Travel Agency Fees Gain Traction

If you still are struggling with the discussion about charging fees, it’s time to fully own the value of your expertise, the experts say. 

Sean Fidelli, co-founder of TheRomanGuy.com in New York, learned the value of charging fees when he first worked as a tour guide at the Colosseum in Rome. “Every once and a while, someone would come up and ask for something we didn’t provide, like recommending a restaurant. I would spend extra attention on them, and they would come back.”

Today, his company (founded in 2012) charges a $79 fee for each day of a 10-day curated itinerary to Italy, on top of the actual cost of the trip. Clients also can add on experiences, like private Vatican tours ($89).

“Sometimes people stop and think. They have to get over the fee. But when we tell them we are going to take the guesswork out of their entire trip and give them a cell phone on arrival that will allow them to call us whenever they want, we win,” he said.

“It’s a confidence issue,” said Emily Peters, a former business development manager at Montrose Travel, Montrose, CA. “Agents need to establish their own particular brand, and how they are going to communicate their value to their clients.” She sees this struggle especially with agents new to the industry, who have entered the trade at a time when free online booking tools are so pervasive that’s all they know. “If you come into the client discussion with an online travel mindset, then you’re competing for the lowest common denominator.”

“Good travel consultants know their niche, are familiar with their destination, and give their traveler a sense of security by having their back every step of the way,” said Jackie Friedman, president of Nexion, a full-service host travel agency based in Irving, TX.

Fidelli said he finds small business owners, empty nesters and working parents are a lucrative niche. They don’t balk at his fees because they are going on more complex trips and value their time as money. He also sees more adult couples traveling as groups, so they can split the fee, because he only charges per trip.

As agents live and learn, their confidence and experience increases, Peters said. “There is something about the three-year mark, from an anecdotal view, where we start to see people find their groove, specialize, start to see themselves differently and take themselves more seriously. I just wish we could accelerate that three-year cycle, so they don’t have to wait till their third or fourth year.”

Family travel niche perfect for fees
Kyle McCarthy, editor of the Family Travel Forum in New York, believes agents specializing in family and multi-generational travel should feel very confident about the value they deliver and fees they charge.
 
“Family travel is complex. It requires working with and satisfying multiple people, finding connecting rooms at a hotel if someone has small children. Try doing that with an online travel agent,” McCarthy said. “If there is an older grandparent, or in-laws meeting up from another destination, you have to align flight arrivals. None of this is easy for the self-serve market.”

McCarthy said fees are more acceptable for family trips to Europe. “Older European hotels are great value, but sometimes the rooms are too tiny for families of four or five. Some will have rooms at the top of the hotel set up specifically for families. I call them hidden gems. You won’t find this information online. You need an experienced travel agent.”

Fidelli noted how when travelers are booking multi-city trips in Europe, having a good travel agent can save lots of time, and remove a lot of headaches. “When you look at the European train websites, they’re not easy to book on. It’s not just point, click and buy.”

Nexion’s Friedman also noted how destination weddings, honeymoons and family/multi-generational travel are markets where agents can feel more comfortable charging fees, because of the value they provide for these complex, important vacations. “It is completely appropriate for a travel consultant to charge fees. Their time and experience are worthy of compensation, and I’d encourage them to become comfortable with that concept,” she said.

Your current hourly salary may shock you into fees
Peters, who is writing a blog to help agents introduce fees, recommends reviewing your commissions earned over a 6-12 month period. When they figure in their 20% host agency split and divide the number of hours they work, many agents are often shocked by how little they are paying themselves per hour, she said.

She suggests charging an upfront “Plan-to-Go Fee” that could be applied to the total cost of a final booking to reduce the amount of time spent with “tire kickers,” who use an agent’s expertise and then book online themselves.

Other fees might include either a flat rate or hourly fee for consultative and trip management services, a retainer offering unlimited services over an established period of time, or a menu of service/transaction fees tied to specific activities, like booking air or making itinerary changes.