April 28, 2006
More pressure for local Travel Agencies

The travel agency industry in the Caribbean is approaching its darkest hour and some agencies in St Vincent and the Grenadines may be counting down the time before they send their workers home and fly away into the sunset.

In a recently held IATA meeting in Grenada those in attendance learnt of the push towards removing all commission paid by the airlines on tickets sold. Although not completely surprising, this development is coming much sooner than was previously expected. SEARCHLIGHT has learnt that the changes should take effect by the end of this year.{{more}}

During better times, travel agencies made their daily bread from the 9% commission they received from the airlines for each ticket sold. In the 1990’s this 9% commission was adjusted to 6%. This sent ripples through the local industry. “Our travel agency association had to agree on implementing a service charge to deal with the fall out,” stated Ken Murray, former president of the local travel Agency Association and Manager of Universal Travel.

The now defunct Travel Agency Association however had problems standardizing this service charge: “some agencies did not follow through, so there was no unity,” charged Murray. This view is shared by Janine Sinson of Going Places travel agency.

When asked if the Association needs to be revived to deal with the coming storm, Sinson did not express much optimism. “It will be useful to have the Association but we couldn’t do it before because everybody was doing his own thing.”

Murray told SEARCHLIGHT that he believes that this inevitable move will have a huge impact on the local and regional travel agency industry, “some places may have to cut staff and some may close their doors.”

Claudette DeFreitas of Global Travel sees closure of certain agencies’ doors as being inevitable. DeFreitas, who was the last President of the Association told SEARCHLIGHT that it is only in a crisis that people notice the need for unity. She said that her company had a major meeting seven years ago, making preparation for this development. “That’s the way it is going to be. We can’t do any thing about it.”

The Airline industry’s 0% already exists in other markets including the USA. Agencies there have had to turn to other innovative means to stay in business and prosper. These means are not readily available to the Caribbean because of our geographical limitations.

Murray explained “because of the vast amount of states, the travel agencies in the US can branch out into car rental and tours.” The most profitable however, according to Murray is the arrangement that they have with the cruise companies who pay up to 20% commission to the travel agencies.

In the midst of the bad news however, Kenneth Bibby of Irie Travel Services believes that every revolution has it challenges and that the Travel Agency Industry just has to adjust to the changing times. Bibby also had a view on the Travel Agency Association: “If it functions the way it was, it can’t work. We can’t have a cut throat mentality and allow petty differences to divide us if something like that is to work.”

The local travel agency industry employs approximately 30 persons nationwide.