WASHINGTON -- Average ARC commission rates continued to sink in
January, and the number of travel agency closures reached an
all-time monthly high.
Meanwhile, agents' sales volume was typically lackluster for
January, but the best ever for any first month of the year. ARC
reported that the average domestic point-of-sale commission slipped
to 4.47% in January, more than two points below 6.71% in January
1999.
The rate was down a notch from 4.59% last December and 4.50%
last November, the first full months of the latest cuts. The
average ARC international point-of-sale commission was the lowest
since February 1986, although it is not considered a good indicator
of retail earnings because it is inflated by consolidators.
The international figure was 10.85% this January, nearly two
points under the 12.77% rate in January 1999. Meanwhile, ARC
finalized a record 349 voluntary deletions of full-service firms as
agencies rushed to initiate their mergers or bailouts by the end of
1999.
The previous monthly record was last December, with 298
voluntary deletions. Of the total this January, 199 voluntary
deletions were home or single-location agencies and 150 were
branches.
The sales volume for the month was nearly $5.4 billion, the best
for any January and 2% over January 1999. But because January is a
comparatively slow month, the volume this January was far below the
average $6.4 billion per month last year.
Domestic fares (sales minus taxes) exceeded $3.4 billion (up 1%
over January 1999), and international fares were nearly $1.5
billion (up 5%). Taxes and fees amounted to $470 million (up
3%).
Although domestic fares rose 1%, domestic commission dollars
plummeted 32% to $153 million.
On the international side, commission dollars dropped 11% to
$162 million, even though fares rose 5%.
The average agency location posted sales of $30,216 a week, up
from $27,678 in January 1999 but below the average $32,355 during
calendar 1999.
The figures represent sales by 31,915 full-service agencies and
10,950 satellite ticket printer sites on behalf of 142 airlines,
three railroads and a handful of other diverse suppliers.
Commission figures reflect amounts taken on ARC sales reports and
exclude any overrides paid by suppliers directly to agents.
Other January highlights follow:
Electronic ticketing accounted for 46.15% of agency
transactions, up from 32.86% in January a year ago.ARC said 18,191 agency locations, or 42.4%, were reporting
their sales electronically, representing 55.7% of the transaction
volume and continuing an upward trend.