Travel agencies help businesses book travel reservations, obtain airline tickets, and plan trips. These firms have access to computer reservation systems that allow them to instantly compare rates and make reservations. In addition, many travel agencies obtain discounts from major travel providers, allowing you to reduce travel costs.

This guide is designed to give you the facts you need to evaluate and choose a travel agency for your business.

Available services

Travel agencies help businesses and individuals prepare for travel, issuing airline tickets, making hotel reservations, and reserving rental cars or other types of transportation.

In addition to offering these basic functions, travel agents can offer a range of services such as ticket delivery, detailed travel expense reports, and 24-hour emergency service to handle problems. For larger accounts, travel agencies can also help negotiate custom discounts with travel vendors. Some agencies even provide complimentary copies of air flight guides and detailed information about destinations to help businesses plan their travels.

Agency size

One of the factors to consider when choosing a firm to work with is the size of the agency.

Small, independent travel agencies are best equipped to provide personalized attention. Their small size often allows the firms to accommodate unusual traveler needs and preferences. However, small agencies are limited in their ability to negotiate better hotel rates and airline fares. These firms are typically positioned to best serve companies that spend up to $100,000 in yearly travel bookings.

A medium-sized agency, usually a larger local agency, does enough travel business to obtain significant discounts from hotels and a sizable number of free perks from airlines that can be shared with clients. Medium-sized agencies can also provide added travel conveniences, such as an airline ticket printer in your office. Firms with billings between $100,000 and $1 million should find an agency that offers the appropriate level of support.

A large agency, usually a regional or national firm, is able to negotiate the largest discounts with suppliers and will also be very familiar with rebating arrangements. Companies with multiple offices may especially want to consolidate their account with a national agency for increased bargaining power and ease in travel arrangements and reporting. Corporations with more than $1 million in yearly bookings should consider using a regional or national travel agency.

The bidding process

If your firm has travel bookings of a few hundred thousand dollars a year, it is generally worth the effort to ask travel agencies to bid for your business.

Begin the process by screening travel agencies in your area. You should initially ask whether the travel agency can offer the services you require and whether the agency's client base fits in well with your demands and travel volume.

Once you have narrowed your choices down to two or three agencies, you can request that they provide you with written proposals. You will need to give the agency a complete breakdown of your travel expenses, including information on how your firm currently makes its travel arrangements. In return, the agency should provide a proposal that details how they can save you money and simplify your current travel booking process. This may include giving you access to special discounts that the agency has negotiated, or providing features such as an on-site ticket printer.

Online reservations

In the past few years, online and Web-based reservation systems have emerged as an alternative to travel agents. Essentially, they offer travelers the opportunity to compare travel options and directly reserve tickets.

Since most small businesses do not pay travel agencies for their services, online reservations do not offer any real price savings. They are best suited for those who feel it is easier to compare travel options on their own than to explain these requirements to an outside provider.

Pricing

Travel agencies have traditionally worked on commission, earning 5%-15% of charges paid by travelers. However, recently imposed caps on commissions have forced some agencies to reconsider this revenue generation model.

Alternative revenue structures include a flat fee for all services, a transaction fee for each service rendered, or a combination of the two. In cases where the clients pay for services, the commission is typically shared with the client.

Special tips

Look for agencies catering to businesses
Vacation-oriented travel agencies may not be as well equipped to dealing with the more urgent demands of corporate travelers.

Ask about agencies' primary vendors
Agencies often want to book travel with their primary vendors to earn incentive rewards. In some cases, you will be able to share in these benefits by agreeing to use the same providers.

Know that agents aren't perfect
Although all travel agents have access to the same few computer reservation systems, not every travel agent will find the same fares. The skill of the agent, the time invested in the search, and the availability of low fare finders can all affect the rate they obtain.

Travel auditors can be hired to check how effective a travel agent is at finding the lowest available fares.