WASHINGTON -- The Airlines Reporting Corp. said it sends overage
payments to nearly half of all travel agency locations after their
weekly sales reports are processed.
In 1994, ARC said one-sixth of all locations were getting
overages each week, the most recent figure available for
comparison.
Last month, in response to a Travel Weekly inquiry, ARC studied
the most recent 13 weeks and found that 44% of agents' sales
reports resulted in overage payments, whereas 56% resulted in
remittances paid by agents to ARC. Because the main reason that ARC
owes agents money is to pay commissions on credit card sales, the
increasing frequency of overages is not surprising in light of the
growing popularity of plastic.
Credit card transactions have risen from 74.5% of all agency
sales in 1994 to 80% today. ARC president David Collins has
predicted that as credit card transactions become more prevalent,
agents will want to go on a daily remitting schedule in order to
get their overages from ARC every day instead of once a week. The
amount of money is substantial, as agents now earn around $100
million in credit card commissions each week.
However, ARC's study revealed an extremely wide disparity in the
frequency of overages at corporate- and leisure-oriented agencies.
This indicates that any industrywide appetite for daily remitting
could take years to develop, assuming airline commissions still
exist in some shape or form.
ARC found that 83% of the sales reports for satellite ticket
printer locations had overages. The percentage is high because
these sites serve corporate accounts, which heavily favor use of
credit cards.
At full-service branch locations, including corporate on-site
branches, 49% of sales reports had overages. The percentage dropped
dramatically for agency locations that tend to have a greater mix
of cash-paying leisure business.