How Travel Advisors Can Compete with Costco

How do you compete with a company that’s established and well-liked, known for great prices, and offers customers a 4% rebate on the travel they buy?

Travel Market Report asked our readers (travel advisors) how they respond when the customer says, “I can get that vacation cheaper at Costco.” They replied with a host of tips and insights on how to go up against the retail giant and win.

“I had a client send me a quote from Costco for Hard Rock Riviera Maya, asking if I could beat it,” said Helen Prochilo, of Promal Vacations. “I looked at the flights she opted for and the return flight home left at 7:30 am. I asked her how she would like leaving her hotel at 3:30 am to get to the airport. She had no idea how far it was; I explained she was an hour away. She ended up changing her resort and booking with me. Experience with someone who knew the destination beat out price.”

Teri Hurley, from Endless Love Travel, had this to offer: “If you make it about price, it’s about price. I make it about customization, specialization, connections and service. It’s like saying I am shopping for a car. A car is a car. But what you get by brand model is totally different. Costco people are not my client. So, while I would not say I compete against them, I will say, this is about finding your market niche and courting the clients that fit your business model.”

Another tip: “Yesterday, I had a client fall victim to an airline strike in Thailand. She was panicking, of course, so I did what we do: Dropped everything and made it right. She gets an extra day in Chiang Mai, covered by her travel insurance, and I get to make it a hiccup, not a nightmare, in her otherwise perfect trip. Costco can’t do that. Having your own personal ‘fixer’ who answers the phone at 4 a.m. is worth every penny,” said Mollie Knowles Ward of Troubadour Travel.

“I refuse to even enter this arena,” said Beth Eibler Johnston, Orenda Travel. “My clients come to me for outstanding service, unique travel experiences, and peace of mind. There is a huge difference between the value I offer and Costco price-shopping. (By the way I shop at Costco every week, just not their travel.)”

Loulu Lima, from Book Here, Give Here, said: “I’m all about showing my value. I don’t compete on price and I don’t offer price matches. I do offer white glove service that is unmatched by Costco or any online travel agency.”

Dan Chappelle, from The Wealthy Travel Agent, Inc., offered: “In most cases, your loyal customers will prefer to do business with you, but they do want to make sure they get the best value. There are tools and resources that can help you create comparable value, but it does not need to be equal in price or amenities.”

Also commenting about service, Scott Walters, of Go Away Often Travel-Family Vacations and Amazing Destinations, said: “I tell Costco shoppers that I am a Costco member, too! I follow the adage of money goes where money is treated best. Then I remind them of the lack of personal interaction I have at Costco. I ask them ‘Who do you see when you shop there?’ The person upon entry, at the register and on the way out. I ask, ‘Do you think they care about you?’ That tilts the table in my favor.” 

Joanne Hunt, of Pompton Plains Travel, simply stated, “The bargain hunters will not be converted and spending time and energy on them is futile.”

Being as straightforward as can be, Shelly Phillips, of Travel by That Girl, told this story: “One day when I felt a little crabby a man bluntly asked me, ‘What do you do that Costco doesn’t?’ I replied, ‘Well, I don’t sell chicken or toilet paper or flowers because I focus only on travel, people and memories — and I think that gives me quite the edge!’ He booked with me. You never know; honesty goes a long way!”

Nathan Boyle, of Cruise Aficionados , said: “Costco is ‘that guy’ selling cases of Girl Scout cookies out of the back of a truck. Sure, they are real cookies and cheap. But good luck if you break a tooth.”

Along the same lines, Scott Asplund, from Plenty of Fun Travel, commented, “I like to ask if they want an agent who last week was in the tire department. People want someone knowledgeable to handle their travel.”

The theme continued with Lisa Katz Lee, of Braemar Travel, saying: “It’s about customer service and experience. My 30 years of experience keeps clients loyal. I have found that clients don’t want to book with Costco, but they will ask about their pricing. I explain the negatives about booking with Costco and get the sale!”

Geoff Millar, of Ultimate All-Inclusive Travel, said: “We don’t compete with Costco; they are not our target market. Costco uses travel as a loss leader because they are in the business of selling memberships.” 

Russell Rusty Black, from Rangerruss Travel Adventures, LLC, concurs: “I do not compete with Costco. I emphasize service from a professional travel advisor and not with a tire salesperson.”

Kristi ZaverEmo, from Your Dream Escapes, explained more in depth: “I say, ‘Do you want to ask travel advice from someone selling toilet paper and roasted chickens last week or someone who travels extensively and offers personal advice and support?’ When they mention the Costco card, as that is usually the only difference, I advise I can’t match that, as that would mean that I work for free and I am not a non-profit. I also advise them that to get through on the phone line if you are booking new trip is quick, but if you have a question or want help with full itinerary (booking excursions, tours, destination advice, etc.), you will wait on the phone a long time and get help from call center reps, not a travel professional!”

Another take along the same lines, from Toni Day, of Adventures With Toni Tours: “Costco?! No thank you very much. I have only had one person ask for a price match on a trip package from Costco. My reply: ‘I do not sell travel in bulk sizes. When you’re ready to book a perfectly planned and customized trip where you’ll be treated like a VIP, feel free to call me back. Have a great day!”

Adrienne Sasson, from Rubinsohn Travel and Tikva Tours, said: “I ask the prospective client if they are looking at just price or if they are considering the value of their vacation. There is usually a pause. I explain I’ve been a travel advisor for over 20 years (this month is 23 years). During that time, I’ve built relationships with travel partners and destinations. Along with that, I attend educational seminars, listen to webinars given by destinations and travel partners, travel to the destinations, visit the ships and hotels. As a Signature Travel Expert, I have access to special amenities others can’t get. Most importantly, my clients are not just another number in the line. They are my VIPs who I take care of before, during, and after their vacation. I make sure hotels know they are coming and communicate special occasions. I don’t ‘sell’ the trip of the month because I am told to do so. I match their lifestyle with the proper vacation. No one at Costco is going to that. In the end, if they want to shop just price, then I am not the advisor for them. My time is too valuable and I need to spend that time with my clients who appreciate the value and personal touch I offer.”

And lastly, from Virginia Lee, of Leisure Travel with Fred & Ginger, Inc.: “You just can’t compete against Costco. Don’t try. I have clients that purchase thousands of dollars every month for rental properties so they use the cash rebate to pay for their trips. We cannot match that. Use your energy to develop your clients who appreciate your expertise.”