Orbitz's Commissions to Travel Agents Could Pay Off.. For Orbitz

Orbitz announced today that it would offer commissions to travel agents who book hotel reservations and vacations on its new Web site, Orbitz for Agents. The goal is to lure customers who prefer to book with a live agent. The low commissions Orbitz's is offering travel agents makes it a steal for the company, but travel agents won't enamored of the low pay or working for a company they consider a rival.

Orbitz, like other online travel agencies such as Priceline.com or Travelocity, offers the same services as storefront travel agencies. But this latest move has made the company equal to all of them, by replacing online tools with live agents. It's obvious Orbitz hopes to reach the last hold-outs of the population who want someone to help them find the right vacation. While a live agent will also help those who need someone to help them find the right package, live agents also will be able to handle larger bookings of 10 rooms or more, a task online tools still can't complete.

Apparently, Orbitz also knows that revenues for travel agents who book business travel are expected to remain the same in 2010 or even surpass 2009. While those might be inflated expectations by the travel industry, other reports confirm that those travel agents who remain have carved out a niche -- mainly because people are tired or fearful of wading through a multitude of travel Web sites. Perhaps the younger generation will rediscover what travel agents offer -- skill and knowledge about travel budgets and well-liked places to travel. Agents may also have an edge when it comes to booking lower-priced cruises, since many have relationships with the Cruise Lines International Association.
According to the Web site and its tiny User Agreement statement, agents using Orbitz would receive $5 for selling an airfare and rental car package, 4% of gross booking for hotel packages, 10% of gross bookings for standalone hotel reservations and 60% net revenue from selling travel insurance. Apparently gross means the full sales amount received by Orbitz, while net revenue refers to only the service fees retained by Orbitz. In order to attract travel agents, Orbitz for Agents plans to offer higher commissions to the first 500 agents, at 12% for hotels and 5% for vacation packages, who sell packages by March 15. Those agents will continue to earn more through March 31, 2011.

At least a few agents say Orbitz's pay scale is low, so the company is definitely making a short-term investment to recruit agents at a price. Commissions for travel agents could be higher, with others offering up to 15%. Agents on Travel Agent magazine's Facebook fan page, had this to say about Orbitz's new deal:

Why would we want to use Orbitz? Only clients who want to book themselves and don't want my services use Orbitz? I have better resources....

I've used their affiliate link in the past, but I see this as maybe a last minute alternative, if at all. I don't see it as my daily booking engine. And I certainly wouldn't book a complete package for 4%.

I am skeptical, and I will be cautiously optimistic about the opportunity. For some reason, my cynical side thinks this is just a way for you to capture my customer data, and market direct to them. I've signed up, so I want to see you put your money where your booking engine is.