Travel agents facing thirty-three percent cut in commissions
Travel agents make their money from the commission they get for every ticket they sell. For the past twenty-five years, Belizean travel agencies have been getting a nine percent commission from the airlines that fly into Belize. But in December, American Airlines, Grupo TACA and Continental each wrote to the travel agents telling them that on the first of January, 2000, the commission rate was going to be cut by thirty-three percent, making the nine percent rate, six percent. The airlines say they’re trying to save money but travel agents say their livelihood is in jeopardy.
John Searle, Travel Agent, Grupo TACA
“Most travel agencies will have to do some tremendous belt tightening, tremendous cuts in expenses and there are some travel agencies that may not survive this.”
John Searle is in a difficult position, besides being a travel agent, he’s the general sales representative for Grupo TACA, one of the airlines making the cut. Searle says his agency will have to diversify to survive. He says the airline is trying to cut expenses.
John Searle
“The explanation offered by Grupo TACA was that in line with what all airlines are doing in the region in this point in time, the airlines were trying to cut back on expenses themselves. They felt that this measure had been introduced in the United States probably a year ago and it had been introduced quite successfully, even though there was some resistance to it. I’m not sure if it’s been introduced in Europe yet but I think it has to some extent. The Caribbean, it’s only just being introduced in the Caribbean and the travel agents in the Caribbean are pretty well in an uproar over it so I’m not sure how the chips are going to fall at the end of the day but the airlines are in quite a powerful position.”
President of the Belize Association of Travel Agents, Lombardo Riverol doesn’t think the explanation offered by the three carriers is justified.
Lombardo Riverol, President, Belize Assoc. of Travel Agents
“We have increased flights, we have increased destinations so the airlines in Belize definitely are making money and we don’t think we should be the scapegoats if they’ve had problems in the other countries. We understand they are not making it too well in Central America but here in Belize, their profits have gone up.”
Riverol says last week the Nicaraguan travel agents boycotted the airlines for one week and Caribbean travel agents were talking about doing the same thing. While a boycott might not be on the Belize association’s agenda, they plan to fight the decision.
Lombardo Riverol
“We have written the airlines with copies to the government and we want to ask government to pass a legislation to control our commissions.”
Riverol says the airlines have been competing with the travel agencies directly, going out and getting customers for themselves and while he admits that’s business, he doesn’t think it’s fair.
Lombardo Riverol
“They have been taking away our accounts, our corporate accounts and they are directly competing with us, going out, taking away our customers, and we do not see it as fair. We really don’t see it fair cause we have also put in our bid, for communication, electricity, training of staff, just like them.”
Q: “But isn’t the nature of business competitive?”
Lombardo Riverol
“Yes, but then we only live off a nine percent commission which government of Belize taxes us on, and takes away business tax and they have the privilege… I think they don’t pay business tax and they don’t pay income tax either.”
For travel agent Oscar Salazar of Belize International Travel Services, the cut will make things difficult but Salazar says he’s willing to meet the challenge.
Oscar Salazar, Travel Agent
“We have to just keep trying to sell as much as we can, trying to improve on volume. In other words, I suppose the key is trying to sell more and I guess this is what’s expected of us, trying to sell more. We are going to do our best to try and meet the challenge but it’s going to be hard.”
Because Belize has such a small market, Belize travel agents will have to expand their services into tours and more package deals. But will more Belizean consumers continue to use the middleman for their tickets?
Q: “You usually use a travel agency when you fly?”
Ruth Guy
“No, I call the airlines, and I check who has the cheapest ticket and from there I go and buy my ticket. And that’s that.”
Althea Nelson
“I would help them, I would go to them because we do need the travel agency cause you have to have that other source of getting your ticket rather than going to one place. That way you could compare prices.”
Lombardo Riverol
“We have written to the airlines and asked them to reconsider our case because we think we have made the airlines what they are. Because of us, we have now increased flights into the country and we have new destinations, like American has a new destination, Continental has two flights into the country. So if it wasn’t for us pushing I think this wouldn’t have happened.”
Janelle Chanona for News Five.
There are one hundred and fifty people employed by twelve travel agencies in Belize.
