The importance of service fees

Over the past few years, the Travel Industry Survey indicates, travel advisors have shied away from charging service fees.

In 2016, service fees accounted for 22% of total agency revenue, a number that dropped to 18% in 2018.

Among the different agency sizes tracked by the survey, the largest traditional agencies have always recorded the most significant revenue percentage from service fees.

Home-based agents are far less likely to charge service fees, but as with traditional agencies, those with the largest volume have a higher proportion of revenue from fees.

However, according to the survey, even the largest traditional agencies are shying away from service fees. In 2016, agencies with $10 million or more in sales indicated that 39.7% percent of revenue was from service fees. This year, that number fell to 30.2%. Among those with less than $1 million in sales, the number has fallen from a peak of 26.9% in 2012 to 17.3% in 2018.

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