Let's face it: When it involves traveling, most of us are very concerned about our budget. Some travelers find it difficult to trust travel agents or advisors because they fear they can be charged for using their services.
However, not all travel advisors charge fees – although there’s a growing trend to charge them.
TravelPulse took an in-depth take a look at why and the way travel agents charge for his or her trip planning services and why some decide to offer their trip planning services free to travelers.
Are travel agencies free?
The query is more complicated than you would possibly initially think.
Traditionally, travel advisors receive a commission from their providers. So while you go on a cruise, the cruise line pays the travel agent you employ to book your trip.
Commissions are typically a typical commission rate set by the cruise line (e.g. 20% of the cruise price). However, this will vary depending on whether your travel advisor is affiliated with a bunch agency, for instance, which can offer higher commissions to the vendors they use most through business partnerships (although the host agencies often cover a portion of a travel advisor's commission, which is the could make things much more complicated). This applies to cruise ships, tour operators, hotels and resorts and even package tours.
Commissions were once the usual way travel advisors made money: not by charging clients, but by being profitable from the vendors they used.
Tammy Levent, President of Elite Travel Management, explains why her agency never charges fees: “After over 30 years of success in the travel industry, at Elite Travel we have built a strong reputation based on trust and exceptional service . We understand the competitive nature of today's travel market, particularly with the increasing prevalence of online booking platforms
“The introduction of a service fee could deter potential customers from booking with us,” explained Levent. “Our goal is to remove any barriers that might prevent someone from taking advantage of our world-class service and competitive pricing. We are confident that once customers experience Elite Travel's offerings, they will recognize the value we provide. In addition, we told our customers during our first contacts that we work on a commission basis. We would encourage you to contact us if you are serious about booking or wait until you are ready to book to ensure you are committed to the quality and integrity of our services.”
Why an increasing number of travel agencies are charging fees
Let's face it: there’s a value of living crisis in cities and countries world wide, causing many individuals in various industries to vary their business strategies.
The same thing is occurring amongst travel advisors, and a brand new trend has begun: charging for certain travel planning services. Of the 26 travel advisors who shared their expertise for this text, 17 charged a fee for a visit planning service, although their fee structures vary.
For what specific reasons do travel advisors now charge fees for his or her services? Let's take a more in-depth look.
One of the principal reasons travel advisors charge for his or her trip planning services is to weed out clients who will not be serious customers in the long term. Travel advisors can spend hours creating travel offers for travelers and setting prices, but those self same travelers may simply book directly or plan the trip themselves, depriving their advisor of the chance to generate revenue from those hours. This is only one example of a travel advisor's frustration.
More complicated bookings resembling FIT trips, group trips, weddings or meetings also can take hours, but most travel advisors will not be paid by the hour. This means they only depend on the promise of a commission once their customers have began their journey.
Another reason needs to be easy to grasp: sometimes commissions just aren't enough. Imagine a travel advisor earning just $200 in commission for a FIT booking that took 16 hours to plan, book and execute. Divided by the variety of hours spent planning the trip, the travel consultant's net salary is barely $12.5 per hour.
Although it is a creative example, it might show that point spent planning travel for others sometimes doesn’t repay in relation to the quantity of commission the advisor earns, leading some to introduce travel planning fees for booking airfares (one other segment that pays relatively limited or no commission) and more.
JoAnne Weeks, head of vacation at Acendas Travel, was among the many travel advisors who initially didn't charge fees but found them useful and even essential after the pandemic ended.
“I’ll be the first to admit that I’ve been pushing back on fees for a long time,” Weeks said. “Especially when it comes to cruising, but I realized that I was giving away my 28 years of cruising experience to my clients for free. People asked for information, I took the time to research, put together a custom quote for lines they hadn't even heard of, and they used the information I gave them and booked it themselves. We were tired of being used. You have to pay to consult a lawyer, call a plumber, and even pay for the person to cut your hair. We are worth it.”
Weeks said the post-pandemic revenge travel trend resulted in many travelers asking for information but leaving without booking with Acendas Travel, requiring her to introduce a fee structure in 2021. Fees for their agency include a cruise concierge fee. FIT fee, flat fees for flight service and more, all adapted to the respective planning period.
Nick Pena, luxury travel designer at Cruise Planners, is a travel advisor who charges clients fees for issuing airline tickets, changing their itineraries and canceling them.
“Charging helps to weed out the clients I don’t want and keep the ones who appreciate my work,” Pena explained. “A fee structure allows the consultant to have a more stable income and ensures that my time is paid for whether or not they make the trip or not. Even easy tasks like issuing airline tickets incur a $25 fee. Nobody else works at no cost. Why should I?
“Charging a fee is proof of my worth,” he continued. “I provide a life-saving beacon in the midst of overwhelming travel options, ever-changing regulations, and unforeseen circumstances that can arise on even the most carefully planned trips. My fee ensures that I stay at the client’s side.”
Why book with a travel agency?
Travel agents don't always charge fees, although they increasingly do. Then why should a traveler choose to book a trip with a travel advisor?
Well, it depends on expertise. Travel advisors are experts in travel planning and sometimes that's exactly what you need. While you can book something online without ever speaking to a human, that human connection is often what people need, especially when something goes wrong while traveling or you want to book something completely unique.
Madeline Steuber Johnson, co-owner of Steuber Travel Group, explains her agency's prospects: “We have several calls to get to know our clients; We often spend a lot of time designing an entire itinerary before it even arrives at a DMC. We hand-select the hotels and take the quoting process a step further with our partners by asking follow-up questions and making alternative suggestions so that we truly deliver something highly personal. This alone also requires us to invest a lot of time in our education and knowledge about the destination. Our business is not to act as a middleman or intermediary and route generic itineraries provided by companies that do so on a mass market scale.
“As you can see, our business model is not profitable if we do not charge for our time, given the time we like to invest in our customers,” Steuber continued. “Other industries charge for their time, and I have felt since we started our company that the travel industry is behind on fees. Interior designers are a good example: they charge for their time designing and don't let the commission they can earn on a sofa dictate how hard they work for a client. We don't want to compromise our results or change our process to favor quantity over quality so we can make more money. Therefore, we are confident in the value we provide for the fee we charge!”
In the end it's up to you
While travel advisors are increasingly starting to charge some sort of trip planning fee for their services, not all are doing so. Travelers can pay attention and ensure they find the best solution for themselves, their travel needs and their budget. But the benefits of using a travel advisor of any kind cannot be overstated: they provide much-needed support during an often overwhelming planning phase and can save travelers hours of planning.
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