7 costly commission mistakes Indian travel agents make — and how to fix them
By Kabir Malhotra (Kabir Malhotra writes about how Indian travel buyers actually pay — UPI vs credit card vs forex card surcharges, reward-point math on the top travel credit cards, RBI tokenisation, EMI-on-flights and the small fees that compound across a year of bookings.) · Published · 11 min read
Running a travel agency is full of ways to quietly lose money — not through dramatic failures, but through compounding small errors in GST filing, airline debit management, PLB tracking, and pricing. These are the seven mistakes I see repeatedly among Indian agents, and each one is fixable.
TL;DR — the seven mistakes at a glance
The seven most costly commission and revenue errors Indian travel agents make are: (1) wrong GST category on service fees, (2) ignoring PLB targets until the quarter ends, (3) not disputing ADMs (Airline Debit Memos), (4) underpricing or not charging service fees, (5) missing NDC-exclusive inventory and fares, (6) over-relying on a single BSP airline relationship, and (7) not tracking hotel override thresholds. None of these are catastrophic individually — but together, they can mean an agency earning 30–40% less than it should from the same booking volume. Here is each one in detail.
Mistake 1: Getting the GST category wrong on service fees
This one burns more small agencies than almost anything else. Service fees — the amount you charge a client for booking management — are subject to 18% GST as a financial intermediary service. But many agents either (a) do not charge clients GST on top of the service fee and then have to absorb the GST liability themselves, or (b) apply the wrong GST rate assuming it falls under the tour operator 5% category.
The 5% GST applies specifically to package tour services (where you are the tour operator supplying a bundled product). A standalone service fee for arranging a flight booking is not a tour package — it is a service supply and should be invoiced at 18%. The distinction matters because GSTN scrutiny of travel agent filings has increased in recent years.
Practical fix: have a CA who knows the travel sector review your invoicing template and GST category mapping. The cost of getting it right is a fraction of the penalty exposure for getting it wrong for a year. Also ensure your GST number is on all client invoices — penalties for non-compliant invoicing apply to you, not the client.
Mistake 2: Not tracking PLB targets until it is too late
PLB (Performance Linked Bonus) from airlines is paid in arrears — quarterly or annually — to agents who hit volume targets. The common mistake is not tracking progress toward targets mid-period. Agents often discover in the final two weeks of a quarter that they are 30 tickets short of the PLB threshold — at which point they either scramble (sometimes booking at low or zero margin just to hit the number) or miss it entirely.
PLB only makes sense if you are tracking it continuously. Keep a simple spreadsheet of your eligible bookings per airline per quarter, updated weekly. Some B2B portals and GDS terminals have built-in PLB tracking — use it. When you are 80% of the way to a PLB threshold with two weeks left, you have options: actively push that carrier to clients who have flexibility, or acknowledge you will miss it and not distort your booking economics trying to catch up.
Also: PLB is typically only available to IATA/BSP-accredited agents above a minimum volume. If you are below threshold, sub-agenting under a larger accredited agency may let you access indirect PLB benefits — ask if this is available in your region.
Mistake 3: Not disputing ADMs
ADM stands for Airline Debit Memo — an invoice raised by an airline against a travel agent for a ticketing error, a fare audit discrepancy, or a commission clawback. ADMs are processed through BSP (Billing and Settlement Plan, operated by IATA in India) and auto-debit from your BSP account if not disputed within the specified window — typically 14 days.
Many small agents pay ADMs without reviewing them because the amounts seem small and the process of disputing them feels complex. This is a costly habit. Airline fare audit ADMs in particular are often raised in error — the airline's revenue management system flags a ticketed fare as incorrect even when it was legitimately available at the time of booking. These are very often successfully overturned on dispute if you can show the fare was available in the GDS or booking system at the time of issue.
Practical fix: treat every ADM as disputed by default until you have reviewed it. File disputes through the IATA BSP India dispute process within the 14-day window — even if you ultimately agree the charge is valid. Airlines do settle valid ADMs, but they do not reverse auto-debited ones simply because you later discover an error. Many TAAI and TAFI regional chapters run ADM dispute workshops — attend at least one.
Mistake 4: Underpricing (or not charging) service fees
I have seen agents in tier-2 cities charge ₹100–150 per ticket as a service fee, or charge nothing at all, because 'clients will go to MakeMyTrip if I charge more'. This is a race to the bottom you cannot win. MakeMyTrip makes money on the same booking through dynamic pricing, hotel upsells, and platform advertising — its apparent price is not its actual economics.
A travel agent's value is not ticket issuance — it is advice, error recovery, flexible options, and the peace of mind of having a human to call when something goes wrong. Price this accordingly. A service fee in the range of ₹300–600 per domestic booking and ₹800–1,500 per international booking is not unreasonable, especially for clients who have been burned by OTA cancellation nightmares.
The key is to articulate the value: 'My fee covers one rebooking attempt if the airline changes the schedule, help with the refund if the trip gets cancelled, and a call you can make at 5 AM if something goes wrong at the airport.' Many clients, once they have experienced the OTA support line at midnight, will happily pay for this.
Mistake 5: Missing NDC-exclusive inventory and fares
NDC (New Distribution Capability) is the IATA standard for direct airline-to-agency connections that bypass or supplement the traditional GDS. Airlines including Air India, IndiGo, and Akasa have been pushing NDC channels because it lets them offer fares, bundles, and ancillaries that are not available in the GDS.
