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Charging FeesOctober 1, 2008 By: Joe Pike Home-Based Travel Agent
How to do it without losing business
NOWADAYS, AGENTS ARE PRACTICALLY FORCED TO CHARGE FEES FOR THEIR SERVICES. The easy scapegoat for this—and rightfully so—is the airline industry. Once the airlines cut commissions in 1995, many travel agents implemented a fee structure for their services.
Other agents, however, waited, fearful that such fees would scare potential business away. But today, the airlines still haven't wavered on their now 13-year-old decision to cut commissions, and in a weak U.S. economy, the cost of running a business is higher than ever.The Art of Charging a Fee
"I started charging fees way back when the airlines cut out our commissions, and I was terrified of losing clients," says Marjorie Agriss, a home-based agent affiliated with Altour Travel. "But my clients surprised me. Most are savvy New Yorkers who had read about what was going on, and were disgusted with the airlines, and were happy to pay for my services. Now my fees are a lot higher, and I charge for many different services, and nobody even thinks about them anymore. It's just the price of doing business, like any other business."
Kit Hoagland, of Frosch Travel in Houston, agrees. "Working from a home-based office is a working dream for the capable agent," Hoagland says. "It is the very rare client who questions or begrudges payment of my fees in return for a veritable Fort Knox of knowledge, years of invaluable expertise and the willingness to be their personal 'travel terrier.' If there is a danger of losing business due to charging fees—is that business wanted or needed? Most clients today realize that the days of travel agent commissions across the board are fast approaching a bygone era and that professional fee-for-service is the current byword."
Home-Based Travel Agent surveyed some successful home-based agents and found that many not only had advice on how to charge fees without losing business, they were actually skilled enough to make their clients grateful for paying them.
Earn the Fee
Karen Lacy, a home-based agent in Los Angeles who is affiliated with Altour Travel, says the best way to show a client the fee is worth it is to earn it.
"There is always some risk of losing clients over service fees," she admits. "To minimize this risk, agents need to make themselves indispensable to a client. Return information promptly and accurately. Offer insight, attention and extra perks they could not possibly get on their own."
According to Lacy, the money clients have to pay is not nearly as valuable as their time. Therefore, they are willing to fork over a little extra so long as it means everything has been taken care of for them from A to Z.
"The smart travelers will realize they saved money by not spending two hours trying to shop or book via the Internet," Lacy says. "My own goal is to reply to e-mails and phone calls within 30 minutes, even if it is just to say, 'I have your request and will work on it.' If you don't get back to people right away, they will find the information online. They probably won't do as well for themselves as an agent would have.
"But agents need to earn the fee," she stresses. "I always go the extra mile for clients, monitor and secure upgrades on flights, clear waitlists, get amenities at hotels, and so on. Those are valuable perks and they come at a price."
When and How to Ask for Fee
M.T. Herrin, also of Frosch Travel in Houston, says she doesn't even charge the fee until the clients come home from the voyage. The fee is loosely discussed during the planning stages, but she never collects until the trip is over.
Once the client has already had a pleasurable experience, she says, the fee becomes easy to collect.
"You'd be surprised how many people love helping their travel agents, love giving you more money as long as it means you will continue to do a great job," she says. "You are making changes in their lives by sending them on vacation, so they understand the changes in your life, in your job and those changes sometimes involve having to charge more fees."
And a little charm doesn't hurt either. Herrin suggests that when discussing a fee, don't simply blurt it out, but slip it into a casual conversation. Do it with confidence, she adds, and spice it up with a little humor and a flattering remark.
"You don't just say, 'Oh, by the way, it's going to cost you more because of this fee and that fee,'" Herrin says. "Instead, you say something like, 'This is going to be a little extra, and that might cost a little more, but, hey, you're worth it, right?'"
In Herrin's experience, repeat customers are the ones more likely to pay the fees because they have already built a rapport with their agent, and already know that the agent's services are worth the extra cost. However, Ray Cyrnek of Raymond-William Travel Consulting in Los Angeles, which is also affiliated with Altour Travel, says that in most cases, he will do the opposite.
"In most cases, when I know that a very loyal client is serious about a booking, I don't charge a fee if I receive an override commission on a tour or cruise," Cyrnek says. "However, with a new client, I do require a commitment fee depending upon the request with full disclosure as to what I will do for them. This commitment fee is applied to the booking, but non-refundable in the event that it does not come to fruition. I also charge a booking management fee for extras, like dinner reservations, theater tickets, waitlists and on and on. My fees are fair and flexible and depend upon the situation. I am not concerned with losing business because of the fees that I charge. It is not worth my time and effort to go through all the motions and not get the booking as the end result."
To find out how travelers feel about agent fees, we talked to Joe Sharkey, a well-known freelance travel writer for The New York Times, author of an air travel-related blog called "High Anxiety" and an in-progress book on air travel.
"I would gladly pay a fee, say, of $25 to $50 per itinerary or maybe more for complicated trips," says Sharkey, who flies about 100,000 to 125,000 miles a year. In exchange, of course, he would expect "a travel agent who knew me personally, understood my needs, and was able to book the best fares and hotels while paying attention to connections, frequent flyer advantages, and also keep track of my various frequent flyer programs and hotel and car rental loyalty programs.
"All of the travel management companies that I'm aware of specialize in corporate accounts, and they aren't interested in me as a client," Sharkey continues. "Given the increasing complexity of booking, with reintroduction of airline minimum-stay requirements and with the sharp reductions in domestic flight capacity, I would think that there would be opportunities for a smart independent travel agent to get new clients from the growing ranks of independent contractors who are on the road frequently. But they'd have to provide customized service. I used to pride myself on being able to do all this myself. Now it's becoming too complex."