ALEXANDRIA, Va. -- Companies hurt by the international commission
caps should try to renegotiate existing airline agreements, move to
establish triple net fare agreements and tighten travel policies
that emphasize more economy class travel, a report issued by the
Association of Corporate Travel Executives said.
ACTE recommended the moves in a new on-line guide to the
international caps. The guide provides members with a soup-to-nuts
primer on how to survive in an increasingly commissionless
The password-protected site, called the International Commission
Cap: A Comprehensive Guide to Managing the Change, gives members
background on the caps, a step-by-step action plan, spreadsheets to
help members calculate the impact of the caps and a
The report also provides a comprehensive background and overview
on airline commission policies and suggests alternative strategies
for travel managers to consider. Suggestions include:Employing "best practices" that will help lower the cost of
processing travel arrangements and maximize a company's leverage.
These include consolidating travel with as few agencies as
possible, preferably one; consolidating to a single corporate
charge card to gather comprehensive expense data; establishing
preferred suppliers for air, hotel and car, and providing
alternatives for booking travel, such as the phone, e-mail and
self-booking.Renegotiating deals with existing carriers or driving business
to carriers that have not matched the caps.Booking more tickets in economy class and negotiating upgrades
from the preferred airline.Assessing triple net fares, in which commissions and overrides
are deducted from published rates to get a discounted air
fare.Negotiating "unbundled" fees with agencies. These fees would be
stripped down for self-booking or e-tickets as opposed to a paper
ticket booked through a live agent.
ACTE president Earl Foster said the site, developed by South
Elgin, Ill.-based consultant R.D. Brown Co., is part of a growing
effort to educate members through the Internet.
"This whole thing on the commission caps is something lots of
travel managers have been sticking their heads in the sand about,"
said Foster. "When we go out and do hot topic tours, the same
information doesn't get to everybody."
R.D. Brown president Ralph Brown said the site will help
companies understand how the caps impact their bottom line.
"[Its] purpose is as an information source," he said. "If there
are people who didn't quite understand the ramifications of the
commission caps, this will help them."
ACTE last year announced plans to develop more interactive
educational programs for members. There have been concerns that
ACTE's membership is growing so fast that it can't adequately
educate members: ACTE's membership grew from about 1,800 members in
1997 to about 2,300 members now.
Foster said many travel managers were still on management-fee or
revenue-sharing arrangements with their agencies when the
international caps were announced.
"[Travel managers] always had that check coming in the door," he
said. "There was a comfort level."
Foster said travel managers need to realize that commissions are
going to disappear, and companies will need to start writing checks
to their agencies. Brown is organizing forums for New York, Los
Angeles, Atlanta and Chicago.
The sessions are scheduled for February and March.
The site can be reached at www.acte.org and clicking on the
International Commission Cap hot link.
The ACTE member's username and password must be entered to
access the site.