Travel agents who serve federal travelers are seeking new contracts that would require the government to pay them for their services.
Under current contracts, travel agents do not charge agencies for helping to make travel arrangements. Instead, they make their money off commissions from airlines, hotels and car rental agencies. Most of their income is from airlines.
Earlier this month, major airlines cut the commissions they pay travel agents by 40 percent, on top of similar cuts made in recent years. So the agents are asking the government to start paying them on a fee-for-service basis.
"The impact of this commission cut is very, very significant," said Phyllis Reagan, president of the Society of Travel Agents in Government. "The threat is out there that government travel agencies will go bankrupt, or have to walk away from the business- that's how deep the cut is-or to tremendously cut back on the level of service we're providing to the government."
The General Services Administration, even before the most recent commission cut, began planning for a shift to fee-for-service contracts with travel agents, a practice that is common in the private sector, said Susan May, GSA's director of travel management.
GSA negotiates contracts with travel agents and then allows agencies to place task orders against the contracts. May estimated that in the next three to four months, the contracts will become fee-for-service arrangements, in which travel agents will charge agencies for their services each month, minus any commissions they earn.
Because of the commission cuts, federal agencies will likely see their travel costs rise. But May said that because travel agents understand the ins and outs of federal travel regulations as well as how to get deals on travel arrangements, in the end they save the government money, May said.
"These are services that are needed, useful and overall make for more efficient, effective travel," May said.
The Defense Department has its own contracts with travel agents. DoD has 60 separate contracts, each of which must be assessed individually in light of the commission cuts, said Ken Stombaugh, assistant for travel and traffic management in the Pentagon's Transportation Policy Office. The department has not decided to move wholesale toward fee-for-service arrangements, Stombaugh said.
"We're going to have to do what we have to do to make sure we continue to have quality travel services," Stombaugh said.