Understanding and Monetizing Your Value as a Travel Professional

Amy Cornette, CTC

 

I decided to start this paper off with a laugh, but is this really funny? This type of consumer behavior can cause a lot of irritation and frustration for travel agents but those true travel professionals know how to avoid this type of stress altogether. They are confident in their value, they know their product (themselves) and charge a fee for their services. Becoming a fee based agency will eliminate the stress from this type of consumer behavior from your business.

As part of the Nexion business development and education team, travel agents come to me for guidance, and there is one question that I am frequently asked: “When a client comes to me with a price found online, and I am only able to match the price or if my price is higher, why would they want to book with me?” This is a great question and one that all travel professionals must be able to readily and confidently answer.

When you are asked this question – and it’s a matter of when and not if – this is when you have the opportunity to sell yourself, show your value and secure the booking. As travel professionals, you are not only selling travel, but you are also selling yourselves. So know your product! [1]

Over time consumers have learned how valuable travel agents can be when planning a vacation. The following statistics are from a large study published by ASTA. These are some very encouraging numbers that prove the perceived value of travel agents. Over half of leisure travelers who used travel agents (55%) believe vacations planned with them were better than those organized without their assistance. When asked why they chose to use a travel agent for leisure travel, three in four indicated they did so because of the convenience of having an expert do the planning for themselves (76%) and because they believe travel agents have the knowledge of destinations and travel service suppliers to make the best recommendations (75%). Seven in ten travelers who used a travel agent (68%) plan to use one again in the next 12 months. [2]

The general population knows your value and so should you!

The term agency is defined as a business or organization established to provide a particular service, typically one that involves organizing transactions between two parties. The agency provides a service and is typically compensated for those services. For example, it is tax time and you take your taxes to a CPA, they will provide their services and charge you a fee. So why do some travel agents expect to work for free? The travel industry has evolved, now agency service fees are the norm and clients are willing to pay. In fact it has been shown that they even expect to pay a fee and are more comfortable working with a fee based agency. The majority of all ASTA agencies (88%) charge service fees. [3]

Fee based agency owners and agents know their value and have the confidence and business acumen to succeed. On average fee based agencies receive between 40%-60% of their income from service fees. I’m going to share a couple of quotes I received recently from agents who operate fee based agencies.

“Consistently between 25-30% of my income is from service fees. As I mentioned, I’m raising them February 1st, so that will increase, bringing in even more.”

“Just looked at my commission report for the past 2 weeks and my service fees are almost $1000. That’s the power of knowing your worth and putting value to your service.”

Let’s look at how you can get on your way to monetizing your agency.

Getting Started as a Fee Based Agency

There are 4 areas to evaluate and implement when getting started as a fee based agency:

• 1. Understanding Your Value
• 2. Fee Logistics: Who, What, Where, When, Why and How
• 3. Overcoming Objections
• 4. Be Ready, Be Confident

1. Understanding Your Value as a Travel Agent

The value of an agent is revealed when there is proof that working with a travel agent truly enhances the travel experience.

To begin understanding your value, ask yourself, “Why do clients come to me?” Do they come to you for your advice, for information, for your knowledge of the travel industry and destinations, and because they want an expert to do the work? That expert is YOU, and you should understand and be able to articulate your value.

Other questions to consider.

• Why am I worth charging a fee?
• Why is knowing my value and being able to explain my value important?

Everyone has a different value proposition. Here are five ways to get you thinking about what yours are:

I am valuable because …

Relationships, Provide Best Value

• I will get to know you and will create a trip customized for your own unique vacation. I will select the best products and provide my professional guidance along the way.

Save Time, Convenience
I am a one-stop shop for every aspect of your travel needs. I will assist you with all components of the trip in one place and give you pricing that is clear and concise, saving you countless hours of online research.

Industry Knowledge, Clout
My relationships with supplier partners allow for best value, amenities and direct assistance. I know who to trust and which products to offer. I will also offer you travel insurance to protect your investment.

Destination Knowledge, Consultant
By booking with me, I will give you direct access to me as your personal travel consultant. I will give you tips about your destinations that only a travel expert who’s experienced these places could give. I will qualify you based on your needs and wants to ensure you have the vacation of your dreams, and I’ll follow up upon your return.

Advocate, Expertise
I will monitor your bookings for any schedule changes and be there to assist if an issue should arise. I will ensure you have the proper documentation you need, advise you of any special travel information based on my knowledge of the destination and be there to answer any questions you may have. Be ready, be confident, and most of all, know your value. [1.2]

As travel professionals, you are not only selling travel, but you are also selling yourselves. So know your product.

2. Fee Logistics: Why, Who, What, When and How

Why charge a service fee?

• The industry has changed dramatically over the past 20 years. We first started seeing service fees as a way for agencies to offset revenue when the airlines cut commissions. At that time the words “service fee” were new and made agents apprehensive where now it is the norm. Fee based agencies have two revenue sources; commissions and fees. This dual approach will help protect agencies from any future reduction in supplier commissions.

Who do I charge?
Everyone! I hear from some agents who say that they tell their client that they charge fees but will refund the fee or apply the fee to the booking upon deposit. You are not fee based agency if you are not keeping the service fee. This practice sets the precedence that you are not worth the expense. There will be certain circumstances where you may waive the fee depending on the situation. You must be consistent but with some flexibility.

What to charge for and how much to charge?
There are two types of service fees; Transaction fees and Consulting fees.

Transaction fees are fees for providing a specific transaction. This type of fee is typical of a corporate travel agency.

