1: Find the costs involved.
To calculate transaction fees, agents should divide their annual costs by the number of tickets they issue.
Agents also need to take into account the cost of providing additional services, such as visa applications, time-consuming rail reservations etc. For unbundled fees, agents must break each ticket down into fractions based on the time spent on each unbundled step.
To calculate hourly fees, agents must divide annual costs by the number of traveller counsellor hours per year which are allocated or dedicated to the client.
Usually agents will find that their simple cost per ticket is also their cost per hour.
2. Talk to the clients.
Agents need to sit down with clients face to face to explain how changes in the marketplace have led to the need for the introduction of management fee.
3. Test the market.
Agents are advised to initially try a 10% profit element on top of their transaction cost or hourly cost. If the traffic bears 10%, they should try a 15% or 20% mark-up.
By knowing their market, agents will be able to achieve a realistic profit.
4. Put the agreement in writing.
It is important for agents to get their fee-based pricing understood by their commercial clients.
Put the agreement in writing to avoid future problems.
Beverley Fearis