As travel advisors eagerly anticipate the industry’s recovery, many are considering implementing service fees for their agencies.
While this may seem like a daunting prospect for advisors who are unfamiliar with charging service fees, Tiffany Hines, owner of Global Escapes, and Jamie Jones, COO of WhirlAway Travel, discussed on TMR's MasterAdvisor series what advisors should know when shifting their business model, and how to best present it to their clients.
1. Know your value
For travel advisors who are on-the-fence about charging fees, it’s important to know your value.
“It’s not just about charging the fee,” said Jamie Jones. “It’s about the one-on-one consultations with clients, the questions you’re asking, understanding their travel history, their interests, likes and dislikes, and what their day-to-day is, because we’re not just booking travel, we’re creating memories that are going to last a lifetime.”
“We’re worth every single penny that we charge, and probably a lot more. We provide our clients with a breadth of knowledge and expertise, and we should charge for the services we provide.”
“It’s pretty simple, if you work for free, it’s a hobby not a profession,” said Hines
“Most people who have worked in the industry for an extended period of time, have a wealth of knowledge [and] numerous connections around the globe, and that is worth something. It’s also about positioning yourself as a professional,” she said, comparing service fees for travel advisors to those of doctors or attorneys.
“My time is valuable, and I take my job and my knowledge very seriously.”
2. Be confident in what you can offer
Advisors might find the idea of suddenly charging a fee for their services difficult to grasp, but they need to really take stock of all that they do for their clients and be confident enough in what they offer to demand fair compensation.
“We’re really trying to personalize and customize these travel experiences, whether it’s a cruise or tour, we’re helping them curate an experience that’s very unique and special to them, and that’s where our value comes into play,” said Jones.
“This is our livelihood and our passion, and we bring that value to our clients. We deserve to get compensated for that, that’s why they come to us, and not search online.”
While advisors might be weary of using different terminology when presenting the fees, “you can call it whatever you want, but it’s really about how you present yourself, your services, and what you can do for that client.”
3. Be ready to explain what you bring to the table
One important factor of shifting to this type of business model, is how to most effectively present the idea to clients.
“When we talk to people initially, what we do is let them know that we do charge fees,” said Hines. “We want to be very transparent upfront, we don’t want to waste their time, and we certainly don’t want them to waste our advisors’ time if they’re right off-the-bat not interested in paying a fee.”
“We’ve gotten to the point now where we only have to spend 15-20 minutes with somebody explaining what we do and how we can solve their problem. Because that’s what you’ve got to remember, they’re coming to you because they’ve got a problem, either lack of time, lack of knowledge, or they’re not quite sure of what they could be missing and they don’t want to pull the trigger on their own.”
“You really have to sit down and list out all the things that you do, and I guarantee by the time you really think about it, you’ll have a list of 12-20 things you do for every itinerary that you often take for granted.”
4. Knowing how much to charge
There are plenty of reasons for advisors to charge fees for their services, but how much they charge may differ depending on a variety of factors.
“Our fees start at around $325, but it really is situation by situation,” said Hanes.
“We have a fee guideline… but we always want to be fair. The way we charge is really dependent on how many people are traveling, the scope and complexity of the vacation, how many [destinations] are involved and what modes of transportation are involved.”
“There’s a lot that goes into planning an itinerary for somebody.”
Jamie Jones uses her initial client consultation to gauge what factors will be involved in planning the trip, and determines how much to charge.
“Our minimum fee is $300, but can usually be a couple thousand depending on the complexity of the trip,” said Jones. “So when we do that consultation I need to know if the party needs multiple hotels, multiple transfers, will they need dining reservations or spa appointments? We don’t just make arrangements for our clients that are commissionable, we do everything for them.”
“I recommend keeping track of your hours internally, because part charging fees is understanding what your hourly worth is. I think many of us find that we spend a lot of time into these bookings and it’s frustrating that we don’t get paid a lot, and when you’re actually getting compensated for the work that you’re doing, you feel a lot better about yourself, and you feel better about helping the client when they need something.”
The fees also serve as insurance in case clients decide to cancel at the last minute.
“If somebody pays that fee, you do all that work setting up their trip, and they walk away, you’re still compensated and not as reliant on commissions,” said Jones.
5. Don’t be afraid to start
Hines said that for those who never considered it before, now is a great time to revisit the idea of adopting a fee model for their business. “I think right now is the absolute best time to completely revisit your business model.”
“The number one problem we face as travel advisors is earning our clients trust,” said Hines. “Right now, it’s important to be very honest with your clients, and let them know that, in essence, your business has burned to the ground. Everybody is aware of the state of travel right now…so it’s a really good time to completely start fresh.”
She also said that charging fees may actually serve to reassure clients that you’re on their side.
“Fees are not for bookings, they are for you. Commissions are for the things you do for the suppliers, so if you’re solely working for a commission, what that potentially tells a client is that you may or may not have their best interests at heart. If you charge a fee in addition to the commission you earn on the backend, it lets them know that you’re working for them.”