The experiment will be conducted with a leading travel company and tour operator in Germany. The firm sells its products online but also through a large number of mostly independently owned travel agencies. These travel agencies work together with several tour operators and the respective tour operators pay the agencies through commissions typically set once a year. Common commission payments are defined as percentages of sales (where typically percentages increase in the overall sales volume of an agency).
We study whether top-up payments made for bookings to specific target destinations increase respective sales. We vary whether the top-up payment is paid to the agency owner or the team of sales agents (through travel vouchers).
More concretely, we compare the performance (as measured by revenue and the number of bookings) in a control group of unaffected agencies to two treatment groups where
(i) a top-up payment of 6 Euros for each passenger is paid to the agency owner (for every booking of at least 1,000 Euros to Egypt, Greece, Spain, or UAE),
(ii) a top-up payment of 6 Euros for each passenger is paid to the team of sales agents through a travel voucher (for every booking of at least 1,000 Euros to Egypt, Greece, Spain, or UAE).
We further study whether the top-up payments have an impact on the number of passengers per booking. In treatment (ii), the travel voucher is sent to the agency owner and the owner is strongly encouraged to transfer it to the sales agents. We conduct surveys, in which we ask, among other things, whether the voucher was passed on to the sales agents.
To understand underlying behavioral mechanisms we consider potential heterogenous treatment effects in several dimensions such as the agencies’ total number of past bookings at the study firm, their baseline commission levels paid by the study firm, the prior total number of bookings to the targeted destinations, the "tightness" with which the agencies are linked to other tour operators (e.g. because of competitors’ incentive contracts, ownership, long-term cooperation, premium access to competitors' products and services). We will also study heterogeneous treatment effects with respect to the existing incentives systems within the agencies (i.e., the incentives for employees implemented by the agency owner) and agencies' team characteristics (e.g., number of employees).
We conduct two other RCTs in collaboration with the travel company in the same time frame (see the respective pre-registrations for details on the other experiments). One of these RCTs studies whether better service quality affects the agencies' performance. The other one studies different sizes of top-up payments to the agency owners. The control group that we use in the current RCT will also be used in the two other RCTs. Furthermore, treatment group (i) will be used in the other RCT on top-up payments.