The introduction of service fees by travel agencies: A case study in Bloemfontein

Abstract

Travel agencies normally receive commission from airlines, tour operators, accommodation establishments and car hire companies in exchange for bookings. Global trends in this commission structure indicate dramatic changes, especially regarding airlines. The majority of them have introduced a system of commission capping, whereby commission paid to travel agencies has been reduced and expectations are that it might even become zero in future. Against this background, travel agencies are considering introducing a system of service fees. It implies that clients will have to pay for services such as the preparation of quotations for national and/or international holidays or business trips. This paper discusses the results of research that was undertaken amongst the middle to higher income classes of the residents of Bloemfontein regarding the introduction of service fees by travel agencies.