SERVICE fees, staff incentives and dealing with fewer operators are likely to lead to increased profit for travel agents, a leading industry survey told delegates at the ARTACconference in Jersey.
The research, carried out by analysts PricewaterhouseCoopers, revealed that travel agents charging service fees saw each employee make ú4,773 profit for their company compared to ú3,905 for agents who don’t charge.
Similarly, those retailers whose staff can earn more than 10% of their salary in incentives recorded a profit per employee of ú5,069, 30% above the average.
The figures emerged from exhaustive research in which 237 ABTA agents were quizzed. It followed a previous survey conducted in 1996.
For ARTAC agents, the results were even more encouraging, according to PricewaterhouseCoopers partner Malcolm Preston. He told delegates that ARTAC members who charge fees – about 23% of the consortium – witnessed their profit soar to ú7,673 from the consortium average of ú4,455.
“The fear that fees drive customers away was also not realised,” said Preston. “There was no change in repeat business which stood at 60%.”
Preston urged agents to take serious note of the survey and to act on it.
“Don’t be in denial and say this does not affect you because it does,” he said. “If you don’t do anything to develop your business you will go backwards.”
ARTAC agents offering incentives of more than 10% fared even better with profits per employee leaping to to a strong ú7,000.
However, the survey revealed that while agents dealing with fewer than 50 operators saw profits rise, ARTAC members recorded a fall.
ARTAC’s average profit per employee – ú4,455 – was 27% ahead on the last survey in 1996, with turnover per branch up 14% to ú1.3m.
However, figures revealed turnover per employee was ú20,000 below the industry average of ú248,000.
“Against a backdrop of direct sell you have progressed quicker than the rest of the pack,” said Preston.
A study of Thomas Cook shops showed the multiple profit per employee at ú5,180 and turnover per branch at ú2.6m.