Should I Start Charging a Service Fee?

You may have been asking yourself this question for years. But recent global events have forever changed the landscape of the travel industry, and it may be time to answer the question.

If you have chosen to move ahead with fees, you now might be facing the “Now what?” phase. To help you formulate a plan for how to implement fees for new and current customers, we turned to our experts…you!

One professional we consulted was Connie Miller, CTIE, Vice-President of Business Development, Montecito Village Travel, who will present a very informative and timely webinar, Service Fee Options for Today and Tomorrow, February 1 at 3:30 pm (EST). Connie will address approaches to finding the correct service fee structure, various options and their benefits, and strategies for presenting fees to clients.

Additionally, we recently sent a Facebook request for input on service fees, and, as always, you provided great insight! Industry veteran Rick Tennant, CTIE, Xanadu Travel, said, “I thought about charging fees long and hard, but, after all the time invested in booking in 2019 for 2020 to undo everything—either through cancellation or just rebooking to another time—I decided enough was enough.” We agree!

Here are the questions we posed and the responses:

What steps did you take to get started?

Scott Wismont, CTA, Rainbow Getaways: I updated my travel service agreement to reflect my travel research and planning fee. I also built a page on my site that explains the services I provide and outlines the fees I charge and why.

What was the most challenging? How did you overcome the challenge?

Scott: The most challenging part for me was determining the amount and what kind of packages I was going to charge a fee for. Explaining the fee the first time was awkward, but I felt prepared for it, having listened to how other agents approach it.

What type of fee do you charge? 

Scott:  I charge a research and planning fee of $200 per traveling party for most trips. For cruise and all-inclusive trips, I reduce it to $100 because the amount of planning is less. The fee is non-refundable and is due before any planning or research is completed.

Russell Knott, CTA, The Houston Travel Agent: For my luxury travel agency, I charge a tiered system of fees, allowing the clients to choose how involved they want me to be in their travel planning and designing. $50, $100, $250: while each level will take care of the client, the idea is to provide so much value in the $250 package that few clients choose any other package. By being their complete travel designer, we build a relationship with them in hopes to have them as lifelong customers. We showcase the value in our services and are upfront about the fees from the start. We take full payment at the beginning of the official planning process.

When and how do you initiate the conversation? 

Scott: When clients reach out about a trip, I ask them to schedule a 30-minute call to tell me what they’d like to do. In the last five minutes of the call, I explain the services I provide and introduce the fee. I also suggest the client review my website, prior to the call, so they know what to expect.

Rick described his process:

  1. Qualify the customer regarding what would be the perfect cruise or land vacation.
  2. Share with them my Travel Institute credentials, CLIA awards, destination training, and cruise line expertise. Then explain my complete process and provide a timeline.
  3. Ask if they want me to plan their next cruise or land vacation and spell out my fees. If they say yes, they sign a contract agreeing to terms, and we get started. If not, I cordially thank them and wish them the best.

How do you collect the fees?

Scott: After the initial consultation call, I send an invoice for the fee with my travel service agreement through TravelJoy. Once the invoice is paid, I get to work!

What advice would you give to others?

Scott: Charge a fee! We have a lot of experience that has value to our clients, and our time should be compensated accordingly. Speak to tenured agents who have been charging fees to determine what is the best way to do it and make the process your own. The more comfortable you are with the fee, the easier it is to bring up with the client. And remember: if clients turn their noses up at the idea of the fee, they are probably not the type of clients you want to work with.

And now, from a host agency perspective: Penny Martin, with Canadian host agency The Travel Agent Next Door, says TTAND offers a course for its independent contractors. In it, agents are coached to change their mindsets so they can showcase their value. The course includes a resource area with letters to send to clients before the consultation takes place. Upon TTAND’s attorneys’ recommendation, ICs are advised to send an online fee-authorization form to clients first. Once the signed form is received by the IC, the trip planning can begin. For current and loyal customers, ICs are advised to send a letter stating they will be charging a fee going forward. The overall feeling, Penny said, is that the clients are more sympathetic now and will not refuse to pay the fee. Penny’s advice: Realize your value. Be confident in charging a fee.

Thanks, everyone! As you can see, there are several ways to go about charging fees. At the core of it all, however, is that you must see your value first and believe in what you bring to the table. Your knowledge, expertise, experience, and, very importantly, your Certification with The Travel Institute set you apart and raise your value to the consumer.

For more in-depth coverage of this topic, register immediately for Connie Miller’s webinar Service Fee Options for Today and Tomorrow. If you have access to our Premium Library, you will find several other recorded webinars and white papers on this topic.

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