WASHINGTON -- Travel agents sold a record $76.6 billion through ARC
in 1999, up about 4% compared with 1998, despite a plunge in the
average domestic commission rate to 4.87% for the last quarter and
6.06% for the year.
Looking at ARC's raw year-end statistics, perhaps the item that
best encapsulates the trend of 1999 is that domestic fares rose 3%
in December but domestic commissions sank 29%.
During a year of ups and downs, sales increased steadily each
month, with the unsurprising exception of notoriously slow
January.
The average point-of-sale domestic commission slipped a tad
every month until it reached 6.17% in September. Then in early
October United led the majors in cutting base pay from 8% to 5%,
still capped.
After that, the average domestic rate dropped precipitously. In
December it was 4.59%, inexplicably a fraction above November's low
of 4.50%.
At the end of the year, agents had written a record $48.0
billion in domestic fares, up about 5% over 1998.
At the same time, domestic commissions were down 6% at $2.9
billion. Last year domestic fares accounted for 68.4% of all fares,
while domestic commissions accounted for 50.7% of all
commissions.
On the international side, agents sold a record $22.2 billion in
fares, up about 2%. International commissions were down 8% at $2.8
billion, because the average point-of-sale commission rate slid
from 14.17% to 12.73%.
ARC's average international commission level, also cut to a 5%
base in early October, is considered atypical of retailers because
it is inflated by consolidators. All commission figures reflect
amounts taken on ARC sales reports and exclude overrides paid
directly by suppliers to agents.