Page 26 - StudyTravel Magazine November 2023 Issue

dIreCTIoN

the future

of CoMMission Change in commission
offered to agencies
over the last 3 years
Commission rates have remained cut down commission so I reckon
relatively stable overall in the last few this will also happen in international
years, but with external economic education mainly because with the
factors impacting the industry, internet many bookings and sales
some agents wonder if commission are done directly and online, without
rates will remain steady or begin the work of an agency. Having said
to decrease. Maria Thereza Mello, this, I think schools should recognise
Director of International Schools and the importance of good agencies.
Travel www.internationalschools. Counselling agencies believe in the
com.br in Brazil says, “Our company schools they represent, they know the
has not experienced receiving less quality of the programmes and also, 57% Stayed the same
commission from our partner schools due to the vast knowledge they have 28% Increased
but I think this might be a tendency in the field, they can offer the best 15% Decreased
in the future. Airlines and hotels have educational solutions to students.”

established school that seeks to raise Susan Fang, CEO of OxBridge Hold- members with personalised commis-
the percentage of Argentine students, ings, Inc. www.oxbridge.com.tw in sions and rewards. Susan notes that
so as to boost the nationality mix in Taiwan agrees, noting, “Hiking com- this practice is something that she
their school.” mission rates to far-above-average has seen in the industry and finds
Another concern with language market rates isn’t sustainable in the concerning: “Without prior consulta-
schools offering higher-than-average long run. It generates unnecessary tion and reaching an agreement with
commission rates is how sustainable price wars in the industry and gives the company, I disagree with schools
this practice could possibly be as off a bad reputation that schools and directly incentivising individual staff
schools potentially try and outbid agents are chasing their toplines with- members with commission rewards,
each other. Ramón Villa Menendez, out consideration for service qual- be it cash or otherwise,” she says.
CEO of Language Kingdom www. ity, relationship retention, business “It may unethically ‘cloud’ said staff’s
lkidiomas.com in Spain relates, growth and other factors, which are all judgement to recommend students
“Commission rates have become a facilitated by healthy profit margins.” towards the school even when others
subject of great debate, with some Another concern expressed by are more suited; it may undermine the
markets witnessing rates as high agencies is the emerging practice of company’s authority and leadership,
as 40 per cent (even 45 per cent). schools incentivising individual staff particularly if the company’s existing
While these numbers might incentive scheme falls short
be concerning, they are not of the external incentive, if
entirely unprecedented. What the company’s agenda is to
begs consideration is whether I would not trust promote other schools for
these elevated commission strategic reasons, or if the
rates are sustainable in an educator who company’s incentive scheme
the long run, and if they takes into account KPIs other
will continue to surge. The offers me 40 per cent than meeting sales targets. In
repercussions of perpetually short, the gesture is seen as
escalating rates could indeed commission meddling with the company’s
be problematic for the industry autonomy,” she adds.
as a whole.” delilah@studytravel.network

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