As we navigate through 2024, the travel industry landscape continues to evolve rapidly. We need to adapt or die as an industry. And for the life of me, I do not understand why some agents can’t see this. I am not sure how, but last week I stumbled upon an agency website that offered this cringeworthy message on their front page!
NO FEES! My services are complimentary for all of my clients! Travel vendors already include the cost of using a travel agent in your vacation price whether you decide to use one or not. This makes it easy/possible for me to offer my services at no additional cost to you!
CRINGE!
The notion that services are offered to the client at “no additional cost” is misleading. In reality, the travel vendors’ commissions are indirectly factored into the pricing, and this indirectly affects the client. More importantly, this model undermines the value of the unique expertise that professional travel agents bring to the table.
Why should travel agents start charging fees? Here are compelling reasons:
- Value Your Expertise: Travel agents possess specialized knowledge and experience. By charging a fee, you are placing a value on your expertise, much like lawyers or consultants. This reinforces the perception of travel agents as professionals and experts in their field and not some hobbyist who wants free trips.
- Diversifying Revenue Streams: Relying solely on vendor commissions puts travel agents at the mercy of these external companies. Does anyone recall what happened on February 5, 1995? Do not think for a minute that commissions are forever! Fees provide a more stable and predictable revenue stream, insulating your business from vendor commission structures and market fluctuations.
- Enhanced Service Quality: Charging fees allows agents to spend more time and resources on each client, leading to better, more personalized service. This can lead to higher customer satisfaction and retention rates.
- Transparency and Trust: Fee-based models promote transparency. Clients appreciate knowing exactly what they are paying for, enhancing trust and the perceived value of your services. If the client can’t understand that (or doesn’t want to), you need to reconsider if you really need or want them as a client!
- Adapting to Market Trends: The travel industry is ever-changing, and clients are becoming more accustomed to fee-for-service models in other sectors.
A recent study by the American Society of Travel Advisors (ASTA) revealed that agents who charge service fees report higher customer satisfaction and increased revenue. As Bill Engvall might say, here’s your sign!
3 thoughts on “Why Do Some Agents Not Understand This Basic Concept?”
I find this article insulting. I have been in the industry about 15 years now and one year attempted to charge fees and every client (some quite wealthy) walked away and went and booked with another agent who didn’t charge. Pushing fees is what started the fiasco because suppliers took notice and know they don’t have to give as much of a percentage now since agents are getting their money directly from the clients. It has hurt more than a few individual/small agencies. In our area, if you charge fees clients will usually book online instead of use us. I hate that other agents look down their noses at agencies that don’t charge now.
“Pushing fees is what started the fiasco”
Incorrect. Notice John’s mention of February 5, 1995. As a 40 year veteran, I remember. I was standing at the fax machine when the notice came from “our partner in travel” Delta about cutting commissions. Before that, there was very little mention of fees in the agency community. But the dominoes fell quite quickly. Don’t think that it was agents pushing fees that caused suppliers to take note and start cutting commissions – it was actually the opposite. They noted that we were willing to work for free. Make note of the reasons John points out for charging fees. None of them are about the nuts and bolts of having an agency, but they all have to do with the expertise you bring to the table. If you were unsuccessful in implementing fees, I would say that much of that was a combination of you failing to educate your clients on why you were doing so and that some of those clients were not clients you were going to keep anyway, since they were price shopping. Clients that book online will do so regardless – they are not looking for your expertise, just price. But, you have to value yourself before a client will. If you don’t think your time, knowledge and education are worth something, your client won’t either. Up to you – you can give your expertise away, or get paid for it, but the writing has been on the wall a lot longer than you think.
I cringe when I see this too! My first year as an entrepreneur I didn’t charge a fee, but it didn’t take long for me to figure out my value. I started charging a fee and I did not lose any of my clients. In fact, I’ve had a few reply, “That’s all?”. I have a niche and my clients value my professional knowledge. My fee makes my business more stable with immediate income. Many suppliers don’t protect our commissions (another injustice to our profession), so you might work, who knows how many hours for that itinerary and supplier. Then have a commission taken away or worse, you’re expected to pay it back! Name one other profession where a service oriented professional has to pay back or just accept not getting paid for their work. ASTA is moving in the right direction – encouraging Travel Advisors/Agents to become a “verified” travel advisor with professional credentials and charge fees for their services. Suppliers need to know that TA’s work is hard work and worthy of the commissions, whether or not the client travels.