The Tourism and Travel Agents Association plans to price plane tickets and vacation packages in shekels rather than in US dollars, due to the greenback’s instability. The change requires government approval.
There was sufficient support in the Knesset to pass the initiative, association chairman Kobi Karni said Monday in Eilat.
“In the past years the American currency’s instability has caused large financial damages to the travel agents and therefore we cannot rely on it any longer,” he said. “We have been considering this move for a long time and now that the Israeli currency is strong and can provide financial security to the travel agents, it is time to let the shekel replace the American dollar.”
The airlines are expected to oppose the initiative, since their costs are priced in dollars.
Meanwhile, the Tourism and Travel Agents Association’s leadership expressed anger at Lufthansa’s and Swiss International Air Lines’s decision a month ago to eliminate travel agents’ commission fees of around 7 percent of a ticket’s cost starting in September, and threatened to impose sanctions in response.
“This aggressive attempt by foreign carriers to impose an unacceptable policy is a stupid and unprecedented move,” an association official told Army Radio.
Karni, speaking at a conference in Eilat, said travel agents at the meeting would wear T-shirts bearing the words: “We won’t allow the Germans and the Swiss to dictate the rules of the game here.”
“This decision might cause the dismissal of hundreds and thousands of employees in the industry and an annual loss of $70 million to $100m.,” said Ophir Tours’ general manager Yehuda Zafrani. “We sell 95% of the carriers’ plane tickets and act as the companies’ representatives, so why should we tolerate this treatment?”
He said the larger agents would suffer less from the planned cancellation of the commission fees, “but the struggle here is for the future of the entire industry. This sort of move requires a long-term and national plan, as was done in Europe. Not without reason, British Airways, whose management considered the idea, eventually changed its mind,” Zafrani said.
Tali Teperberg, owner of Jerusalem’s Snir Travel Agency, told The Jerusalem Post canceling the commission fee would “destroy” travel agents.
“The airline companies exploit us and the customers,” she said. “Nowadays, almost half of the ticket’s cost is airport taxes, which shrinks our commission.”
If more airlines eliminated the commissions, Teperberg said, travel agents would have to either close or specialize in very specific niche markets.
“Eventually, both the customers and the agents will be hurt as a result of this move,” she said.
Lufthansa and Swiss International Air Lines issued a statement that said: “We understand the travel agents’ emotional storm due to the upcoming changes in the aviation market. It is important to mention that even though base commission fees will not be paid to agents, starting in September 2008, agents will still be rewarded on sales in accordance with destinations and type of plane tickets that were sold. The move to the model of a zero-percent commission fee is now [the norm] in all big markets, including Europe and the US. The results show that the agents benefit more when they do not have to rely on the airline companies’ commissions, but rather on charging their customers for a service fee.”