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Airfare commissions (especially domestic) are much lower and in many cases are on a flat fee basis like $3/ticket. Travel agencies try and push more packages be
by calbear81 14y ago
Airfare commissions (especially domestic) are much lower and in many cases are on a flat fee basis like $3/ticket. Travel agencies try and push more packages because you get to wrap in a high margin product like hotels/cars (15-20%+) or by creating a package, they can access wholesale rates for airfare which gives them a larger margin.
- ted0 14y agoYou are right - I should correct that. I only did the research for hotel commissions and didn't intend to portray that the average rate for airfare is also ~13%.
- robryan 14y agoYeah, airfare search is a really bad starting point if you want to start a profitable business without massive startup costs. Hard to get access to data from airlines and a stack of other services competing for the thin margins.
- bigiain 14y agoYep - it's really hard to compete with the airline's own website prices for "simple" ticket purchases, and it's really complicated to automate "complex" ticket purchases; and the travel industry has "corporate travel agents" who've got enough experience to be really good at getting a "close enough to optimum" solution to complex ticketing requirements, and they've got much of the high-margin flight bookings market tied up. (At least, that was the state of play back when I was last involved back in '08…)