Travel Agents and Ancillaries: No Commission? No Problem!

Ancillary revenues are big business for airlines and cruise lines alike. Few airline optional services are bookable via the GDS or offer agent commission, and cruise line compensation on cruise fare add-ons has dwindled. Despite these impediments to travel agent booking, a new analysis by Phocuswright reveals a surprisingly high percentage of travel agents are not only booking various ancillaries, but they are booking them in equally surprising ways.

According to Travel Agents and Ancillaries: The Game Is On (a Global and Innovation Edition publication), a significant majority of both corporate agents and leisure retail agents have booked airline ancillary services over the past year, despite the fact that there are few bookable ancillary services via agents' preferred airfare booking method (the GDS), and there is no established compensation standard. And as several cruise lines have eliminated agent compensation on shore excursions and other add-on services, many agents are finding alternatives to cruise line add-ons to shore up their bottom lines.

"Despite little or no compensation and, in the case of most airline ancillaries, a less-than-optimal booking process, travel agents are delivering add-on travel services to their customers, and they are doing so in ways that may surprise both suppliers and providers of conventional agency booking methods," says Douglas Quinby, senior director, research at Phocuswright. "Compensation models and technology standards may be trying to catch up to the rapidly changing landscape of ancillary services, but travel agents aren't waiting around. They are finding a way, and often it's not a way that some in the distribution chain may like."

Travel Agents and Ancillaries: The Game Is On (US$350), examines the extent to which travel agents are booking ancillary services, the types of services they are booking, and the most common booking methods. The article covers a range of ancillary services sold by agents, including airline ancillaries, travel insurance, shore excursions and onboard activities for cruises, and hotel stay add-ons.

For an even more comprehensive look at key trends in the travel agency marketplace, check out Phocuswright's Travel Agency Distribution Landscape 2009-2013.