To Fee or Not to Fee...

That is the number one prevailing question in the travel agency industry right now. Do we deserve to get paid for our time and expertise? Or should the general public expect us to give our consulting skills away for free?

Let's roll the clock back about 9 to 10 years ago. Some folks came into the travel planning industry and touted the idea that you should never have to pay any fees for booking hotels, airfare, car rentals etc. These new companies made it sound like you had been getting ripped off for years because you were walking into a travel agency office and sitting down with a real person, asking them questions, hearing their professional opinions and ideas and actually paying them a fee for that experience. Those new companies are what we refer to as OTA's in our industry. That stands for "Online Travel Agencies." The more famous OTA's are companies such as Expedia, Hotwire, Priceline and Orbitz.  These OTA's made it sound like you didn't ever need anyone's professional advice because you could go to their site, see every hotel in every part of the world (or at least they want you to believe you can), see the lowest price and simply book it yourself and save a lot of money. This basically lumped everything every professional travel person had done for years into this idea that they were nothing but middle men/women and order takers. So you could now avoid the middle person and place the "travel order" yourself.

These OTA's did a great job at marketing. Their "no fee" ads were causing hoards of travelers to run from professionals and turn to their one-stop shop for booking vacations, business trips etc. Mom and pop travel agencies were closing right and left because fees were needed to maintain employees, pay for office overhead etc.

A new breed of travel professional was born out of the ashes and I am not sure the big OTA's saw what was coming. Professional travel agents were learning to evolve with the change in market and many changed their work environment to where they too could operate without passing along fees and just live on whatever hotels, car companies and tour operators were willing to pay in the way of commissions. That's correct...hotels, car companies and tour operators pay travel agents commission as a thank you for bringing clients their way. And guess what...the large OTA's get commissions too.  They wanted you to think they were not a travel agent and you were cutting out the agent and therefore saving money, but guess what, they are middle people too and they get commissions and in many cases brow beat hotels and other travel related companies to give them even more than what most professionals would have ever received and then they turn around and kick some of it back to the consumer and call it "savings." You can imagine what that is doing to their relationship with hotels, resorts etc. But that is a story for another time.

Here we are now 9 to 10 years later and our industry is back stronger than ever and more and more travelers are turning to agents again because they are hearing that we no longer charge fees and they can still take advantage of our expertise, our experience and our relationships with key companies in the travel industry. And many have learned that when going through an OTA, you are taking on the role of the professional agent because YOU are selecting that hotel and YOU are choosing those flights and YOU are doing all of the research and YOU are left to deal with issues on YOUR own when you hit the "book now" button on their site.

So let's be clear of the difference between a professional and an OTA. A professional travel agent offers destination advice. They offer destination experience. They offer resorts that are vetted. They offer flights that actually exist with connections that make a vacation that much better. They offer great vacation value and experiences that make vacations memorable. They are trained and skilled in the art of travel planning. They are professional. OTA's are none of those...none.

And guess what...reading stuff on the internet no more makes you a professional travel consultant than does sleeping in a Holiday Inn Express. Reading things on the internet does not make someone a professional wedding planner or a professional interior designer or a professional style consultant etc.  And almost every person understands that going to a professional and seeking consultation or help will most likely result in a fee to cover their time.

So again..yes, we get commission from companies, resorts, hotels, car companies and tour operators that we sell. But we don't make a dime when offering professional travel advice to someone who then takes our advice and goes and books things themselves. Not a dime...until now. That is officially changing as of the posting of this blog. My agents and I love what we do. We love planning awesome vacations for families and clients and seeing their pictures and hearing their awesome stories. But we can't spend the time and energy we need on our valued current clients when we are chasing down info for those possible new clients who just want our free advice and have no intention of booking through our agency. We can't afford to work pro bono. So any new client coming to us as of now will be paying a "plan to book fee" that will be discussed with the possible client upfront. Many agencies in our industry have already been charging for their skill and expertise and it is time every professional agent is recognized as being a professional.  Professionals deserve compensation for their time.

Again...can someone go online and hit a "book now" button and do things themselves? Sure. Many do and will continue to do so. And they are on their own if things go wrong and if they made a poor vacation choice. But again, no one goes to a wedding planner and expects them to work for free and no one hires an interior designer and expects their advice and help for free. And so it is with us. No one should expect to call a travel agent and expect them to work for free. If you come to us and book your trip...we will discuss with you how that fee is applied, but coming to us and picking our brains for ideas and plans will cost you something if you take that advice and walk away with it.

So to fee or not to fee...that is no longer a question with my agents and agency.

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.

Travel Tip (Answer) of the Week

I really felt the need to address a question that I have been asked quite frequently. Sorry it is a bit longer than usual, but I felt some things needed to be said.

Understanding the Real Costs

I have been posting travel tips trying to help consumers see that there are sometimes hidden fees or extra costs associated with so-called "great travel deals." I just posted a new video earlier today again explaining that there are most likely some asterisks associated with really good deals that you need to read and understand before you get into the booking process.

I came across a so-called deal today that is a great example of what I was discussing. Here is the headline for the special:

$107 & up -- Las Vegas 3-Night Packages w/Air, incl. Taxes^*

Notice the asterisk??

Now here is the fine print associated with that asterisk:

^* Terms/Conditions:
Offer based on a buy one (1) air/hotel package, get one (1) round-trip companion airfare for free. Minimum two (2) night, two (2) person air/hotel package required. Companion travel must be on same itinerary as regular fare passenger. Must be purchased by July 22, 2009 for travel completed by January 31, 2010. Offer not available Dec. 11–14, Dec. 30–31 and Jan. 1–2, 2010. Prices do not include PFC, segment tax or Sept. 11 security fee of up to $10.60 per segment. A convenience fee of $14 per passenger will apply when booked on allegiantair.com. A convenience fee of $14 per passenger, plus $10 per segment, will apply when purchased through Allegiant Air call centers. When purchased at the time of booking, a first checked bag fee of $15–$20 per bag, per segment. and second checked bag fee of $25 will apply per person, per segment. If purchased at flight check–in, a fee of $35 per checked bag, per person, per segment will apply for the first two bags checked. Additional higher fees will apply for three or more checked bags. A segment is one take–off and one landing. Fare rules, routes and schedules are subject to change without notice. Restrictions apply. Offer not valid on previously purchased tickets.

If you look through the fine print, you will see that additional costs will apply and several others that most likely will apply depending on how you book and how many bags you check on. The actual price could be as much as $100 more per person once you add in the extra fees that the headline does not tell you.

So...just be aware of these fees and it is always a good idea to use a professional and reputable travel agent (shameless plug..ha) to help you understand what a trip will cost well before you get to the point that any payment is made.