Lower Fares Set The Stage For New Fees Hard-Pressed Travel Agencies May Start Charging To Book Flights

Lower airline ticket prices have travel agencies around the country considering charging fees for booking flights and other services that historically have been performed at no charge.

American Express Co., with one of the nation’s largest travel agency networks, recently began charging fees at some of its locations throughout the country.

Small and independent travel agencies may follow suit, said Sharon Miller, coowner of Canterbury Travel in Winter Park, Fla.

“It’s a matter of economic survival. We can’t afford to work at a loss,” Miller said.

Other travel agents are resigned to living with lower profit margins, saying they’ll lose too much business if they charge fees.

In the competitive Spokane market, travel agencies can’t afford to charge fees, said Judy Ritter, owner of South Hill Travel in Spokane. “I’ve never, ever charged a fee and frankly don’t know anyone else around here who does.”

Since cheaper tickets mean lower margins for travel agencies, the key is to increase the number of tickets sold, said Karen Jacoy of Jacoy’s Travel Emporium in Spokane.

Jacoy predicted that some local agencies will not survive in the new world of discount air fares. “You’ve just got to work twice as hard.”

Currently, travel agencies get a small cut of the ticket price from the airline.

Travel agencies probably will go to a “professional service fee” in the near future, said Rosemary Cantanese, vice president of Bryan’s Travel in Orlando, Fla.

“We’re the only industry I know of that has not incorporated the cost of doing business into our pricing,” Cantanese said.

Airline tickets, the bread and butter product for most agencies, have dropped in price to the point that in many cases agencies lose money when they sell a ticket, travel agents say.

The amount of money that agencies are reimbursed by airlines has declined proportionally as ticket prices have fallen. Travelers also change their plans more frequently these days to take advantage of better ticket deals, and that takes more time for agents in revalidating tickets, Cantanese said.

“Sometimes we see the same client two or three times,” she said.

But travel agencies are reluctant to be among the first,to set fees of their own. Those who do not set fees may use that as part of their advertising strategy to increase market share.

“I’m hoping the American Society of Travel Agents will hire some public relations specialists and get the message out about the need for this,” Cantanese said.

“We need to go about this the right way, with an educational process, and we won’t meet resistance. We work a lot of hours to secure the lowest fares and best rates. We work harder these days for less money, and I just feel that our customers would understand and accept that.”

Another factor adding to the financial fears for travel agents is a trend toward ticketless airline travel. Travelers make reservations through an agent or an airline by phone or in person and merely pick up a boarding pass at the airline gate after showing proper identification.

Southwest Airlines, for example, recently started offering ticketless travel in Spokane and other cities it serves.

“It’s a big cost saving for airlines, but it’s less revenue for travel agencies,” Miller said, because people may be more inclined to bypass travel agents and go straight to the airline gate since they wouldn’t need a ticket.

The one factor that may help improve the financial picture for travel agencies - as well as airlines - Miller said, is the strong possibility that ticket prices will begin a gradual rise. No-frill carriers, she said, are beginning to face higher costs, and that means they will need to generate more revenue.

“It looks like competition will lessen a little sooner than people expected,” Miller said.