How are travel agency compensation models evolving?

JAVIER ZUAZOLA, GERENTE DE TRAVEL ADVISORS GUILD (TAG).

 

The most widespread model of remuneration in the corporate travel agency, as a general rule, continues to be the transaction fee, i.e. a fee per transaction. In its favor we can say that it is a more or less transparent way of acting,  although it should be pointed out that it is necessary to clarify the concepts well  and, in any case, this pattern also has its clear weaknesses, since we are including in the same operation situations that in many occasions do not have the same peculiarities.

While there are organizations and agencies that practically perform a merely transactional action, i.e., booking and issuance of documentation for everything related to the trip (either by SBT or via call centers), there are many others that require much greater added value, such as advice and support for the traveler;In short, some functions of a consultant that help the fulfillment of the individualized travel policy of each company with the final objective of rationalizing to the maximum its costs, and it does not seem logical to include everything under the same parameters.

On the other hand, in the MICE segment (groups and events) the management fee is usually the most common way to collaborate.

Much less widespread, there are certain corporate agencies that propose to their client companies a remuneration system based on the sharing of the savings generated by their corporate travel, i.e. shared savings, combined with a fixed management fee.

This option usually clashes with the interest of finance and purchasing departments, which usually have to budget for this type of expense and almost always feel more comfortable with more closed formulas, such as the transaction fee.