Steve Bloom /The Olympian
Carolyn Elder of Washington Travel Service is one of many travel agents who must cope not only with fallout from the Sept. 11 attacks, but with airline companies that have cut or eliminated commissions along with reducing ticket costs.

Destination unknown

Local travel agents feel pinch from online sales, commission cutbacks

SCOTT WYLAND THE OLYMPIAN

SOUTH SOUND -- Cathy Hawkins has braved plenty of turbulence in the 23 years she has owned a travel agency.

Now she has hit perhaps her rockiest bump.

A half-dozen major airlines have announced they will eliminate agents' commissions, leaving Hawkins and other agents to question their future.

"We're all just trying to adjust to this new world we're in," said Hawkins, owner of Tumwater Travel Service. "I think it's having a tremendous effect on local agents. It is kind of grim for the travel business at this time."

Continental, United, American and Northwest airlines, as well as American Trans Air and Delta Air Lines plan to slash commissions. Alaska, Horizon and Southwest might soon follow.

The major carriers had reduced commissions six times since 1995.

Buying tickets online

Airlines are encouraging customers to buy tickets at the companies' Web sites rather than through agents, in an effort to trim costs. Distributing tickets is the fourth largest expense for carriers after labor, fuel and aircraft, according to the Air Transport Association, an industry trade group.

Agents will have to raise their fees to make up for the lost commission, said Hawk-ins, who expects to bump up her per-ticket fee to $25 from the $15 she now charges.

"The airlines are basically firing all the travel agents," said Mike Skinner, owner of Washington Travel Service. "It's like they're trying to weed out all the competition totally."

In December, Skinner bought Washington Travel from Leslie Aschenbrenner, whose ticket sales plunged 75 percent after the Sept. 11 attacks.

"It hasn't been a real smooth ride," Skinner said of the past six months.

United and Northwest representatives declined to discuss the reasons for ending commissions.

Alaska rethinking

Alaska Airlines, based in Seattle, is still paying agents, though it has begun to rethink that stance because of falling profits, said Jack Walsh, a company spokesman.

"The travel agent is very important to us," Walsh said. "On the other hand, it's a very challenging economic time. We're still losing money every day."

Although Alaska is boarding more passengers than a year ago, fares have dropped since Sept. 11, Walsh said.

"The airline industry is a very thin (profit) margin business, particularly in the last year," he said.

A few carriers say they will pay bonuses to agencies that reach a certain sales target.

But Hawkins said she would be surprised if any South Sound agency could generate the sales volume needed to cash in on these rewards.

"Incentives have always been paid to the bigger companies that are making mega-dollars for them," Hawkins said.

Local traveler

Helena Meyer-Knapp, an Olympia resident and native of England, said she would hate to see agents squeezed out.

She and her family members book more than 30 round-trip flights a year -- and an agent has the expertise needed to handle these complex travel arrangements, she said.

"That's an enormous amount of expertise," said Meyer-Knapp, a long-time client of Hawkins. "She's not just getting commission, she's doing something for it."

Donna Gates, owner of Shelton Travel Inc., said the loss of commission bodes ill for many agents.

"This year, we will see a record number of agencies going under," Gates said

Closing doors

Many agents struggled -- and some closed their doors -- in the last quarter of 2001 after the Sept. 11 attacks slowed air travel, Gates said.

The federal government bailed out airlines with a $15 billion package while it gave travel agents nothing, she said.

Now, as agents fight to recover, airlines are trying to "give us a nudge into the abyss," Gates said. "We're just starting to fill the planes again -- and this happens."

Gates said she will probably raise her per-ticket fee to $20 from the current $13.

She's unsure how high she could jack up ticket prices, she said. "There's a limit to what people will pay."

Being in Shelton, a rural area with a depressed economy, she can't charge as much as agents do in Olympia and Tacoma, she said.

If Shelton's local travel agencies were to close, many residents there would be put in a bind because they don't own computers and thus can't order tickets online, Gates said.

Travelers would have to buy tickets directly from the carriers over the phone -- which raises another point, Gates said.

If travel agents are driven out of business, consumers will have no one to whom they can turn for unbiased help in finding the best deals, Gates said.

"You certainly aren't going to have Delta telling you that American has a lower fare," Gates said.

Travelers also would be without an advocate who can resolve booking problems or pricing errors, said Carolyn Elder, manager at Washington Travel Service.

And people who buy tickets online often have no recourse if they misstep, Elder said. Once a ticket is paid for, customers usually can't revise or undo the purchase at the Web site.

For instance, one customer booked himself on a flight that he thought would take him to Melbourne, Australia, Elder said. The flight turned out to be going to Melbourne, Fla., and the man was stuck with the ticket.

Right now, airlines are trying to create the perception that travel agents are extraneous, Hawkins said. "That you're paying for nothing."

If travel agents are to survive, they will have to work harder to advertise the problem-solving services they provide, Skinner said.

Agents must also diversify, Gates said. "We have to look to tours and packages and cruises to try to bolster the bottom line."

Federal law prevents agents from boycotting an airline, Gates said. And agents have been too fragmented to unify into an effective bargaining force.

Meyer-Knapp, the traveler, said she has found the airlines' customer service representatives polite but less-than-helpful in solving problems. She recently called United to fix a mix-up in ticketing, and an employee acted as though she were trying to wheedle a free trip, she said.

If travel agencies become extinct, she would end up doing much of the airlines' work for them, she said.

"The airlines would have passed all the costs on to me," Meyer-Knapp said. "And I wouldn't have anyone to complain to."

Scott Wyland is a business reporter for The Olympian. He can be reached at 360-357-0748 or swyland@olympia.gannett.com.

The Olympian Copyright 2002

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