Tourism boom sending travel agents bust: IBISWorld

Strategic business information provider IBISWorld recently revealed
travel agencies' fight for survival.

"Despite more Aussies than ever holidaying abroad, times are tough in
the travel industry. While higher disposable incomes and less vacation
time generally mean more of us are holidaying overseas, even for short
breaks, direct booking through the internet means that less and less of
us are booking those holidays through travel agents. To add to agents'
woes, the reduction in commissions on sales by airlines to agents in
recent years has taken away what was once bread and butter for agencies.
Many airlines now pay no commission at all to agents, while those who do
pay a miniscule one per cent. This change has slashed growth in recent
years, with revenue for the Travel Agency industry growing at just 1 per
cent per annum," IBISWorld said.

IBISWorld general manger Australia Jason Baker said that travel agencies
operate in one of the least protected and most competitive industries in
the world, as they're so easily impacted by factors including growth (or
not) in real household disposable income, leisure time availability,
exchange rate fluctuations and global political and economic turmoil.

However, the company added that there are still some high commission
areas left for travel agencies to target, including up to 40 per cent on
travel insurance, 10 to 15 per cent on car hire, 20 per cent on
cruising, 12 per cent or more on wholesale packages, and 15 to 20 per
cent on accommodation bookings.

"Increasingly, agents will have to levy service fees on clients, with
some larger operators already doing so through modified global booking
and reservation systems," said Baker.

"At a minimum, agencies will introduce fees in areas such as amendments,
cancellations, credit card transactions and re-confirmations. When
service fees, rather than commissions, become the norm - which will
happen eventually - the industry's outlook will improve," added Baker.