How to Reduce Travel Agent Transaction Fees

TMC’s earn their money by apportioning a fee for each travel transaction being processed through them. The fee covers expenditure and profit margin. The fee is levied per traveller and is dependent on the mode of travel and destination.

For example, if your business travel programme involves travelling by air to the Americas, Europe or within the UK, then you will have 3 different levels of transaction fee.

To compare pricing between different suppliers, don’t be fooled into comparing a transaction fee in isolation. I recommend you undertake some internal analysis. Create a list of your transactions broken down by area. Ask your current supplier for this information.

Use an Excel spreadsheet to aggregate totals and compare total costs. Use a full year of transaction data and multiple each TMC’s transaction fees, by the number of transactions for each mode of transportation or accommodation. The totals will give you an accurate assessment of future costs.

Travel Agent Transaction Fees

Remember, most fees can be reduced by over 50% if reservations are purchased using your suppliers self booking tool. Automation reduces the cost of salaried staff being involved. Salaries are the biggest cost of any travel supplier and are reflected in service fees.

Transaction fees cover the cost of;

1. A centralised payment and settlement credit scheme

2. Providing cost savings reports, purchasing data,

3. Traveller tracking to cover security and well being

4. Monitoring of service for quality and efficiency

5. Travel policy advice

6. Support on mandatory governance issues

7. Investment to cover improved systems

The above is a snapshot view of how transaction fees are apportioned. Undertaking the analyses and benchmarking can be time consuming, especially if managers are juggling other projects. If this sounds familiar, the Academy offers a programme that may be of interest.

We provide a cost review as part of our Health Check Report, focusing on transaction fees. We’ll give you an honest and accurate assessment of current charging, make comparisons against market rates and identify the amount of savings available.