EFFECTS OF AIRLINES ZERO COMMISSION ON THE PERFOMANCE OF TRAVEL AGENTS: A SURVEY OF AIR TRAVEL AGENTS IN NAIROBI CBD
DOI:
https://doi.org/10.47941/ajss.108Keywords:
zero commission, strategic responsesAbstract
Purpose: The study was an assessment of the effects of airline zero commission on the performance of travel agents.
Methodology: A descriptive survey of air travel agents in Nairobi CBD was taken. A population of 350 travel agents was identified out of which a sample of (35) 10% were randomly selected.
Results: Findings indicate that travel agents had been affected by the Zero commission. Their profitability, customer satisfaction, employee morale and internal processes were affected negatively. Findings also indicated that charging fees, cost leadership, differentiation, specializing in geographical areas or becoming niche players for specific leisure products, improvement in customer service and increased marketing and communication , expansion of the product base , strategic partnership and external linkages with other service providers were some of the strategic responses being adopted by travel agents. Findings also indicated that Travel agents have increased investment in financial resources, human resources, knowledgeable and creative workforce, and improvement in brand name, a unifying corporate culture, robust IT infrastructure and corporate governance as an effort to recover from the zero commission problems. The study recommends that the travel agents continue using generic strategies and tailor made strategic responses as this would help them to deal with the problem of zero commission. In addition, the travel agents should also differentiate their products in order to attract more customers. The travel agents also need to continue charging fees and ensure that they deliver good customer service to travellers.
Policy recommendation:The study recommends that the travel agents continue using generic strategies and tailor made strategic responses as this would help them to deal with the problem of zero commission. In addition, the travel agents should also differentiate their products in order to attract more customers. The travel agents also need to continue charging fees and ensure that they deliver good customer service to travelers.
Downloads
References
Ammadeus (2007).Service Fees and Commission Cuts Opportunities and Best Practices.For Travel Agencies.
Andal-Ancion, A; Cartwright, P. A.; Yip, G. S. (2003)."The Digital Transformation of Traditional Business".MIT Sloan Management Review44 (4): 34-41. http://sloanreview.mit.edu/the-magazine/2003-summer/4449/the-digital-transformation-of-traditional-business/. Retrieved 16 March 2011.
Brownell Travel ( 2011). About Us". http://www.brownelltravel.com/about.html. Retrieved 16 March 2011.
Business Licensing Authority (2011)."Travel Agents". State of Victoria, Australia. 30 June 2011. http://www.bla.vic.gov.au/wps/wcm/connect/Business+Licensing+Authority/Home/Travel+Agents/. Retrieved 10 September 2011.
Edmunds, Marian E. (2002). "A wake-up call for the industry". Financial Times. http://specials.ft.com/ftit/march2002/FT3Z9WRBNYC.html. Retrieved 16 March 2011.
Guest, D.E., Michie, J, Conway, N & Sheehan, M. (2003).Human resource management and corporate performance in the UK.British Journal of Industrial Relations, 41:291-314.
Hambrick& Fredrickson, (2001).The Satisficing Principle in Capability Learning, Strategic Management Journal21 (2000): 981-96;
Hayes, R. H. & Wheelwright S. C., (2001), Restoring our Competitive Edge: Competing through Manufacturing, New York, N.Y: Wiley.
Kaplan, R.S. & Norton, D.P. (1992).The balanced scorecard: Measures that drive Performance. Harvard Business Review, 70(1): 71-79.
Locke, E.A. & Latham, G.P. (1990).Work motivation: The high performance cycle. In Kleinbeck, U., Quast, H., Thierry, H. & Hacker, H. (Eds.) Work motivation. Hillsdale: Lawrence Erlbaum.
Mckinsey (2006). Analyst Viewpoint Does The S-Curve Still Exist?. IATA Economics: www.iata.org/economics.
Michael S. (2010). Value Creation in Travel Distribution.Lulu. ISBN 978-0557612468. http://www.amazon.com/dp/0557612462.
Nicola de Corato. (2011). The Fees Story in the Travel field . http://www.tobetravelagent.com/the-fees-story/. Retrieved 27 October 2011.
Porter M.E., (1980), Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York, Free Press.
Porter, M. E., (1985); Competitive Advantage: Creating and Sustaining Superior Performance, New York, Free Press.
Porter, M. E., (2004). Competitive Advantage, New York, Free Press
Prahalad C.K., Hamel G., (1990), Core Competency Concept, Harvard Business Review, May - June 1990.
Pricewaterhousecoopers (PWC) (2007). Hospitality Directions-Europe Edition.Briefing Paper November 2007.
Recklies.D.(2001). Beyond Porter-A Critique of the Critique of Porter," (June 2001): 1. Accessed Oct. 1, 2003, www. themanager.org/pdf/BeyondPorter.PDF.
Thompson A., Strickland A.J., (1993), Strategic Management. Concepts and Cases, NewYork N.Y:. Irwin
Tsai, H-T., Huang, L. & Lin, C-G.(2005).Emerging e-commerce development model for theTaiwanese travel agencies. Tourism management, Articles in press.
Yung, C-Y.(1998). Internet Marketing.The perceptions of travel agencies in the Taipei Area. Asia Pacific Journal of Tourism Research, 2(1), 67-74.
IBIS Centre for Management Research (2011). Selling Insurance Products in India: The Commission versus Fee Debate.http://www.icmrindia.org/casestudies/
Aboryge-Debrah, K. (2007). Competition, Growth and Performance in the Banking Industry in Ghana, Unpublished PhD Thesis. St Clement's University:
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2017 Victoria Mwende Stephen
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
