Wednesday, May 2, 2012

Do You Charge Me a Fee?

That is a standard question that travel agents get asked by prospective clients.  I am finding that the majority of today’s travelers do not understand how travel agents get compensated.  So I wanted to write and answer the question, “how doe a travel agent get paid?”

In 99% of the cases where I am working with a client on a particular trip, my services are free to the client (I will explain the 1% in a moment).  The travel “system” as I will call it, has a travel agent’s compensation built in and is invisible to the client.  For example, major hotel chains, cruise lines and even resort destinations such as Disneyland and Walt Disney World offer commission to travel agents as a way of saying “thank you” for bringing clients their way.  The price the consumer pays would be the same whether they used a travel agent or not.  Naturally there are benefits for using a travel agent, but that has already been addressed in previous posts.

So please understand that our compensation is being paid by the suppliers to us (the travel agents) there are no additional fees being tacked on to the consumer’s cost.  

But here is where the exception comes in, the 1% that I mentioned; airlines quit paying commissions to travel agents several years back due to their own economic issues.  So if a client is only interested in booking airfare through a travel agent, the travel agent has to charge a service fee in order to make any income.  Those service fees are discussed ahead of time so there are no surprises.  I personally charge a small fee unless the client has booked other commissionable items such as a hotel, rental car, cruise etc, in which case I waive my fee.

But please understand this one last point.  Almost every professional travel agent out there works off of commission only.  We do not get paid salaries.  So if you go to a travel agent for help with learning about a destination or a cruise and so on, and then choose to take that information and book it yourself, that professional just worked for nothing.  Travel agents have bills to pay and families to feed just like every other working person so please consider that before taking their professional advice and info and then rushing out to book something on your own because you think you can get a better deal.

I hope this answers the question.  Please feel free to ask other questions or offer a comment or opinion.

1 comment:

Matt said...

Bryan - thanks so much for explaining this! I'm launching a tour business and have been wondering how the relationship looks between tour operators and travel agents. I'd love to pick your brain a little bit. If you're up for that, please get in touch. You can reach me at my name @ Thanks - Matt