If your booking workflow is entirely GDS-based and the portal you use has not integrated NDC content from major Indian carriers, you may be missing:
- Air India fares that are exclusive to direct channel or NDC — sometimes lower than published GDS fares
- Bundled ancillary packages (seat + meal + baggage combos) that show as a single bookable product on NDC but require separate booking in GDS
- Akasa Air content, which is more robustly available through NDC connections than through some GDS filings
Ask your B2B portal or GDS provider specifically whether they carry NDC content from Air India and IndiGo, and whether it is marked as such in search results so you can compare it to standard GDS content. Platforms with mixed GDS + NDC content will show you a more complete fare picture than pure-GDS searches.
Mistake 6: Over-relying on one BSP airline for income
Some agents build a significant portion of their income around one airline's PLB or override commission — and then the airline changes its commission structure, reduces PLB tiers, or has an operational crisis (Go First and Jet Airways are the cautionary tales here — both had agent-facing financial exposure before they ceased operations).
Go First's collapse in 2023 left many agents holding tickets they had already issued and cash they could not recover from BSP quickly. Agents heavily concentrated in Go First bookings had significant exposure. The lesson was supposed to be: spread your volume, do not let one airline represent more than 30–40% of your BSP billing if you can help it.
In the current market, SpiceJet's prolonged financial turbulence (it has been operating under financial stress for several years) is another reason not to over-concentrate. Domestic bookings spread across IndiGo, Air India, and Akasa gives you operational and financial resilience.
Mistake 7: Not tracking hotel override thresholds
Hotel override commissions work like PLB — you earn a higher commission rate once you exceed a room-night or revenue threshold with a specific hotel or hotel chain. If you book 45 room-nights at a Goa resort in a quarter and the override tier kicks in at 50 room-nights, those last 5 nights are almost certainly bookable by diverting a client who has flexibility on exactly which property they use.
Most agents with hotel agreements do not actively track where they are against these thresholds. Set a monthly reminder to check your room-night counts against each hotel's override schedule. Even one extra client pushed to the right property can tip you into a higher override tier that applies retroactively to all bookings in that period — a meaningful income difference with zero additional cost.
For B2B hotel booking and commission tracking, pair whatever platform you use with a simple spreadsheet. Some newer portals including FlightGPT Partner are building agent-facing booking history dashboards that make this tracking easier. Find the best fares to combine with your hotel packages using FlightGPT's AI flight search. Related reading: travel agent profit margins in India 2026.
Frequently asked questions
What is an ADM in travel agency terms and how do I dispute one?
ADM stands for Airline Debit Memo — a charge raised by an airline against your BSP account for a ticketing or fare error. In India, ADMs are processed through BSP India (iata.org/en/services/settlement/bsp). You have a dispute window — typically 14 days from the date of the ADM — to file a counter through the BSP dispute process. Gather the original fare quote from your GDS or portal at the time of booking as evidence. Many ADMs are successfully overturned, particularly those based on automated fare audit errors.
What is the correct GST rate on a travel agent's service fee?
A standalone service fee for arranging travel — flight booking, hotel booking, or visa assistance — is classified as a financial intermediary or facilitation service and attracts 18% GST. This is different from the 5% rate that applies to tour operator packages where you supply the complete holiday as a principal. Getting this wrong exposes you to GST audit liability — consult a CA experienced in travel sector GST before finalising your invoicing.
What is NDC and why does it matter for Indian travel agents?
NDC (New Distribution Capability) is an IATA standard for direct data connections between airlines and travel sellers, bypassing or supplementing the traditional GDS. Airlines including Air India and IndiGo use NDC to offer fares, bundles, and ancillaries that may not appear in a standard GDS search. If your B2B portal or GDS terminal is not connected to NDC content from Indian carriers, you may be showing clients incomplete fare options. Ask your portal provider specifically whether they carry Air India and IndiGo NDC inventory.
How should I price service fees without losing clients to OTAs?
A service fee in the range of ₹300–600 per domestic booking and ₹800–1,500 per international booking is generally sustainable for most independent agents without driving clients away — provided you articulate the value clearly (rebooking help, refund management, a real human to call). Clients who have experienced OTA cancellation support firsthand tend to value the service-fee model. Those who have never needed support will always price-compare — those clients may not be worth the zero-margin chase.
How do I track PLB progress during a quarter?
Most GDS terminals (Amadeus, Sabre) have PLB reporting modules that show eligible segment counts per airline per period. If you book via a B2B portal without GDS access, ask the portal whether they provide PLB-eligible booking reporting — not all do. A simple spreadsheet tracking eligible bookings by airline per week, updated Monday morning, is sufficient for most small agencies. The key is reviewing it at the 6-week and 2-week marks in a quarter, not only at the end.
Is it safe to continue booking SpiceJet tickets for clients in 2026?
SpiceJet has been operating under prolonged financial stress, with periodic reports of delayed refunds, reduced network, and operational disruptions. As of 2026, it still has an operating licence and flies certain routes, but the reliability picture is different from IndiGo or Air India. Many agents advise clients to choose SpiceJet only when the price differential is significant and the client understands the risk — and always recommend travel insurance for SpiceJet bookings. Verify SpiceJet's current operational status on the DGCA website (dgca.gov.in) before booking.