Part three of an ongoing series about how agents are implementing service fees.
For Margi Arnold, owner of Denver-based Creative Travel Adventures, there is no one-size-fits-all approach to service fees. Depending on what makes sense, she may charge $1,000—or she may charge nothing at all.
Arnold, whose specialties include luxury travel, destination weddings, honeymoons, and corporate incentives, has learned to approach fees in a way that helps her weed out “looky lous” and focus on the type of business that makes the best use of her time.
“I don’t charge for everything, but I do if it’s something that will take extra time, say a destination wedding, incentive, or customized itinerary,” she said. “I also charge fees to new clients who come to me through my website. It helps me determine if they are serious. If it’s a past client who’s been with me for a long time, I might not charge a fee.”
While she normally charges a fee of $350 to $500 for a destination wedding, depending on the size of the group, there have been situations where she waived the fee in order to secure a desired resort booking.
“I did this recently for a Sandals group,” she said. “In that case, I wanted the booking to increase my numbers with Sandals. When I told the clients I would waive my fee, they were thrilled. It made them feel good and it got me the booking I needed.”
Where Arnold charges the highest fees—usually in the $1,000 range—is for corporate incentive travel, a market that requires extensive customization and is accustomed to service fees.
“In the case of incentives, my fee is actually on the low side,” she said. “However, it’s lucrative because I’m also collecting the usual commissions.”
Shift to niche
Arnold’s approach to fees has evolved in tandem with a major shift in her business focus over the years.
“When I started 18 years ago, I tried to be everything to everybody,” she said. “Now I’m a niche specialist. I will refer people to someone else if it’s not my specialty. I focus on what makes sense to me.”
Arnold can do this because she is a one-person agency, so she makes all the decisions, and also because she in the enviable position of getting more business leads than she can handle.
“My website gets me a ton of business, so I have to narrow things down,” she said. “Otherwise I would be working all the time. This winter I was able to spend my weekends skiing.”
Charging fees also helps her avoid spending time on tasks she would rather not do.
“One lady came to me and asked me to book her Eurail tickets,” she said. “I told her what I would charge, and that it’s her decision to use me or not.”
Another factor in whether or not to charge fees has to do with the level of expertise Arnold has in a certain area and the value she feels she is bringing to her clients.
“For example, when I first started selling travel to Europe, I waived fees while I was learning and developing relationships with vendors,” she said. “Now I’m getting people great fares through my ticket brokers and I am charging fees.
While Arnold can now pick and choose her clients, that was not always the case. She credits her success with hiring a website and marketing specialist who was able to help her turn a struggling business around. Along with designing an effective website that generates at least half of her business, the specialist helped Arnold form a game plan that includes a monthly e-newsletter sent to clients.
“I was told that no matter how busy I am, I must consistently send out the newsletter,” Arnold said. “I was also advised that you don’t have to do everything—a blog, social media, etc.—but you need to pick at least two things and do them very well.”
While Arnold has had a website since she started in business, she made the initial mistake of putting economy ahead of quality.
“Your website is a big deal and should never be done on the cheap,” she said. “My original website looked great, but the person managing it did not know how to transfer the business to me. The phone stopped ringing and I almost had to close my doors.”