Well with the specials that are out at the moment and the fares plummeting has got me thinking, I realise allot of agents have adapted already and moved away from the normal 7% on a ticket towards a set amount for a ticket, we have at Travel247. I mean looking at fares it really is not feasible to stay in business. Have a look at this example:

A return ticket to Portugal: Cost R4954 – Taxes R2854 – Fare R2100 so if you go on the 7% on the fare route you are looking at earning approx R140 for a booking that probably involves a few phone calls and a couple of emails, all in all wrapped  up in less than an hour. This excludes he back off to process the ticket, invoice, fund tracking etc, now wait what if they paid in cash then you would also have bank fees to pay.

What I am getting at is gone are the days when you could say I earn 7 – 9% of the fare on the ticket, you just cannot stay in business. The way we work it is to have set amounts for tickets that are under R5000 , under R10 000 and those that are over R15 000. This works out fair for all involved, keeps the costings reasonable, fair and transparent.

That been said one can look on the other end of the scale where a business class ticket can cost in excess of R40 000 to London, this ticket takes the same amount of work as a special ticket, why should the service fee be so different? I mean can you realistically compare a fee of R2800 to a fee of R140 when you doing the same thing. Generally speaking that is.

Maybe this a communist way and sure we live in a capitalist society however lets be fair. This makes me think of parallel markets, something like real estate where someone that sells a 2.5 million rand mansion earns 7% for selling a house, surely this is crazy and excessive? I mean over R150 000 for sale. One can see why companies and websites like private property and help to sell are doing so well. They charge a set amount no matter how much the value of the house.

Interesting concept I believe we are seeing a similar popular trend in travel. Will we see similar trends in other markets and services?