Transaction Fee Menu Example [3.2]:

• • $38 for an airline ticket

• • $19 for a rental car only

• • $22 for a hotel only

• • $28 for a rail ticket

• • $43 for an air/car/hotel package

• • $41 for a cruise

• • $49 for a package/tour

• • $105 for trip planning FIT

 

Consulting fees (also known as Professional or Designer) are fees for providing your professional knowledge, services, advice and support including processing the booking transactions. This type of fee is typical of a leisure travel agency.

An agency may charge anywhere between $50 – $500 for the consulting fee depending on the type of trip and number of people traveling

When and how to initiate the service fee conversation?
The best practice is to bring up the subject of fees with your client once you have established a rapport and have a basic understanding of what they are asking you to research. Once you are established as a fee based agency and have repeat clients this will become easier as your clients will be familiar with the process.

Review this example of how to initiate the fee into the conversation: “Sure “John”, I would love to have the opportunity to book your dream vacation but first I want to let you to know that I charge a fee for my professional services.” Then share your Consulting fee template with your client.

Follow these strategies for implementing service fees:

• • • Set fees and do not deter from those fees.

• • • Acknowledge the fee at the beginning of the sales cycle.

• • • Keep a positive tone and focus on your value.

• • • Never apologize for charging a fee, you are a professional.

• • • Be confident.

 

How to collect the service fee?
You may choose to accept cash, check or credit cards.

For credit card payments you will need to have a merchant credit card processing account or use a credit card processing service. Examples of a credit card processing service are PayPal Here and Square.

Keep in mind that when collecting funds directly from a client you must be in compliance with any “Seller of Travel” laws in your state. There are currently six states which require registration as a seller of travel regardless of where the agency is located: California, Florida, Hawaii, Iowa, Nevada, and Washington. [4]

3. Overcoming Objections

You must learn to overcome objections; yours and theirs!

The following are examples of common objections that typically arise when first establishing a fee based agency.

What if my market/area will not support fees?

• Remember it’s not about where you are it’s about where you are sending them. Business is business no matter the location that is especially true in our virtual world. We have agents in very small towns and isolated areas charging fees just the same as in larger metropolitan cities.

How can I compete with the internet?
You don’t! The internet is a tool, you are the professional. We will review examples of overcoming this objection in the next section.

What if a client refuses to pay the fee and I lose the booking?
This is a fact that you may have to face. You may lose a booking but those people were probably not going to book with you in the first place. Shoppers may rebuke the fee and go elsewhere, but a true client knows your value and will pay the fee.

4. Be Ready, Be Confident

Be ready, be confident, and most of all, know your value!

Practice, practice, practice…..Anticipate the most commonly asked questions and be prepared with your answers. Some of the most common questions are: Why not just book online? Why do you charge a service fee? Why use a travel agent?

Why should I pay a fee and book with you when I can book online?
The Internet is a valuable resource, but it cannot replace the expertise, guidance and personal service of a travel agent. I will cut through the travel jargon, read the fine print and make recommendations based on your individual travel needs.

Why should I pay a fee and book with you when I can book online?
I focus on your needs and budget and will present incomparable travel experiences.
When booking online you will click what services you want, you are given a price and are asked for your credit card for payment. Transaction ended.

I don’t stop there. I will monitor your bookings for any schedule changes and be there to assist if an issue should arise. I will ensure you have the proper documentation you need, advise you of any special travel information based on my knowledge of the destination and be there to answer any questions you may have. I will follow up with you upon your return to ensure that you had the vacation of your dreams.

Why do you charge a fee?
My agency is a business and like other business we must charge for our services to remain in business. I have been educated in my field and must charge for my expertise.

I will invest my time, knowledge, and expertise in creating a vacation experience designed especially for you. Most of my clients will agree that a service fee is a small price to pay to ensure that your travel is personalized and will be booked by a knowledgeable and experienced travel agent.

Why should I use a travel agent?

Product Knowledge:

• My relationships with preferred suppliers allows for better deals, amenities and direct assistance.

Destination Knowledge: I will make recommendations matched to your needs based on personal experience.

Industry Knowledge: I can translate industry terms, codes, rules and regulations into information that is clear and easy to understand.

Safety: I receive current updates on health and safety travel advisories and can advise you on your destination.

Convenience: One stop shop for every aspect of your travel needs.

Save Time: I will save you countless hours of research.

Save Money: I will work to get the best value for your money.

Traveler Advocate: You will have direct access to a personal travel consultant, if an issue arises I will be there to assist you.

Clout: I am a Certified Travel Agent and a Member of the American Society of Travel Agents. Examples: ASTA, CTA, CTC, CTIE, ACC, MCC, EMCC.

Best Value: I will provide you with the best value by creating a unique vacation customized just for you. I will match the best products and services to your needs and provide my professional guidance along the way to create your dream vacation.

By understanding your value and monetizing your agency you have the foundation for a successful travel business. Now repeat after me “I am worth it.”

 

Sources:

[1]: Amy Cornette, “5 Ways to Show Your Value as a Travel Agent,” Travel Pulse, July 23, 2015 http://www.travelpulse.com/opinions/blog/5-ways-to-show-your-value-as-a-travel-agent.html

[1.2]: Amy Cornette, “5 Ways to Show Your Value as a Travel Agent,” Travel Pulse, July 23, 2015 http://www.travelpulse.com/opinions/blog/5-ways-to-show-your-value-as-a-travel-agent.html

[2]: ASTA/MMGY Global, “Value of Travel Agents Executive Summary,” ASTA, March 10, 2014.

[3]: ASTA, “2011 Industry Averages,” ASTA Service Fee Report, 2012

[3.2]: ASTA, “2011 Industry Averages,” ASTA Service Fee Report, 2012

[4]: Anolik Law Group, http://travellaw.com/page/travel-law-faq