In Canada, Selling FITs Is a Win-Win

FIT vacations are making a comeback in Canada, gaining popularity among travelers and Canadian travel agents alike.

For years, European-style package holidays, often built around charter flights, have been Canadians’ vacation of choice.

Now more Canadian travelers are favoring independent travel or FIT vacations, as they are known in the trade.

One beneficiary of the shift is Canada’s largest FIT wholesaler, Holiday House, which is seeing more agents than ever selling its a la carte travel offerings.

Choice, flexibility, commissions
“What’s old is new again. FIT is in vogue,” said Craig Canvin, vice president, commercial, independent travel, at TravelBrands, whose companies include Holiday House.

“With the proliferation of direct scheduled flights from Canadian gateways, convenient connections, competitive through-fares and frequencies, we are seeing more agents customizing their clients’ travel experience.

“Choice, flexibility and value seem to be the new mantra,” said Canvin.

Selling FIT instead of packaged holidays is a strategy that is paying off for a growing number of Canadian agents. Especially when combined with service charges, selling FIT is helping agents compensate for the loss in revenue from shrinking commissions on package holidays.

But it’s not only about the revenue. Planning independent vacations is also creating happy customers for Canadian agents and building customer loyalty.

Better prices & commissions
Travel agency owner Tony Fragapane of Voyages Concierge Deluxe Travel, a TRAVELSAVERS agency in Montreal, noted the advantages of FIT travel for agents and travelers alike.

“When I have a request for an all-inclusive [package holiday], I look at the package price, and then I see what price I can get the components for. When I succeed in matching or beating the package price, I can make 10% to 15%.”

Agents also can combine FIT components from different wholesalers, as the product is usually not exclusive to any wholesaler. “I choose the product that pays me the highest commission,” he said.  

What’s more, Fragapane said, depending on the destination, FITs are often cheaper for the customer – “Europe for sure, and also some U.S. destinations; Hawaii is often cheaper FIT, and California, also Barbados.”

Fragapane also pointed out that while package tour companies inflate prices during peak periods, such as Christmas and March break, FIT wholesalers usually do not, so the FIT option is often better for the client.

Revenue opportunities
Clever agents are learning they can increase their revenue by marking up prices on FIT vacations for travel to traditional package destinations.

“Agents can match what’s in the market as a package. It used to be the more senior, experienced agents who knew how to do this, but now we are seeing younger agents doing it,” Canvin said.

“And they are learning to sell the ancillary product, such as attraction tickets, and upgrading their clients to things like private transfers in the Mayan Riviera – small things that clients love and that agents make money on,” he said.

Flexible length of stay
For clients, FIT offers more flexibility, particularly in terms of the length of stay, whereas package holidays are usually of fixed duration.

That flexibility suits today’s travelers, according to Canvin.

He said that while seven-night vacations durations are still popular, they are no longer the norm. “We are seeing more weekend getaway trips, especially to the U.S., with shopping being the most popular activity.

“Ten-night vacations have been a huge success,” Canvin added. “Clients have figured out that they can take a 10-night vacation and only take six days off work.

“Island hopping in Hawaii, fly-drives throughout Europe, two-center holidays in Florida [such as] Orlando and the beach – this is all available through FIT,” Canvin said.

Competitive market
Fragapane predicted that selling FITs will become even more lucrative for travel agents as smaller wholesalers fight to get the sale by increasing agent commissions.

“We find that these smaller companies are hungry; they will negotiate,” he said.

In contrast, “package companies think everyone will accept their commission levels and pricing, because we have no choice,” Fragapane said. But “it’s not true,” he added.

Builds customer loyalty
Canvin said that selling FIT also creates a closer relationship between the agent and the client, because the booking involves more interaction and counseling. As a result, the client can see that the agent has added value, and this builds loyalty, he said.

“Through customizing their client’s itinerary, they can upsell, provide the exact room category or car type their client selects. The key is customization and counseling, building that relationship, which will create repeat clients and more revenue,” said Canvin.