The Midcounties Co-operative is to trial a £25 service fee to customers booking holidays in its network of shops.
From December 1, the group’s 57 high street shops will apply the fee on all overseas bookings in a month-long trial.
The £25 fee will appear as a separate “transparent” charge. It will cover the cost of the extra administrative work agents do, such as checking clients in online, filling out Air Passenger Information for airlines and printing itineraries.
Agents will earn an extra £5 every time they charge the fee.
If levied permanently, the fees are predicted to generate about £1 million in extra profit a year for Midcounties Co-operative.
Alistair Rowland, general manager of the travel division, said the retailer had no option other than to introduce a service fee because commission earnings were no longer enough to sustain the costs of a retail operation.
He said: “The model needs reinventing and frankly, the cost of operating is no longer offset by average commissions in retail. To stay profitable in the long term, you can either strip costs out or add a fee structure.”
He admitted the move would involve a “mindset” change for the group’s travel consultants but claimed customers would pay “if they have a good experience”.
He added: “We will lose some customers, but at £25 we are not talking about a lot
of money.”
Natalie Turner (pictured), Midcounties’ head of branches, added: “Our costs have increased because of the extra time it takes to fully service our customers. Although some colleagues may struggle to start with, I think they will understand the reason and the majority will embrace it.”
Margins in Midcounties’ shops are expected to reach 10.4% per booking this year.