commission to these agents, except a few carriers from the Middle-East.

This has forced the agents to ensure margins out of the 3% commission and service charges from customers. Most travel agents said customers are also not willing to pay higher service charges as per a report in DNA by Amritha Pillay.

What’s more, cost-cutting airlines have also stopped fringe benefits such as sending calendars and hosting parties for agents, said a Jaipur-based travel agent.

All this has made standalone air-ticketing business unviable. “Travel trade as far as ticketing is concerned is a dying trade. I don’t see a next generation of standalone air-ticket travel agents,” said Ramesh Bhatia, an agent from Jalandhar who solely sells air tickets. Bhatia is looking to gradually diversify into other travel segments and believes others of his ilk will follow suit, sooner or later.

Manoj Sogani, managing director, BCS Tours and Travels from Jaipur, has in fact made the switch already. “I diversified into hotel booking, taxi booking and other packages five to seven years back,” he said.

One of the main issues discussed at at a recent meeting held by TAAI was of airlines planning to reduce credit window for agents to a week from the current 15 days from June.

“We will request airlines to extend the fortnightly credit facility even after June. Almost 80% of the agents believe it would be difficult to continue air ticketing if the facility is reduced to a week,” said Mulla.

Travel agents say the reduction in commissions is ironical as about 80-85% bookings are still done through agents.

(You need to login first to read complete news).
New User? Register for FREE!
» Back to Travel News