19 January 2001
A recent study commissioned by Carlson Wagonlit
reveals some interesting findings as to what makes a model
agency. The goal was to construct a benchmark for Carlson
agencies. This article first appeared in TravelWeekly
Is yours a model travel agency? Are your revenues up,
your overhead costs stable and your technology
That's what Evelyn Engert and Pat Stack asked a sample
of Carlson Wagonlit Travel's 1,200 independently owned
franchise locations recently.
Using a detailed questionnaire, the two women, partners
at the Jasper Group consulting firm of Chicago, were
"digging deep" at Carlson Wagonlit agencies, finding what
works and what does not to make an agency profitable.
The ultimate goal is to construct a hypothetical model
agency that Carlson agencies can use for benchmarking.
The first phase of the project has already revealed some
intriguing findings, Engert and Stack said at the recent
Carlson Wagonlit Travel annual meeting.
For one, service fees now make up 11 percent of the
average Carlson Wagonlit Travel agency's revenues - and
they contribute mightily to agency profitability.
The top revenue producer for agencies remains airline
commissions, which make up 36 percent of the average
agency's revenues, followed by tour commissions, at 24
After those revenues producers are cruise commissions,
hotel and car rental commissions, overrides and others,
such as rail, travel insurance and interest income.
Engert and Stack focused on the agencies' gross sales,
widely used as a measure of profitability when commissions
levels were consistent, but on revenues.
"With the commissions caps, gross sales are no longer
important because they no longer indicate how much an
agency makes," said Engert.
"It's more important to understand where the revenues
are coming from."
The study also showed that the average profit per
transaction of Carlson Wagonlit agencies is $4.87. The
average cost per transaction is $47.56 and average revenue
per transaction is $52.43.
The findings were based on 1999 business of 26 agencies
nationwide, with a mix of large and small agencies and in
areas with different labour costs.
The average gross sales per Carlson agent at the
agencies studied was US$576.014, which reflects the fact
that most agencies studied had a focus on leisure sales and
not corporate travel, which typically has higher gross
sales per agent.
One thing all agencies is that they expected their 2000
revenue figures to show an even greater dependence on
service fees, Engert said.
As it is, 25 of the 26 agencies studied implemented
services fees, most in the $10 to $20 range.
There were a few that charge less than $10 per
transaction, but they are the smaller agencies with less
than $5 million in volume.
"The larger agencies seem to feel more comfortable
charging higher fees," Engert said.