TYPES OF MANAGEMENT FEES
Traditional management fee: commission minus agent’s profit and direct and indirect costs. What’s left is returned to the client. However, this could result in a cost to the client. This concept is difficult to understand and difficult to sell to client.
Transaction fee: client pays an agreed fixed fee for every transaction/service that the agent provides. Easy to understand, but expensive to set up.
Menu pricing: A charge is made for every service, eg to amend a booking, airport meet-and-greet service. Enables agents to specialise more easily, but is almost impossible to get right.
Joint venture: Also known as revenue sharing or profit sharing. Whatever is left when costs are taken away from commission is shared between agent and client. This appears fair, but agent’s income is not protected.
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