| Journal: TWUK | Section: |
| Title: | Issue Date: 06/11/00 |
| Author: | Page Number: 8 |
| Copyright: Other |
Survey reveals some hard facts
PricewaterhouseCoopers undertook the 2000 Travel Agents’ Benchmarking Survey, which was sponsored by ABTA. Travel Weekly editor JeremySkidmore examines its contents
Service fees
The survey shows agents who have started charging service fees have seen their profit per employee fall (see front page). The average annual profit per employee among those charging fees is £2,636, while the average overall is £3,574.
PricewaterhouseCoopers partner Malcolm Preston said: “It’s a depressing picture. But of the agents who are underperforming, we don’t know how they would have done if they had not charged fees. They may have done worse.”
Service-fee expert Nolan Burris, who has been conducting service-fee seminars on behalf of British Airways, said:”I’m shocked by the result. Agents have to convince people they are providing a professional service to justify the fees.”
Staff pay
The survey shows the industry has failed to shake off its image of underpaying staff relative to their responsibilities and skills.
In leisure agencies, junior consultants are paid £8,000 or less; consultants are paid between £8,000 and £12,000; senior consultants are paid in the same bracket; most managers are paid between £12,000 and £16,000; while owners are paid £16,000 and over. Incredibly 2% of owners are paid £8,000 or less.
“The profile of owners remains relatively unchanged, with over three-quarters earning in excess of £16,000 and are generally the best paid,” said Preston.
“However, there has been a big drop in pay at manager level, 37% were paid over £16,000 in 1998 but only 21% were paid this figure in 2000.
“The picture on pay remains bleak.”
Corporate agents are generally better paid with 32% of consultants and 67% of managers earning £16,000 plus.
The survey shows a link between higher pay and higher turnover but Preston added:”It is unclear whether high pay creates increased turnover per employee or if it is higher turnover per employee which allows the agent to pay better wages.”
Training
Some 28% of respondents to the survey have no formal staff training strategy.
All organisations with more than 50 staff have a formal training plan and the 20 firms that spend the most per employee on training achieve a profit per employee 33% higher than the survey average. The average spend on training per employee has dropped since 1998 from £254 to £233.
“One explanation could be that, due to the pressures on margins from lower commission levels, agents are cutting training programmes to make up for the lost commissions,” said Preston.
“Or it could be that training programme costs have fallen, or that agents are taking more advantage of free programmes.”
Customer care
Surprisingly, those agents who receive between 91%-95% satisfaction rating perform worse on profit per employee than those that receive a rating below 90%.
“This shows agents are not benefiting from going the extra mile,” said Preston.
“There doesn’t seem to be much logic in that and it goes against conventional wisdom. So we can really only surmise there is no standard way of measuring consumer satisfaction – therefore the data provided by respondents may be inconsistent.”
Class of ’98
Overall there were 89 agents who took part in the survey in 1998 and this year – these retailers have fared worse than the survey averages and experienced a decline in profit during the period. For the ‘class of ’98’, turnover per employee over the past two years has risen from £273,000 to £284,000 but profit per employee is down 7.6% from £4,104 to £3,303 – the profit margin has slumped from 1.53% to 1%.
“Clearly, commission cutting and capping is eating into margins,” said Preston.
“They’ve got a higher turnover but less profit, which basically means they are having to work harder for less money.”
Sunny outlook? The figures show that turnover is higher yet overall profits are down
Sunny outlook? The figures show that turnover is higher yet overall profits are down
Analysis
The percentage of staff at each level in each pay band