Canadian travel sellers said Transat Holidays’ and Nolitours’ decision to pay commission on fuel surcharges and service fees is a good move toward fair compensation and transparent pricing in Canada’s heated vacation package market.
The two Air Transat vacation packagers announced this week that starting Sept. 1 they will pay commissions on the base price, fuel surcharge and service fees. The new policy applies to bookings on Sun, Florida and Europe packages for departures beginning Nov. 1.
Agents said the move addressed a major problem that gnaws at their revenue stream and annoys consumers who are frustrated by a lack of price transparency.
“This is absolutely a fabulous change for the Canadian travel agency business,” said John Featherstone, owner of Featherstone Travel Plus in Simcoe, Ontario.
“I just hope other suppliers sit up and take notice. The agency community has seen constant drops in revenue for a number of years. This should help reverse that trend.”
Patrick Luciani, president of Travel Only, also welcomed the move, saying that he expects it will spur other suppliers to institute similar commission policies – especially “partners who value our professionalism.”
Greg Dixon, president of Flight Centre Canada, said in a statement that “all-inclusive and more transparent pricing . . . reduces the often-confusing presentation of prices to customers where taxes and surcharges are much greater than the advertised fare price.”
All-inclusive pricing’s benefit to agencies is they get paid on the total price, Dixon added, while the benefit to the customer is they can easily do price comparisons.
Transat cites agent concerns
It was travel agents’ concern about non-commissionable fuel surcharges in package pricing that sparked Transat Holidays to change its policy, said Denise Heffron, vice president, national sales and commercial, announcing the move.
“We acknowledge the fact that fuel surcharge fees increased significantly in the past few years,” she said.
“We listened to agents’ concerns on that subject and that is why we are presenting this new way of calculating commissions now. The reaction from agents is great so far.”
Dollars and cents value unclear
For agents, the new policy will mean a “significant” increase in commissions, Transat Holidays national marketing manager Valerie Martin told Travel Market Report.
Just how significant? That “varies from one package to the other, from one destination to the other, since the fuel surcharge fees vary,” Martin said. “I can’t provide an exact percentage.”
Other packagers also pay
Several other suppliers in Canada’s competitive packaged vacation market said they already pay agents on fuel surcharges and service fees.
WestJet Vacations said it includes fuel charges in its commissionable base pricing; it does not assess a fuel surcharge.
“Our base fares reflect a true base fare; we have never placed what should be a commissionable section of a fare in a non-commissionable section of the total vacation price,” said spokesperson Jennifer Sanford.
“As always, our goal remains to be open and transparent in our relationship with travel agents.”
Sunquest Vacations said earlier this month that it would pay commissions on about $200 of the fuel surcharges, taxes and fees tacked onto its base prices.
MLT Vacations has been paying commission on airfares, including fuel surcharges, taxes and fees, for quite some time, a spokesperson said.
MLT Vacations also offers an Agency Service Charge option to travel agents. “If they elect to use the Agency Service Charge option, we pay commission on that as well. They retain the entire amount charged, less a small handling charge,” said the spokesperson.
MLT brands include Delta Vacations, United Vacations, Aeromexico Vacations and WorryFree Vacations.
One significant player, Air Canada Vacations, did not return a request for comment on its pricing and commission policies.