Page 249 - Tourism The International Business

11. Travel distribution systems

Income from the cruise lines comprises, on average, 16 per cent of travel agency income, and travel agents book
95 per cent of all cruises sold in the United States.
Commissions from hotels account for 11 per cent of agency income. Agents are responsible for 25 per cent of

domestic and 85 per cent of international sales to hotels.
Car rental business accounts for 8 per cent of US travel agency business, and approximately half of all car rental
sales are made through travel agents.
Rail travel accounts for only 3 per cent of agency business nationwide. Just over one-third of rail ticket sales are
made by retailers.
Commissions from package tours can run from 11 to 22 per cent. Retail travel agents account for 90 per cent of
all package tour sales.

Other income sources. Two additional sources of income for agencies are service charges and sales of travel-
related products and services.
Over the past few years there has been some discussion among agents about levying a charge for services
rendered to travelers. The argument is made that a “travel counselor”, in giving professional advice, should charge
for that advice. Such a move, some feel, would help professionalize the industry. This argument has received some
backing because low air fares have reduced the dollar amount of commission received. However, the public is not
yet ready to pay for an agent making a reservation, but some agencies do charge for drawing up complicated
itineraries and making trip cancellations.

Exhibit 94: Tudor Towers, Roturua, New Zealand. Travel agents
make commissions from hotels and other suppliers. (Courtesy New
Zealand Tourist & Publicity Office.)

There are travel-related services that some full-service agencies provide to increase their income. These include
such things as personal, baggage and trip cancellation insurance, providing travelers checks and foreign currency,
and taking passport photos.

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