| The COVID-19 pandemic caught many travel professionals without having a structured service fee in place, and many ended up working hour after hour with virtually no pay for doing so. The benefit for consumers was that they realized how important it was to have an advocate in their corner, as most travel distribution channels were unable, or unwilling to try to resolve the chaos that mass cancellations and the closing of the travel industry world wide created. As a result, it is obvious that travel professionals need to have a well-thought-out service fee agreement to avoid the loss of income if and when disaster strikes.
The beauty of having earned a special niche or professional industry certification is that consumers are more than happy to pay for top quality advice that will offer a successful vacation experience. At this point, service fees are something every travel agency should use as a part of its overall revenue stream. Below are a few tips to consider when implementing or restructuring your professional service fees.
1. Airline Commissions and Cruise NCFs. Known as a “transaction fee,” agents generally charge a flat fee per transaction regardless of the dollar amount of the transaction. The amount of the fee is dependent upon your agency’s overhead, your business plan, and the amount of commodity transaction the agency performs. Understand that a transaction fee is a charge for completing a transaction, not a service fee that implies ongoing service. As an example, an airline ticketing fee does not include refunds, changes, or any other transaction type. The remaining tips below are some examples of commodity-type transaction fees.
2. Airline, Reservation, and Ticketing Fee. You charge a fixed fee for creating an airline reservation and issuing an airline ticket or E-ticket for a client.
3. Airline Reservation Change Fee. You charge a fixed fee for changing an airline reservation for a client.
4. Airline Cancellation and Refund Fee. This is a fee for cancelling and refunding an airline reservation on behalf of the client.
5. Hotel Reservation, Change, and Cancellation / Refund Fees. Handling motel, hotel, and resort reservations that have low commissions should also have a transactional fee attached to them.
Bonus Tip: Cruise Reservation, Change and Cancellation / Refund Fees.
Selling 3 and 4 day cruises and 7-day commodity type cruises requires that you charge fees to maintain profitability. As many agents learned during the pandemic, they were faced with cancellations, rebooking, and refunds without remuneration. Don’t get caught in this situation.
Each client will have different needs and expectations, so you should be crystal clear about your transactional fees and what is included. This is best done in a written document that the client signs, so you have a copy in the client file.
Contributed by TravelProfessionalNEWS.com. Check out the complete service fee guide.
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