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Why you should charge service fees. Yes, you should.

Wednesday, August 19, 2020

Why you should charge service fees. Yes, you should.

It’s no secret that our lives are all in turmoil these days. Travel will never be the same, so perhaps now is the time to introduce service fees – if you haven’t already.

Sadly the days are gone when we could rely on significant and reliable commissions from suppliers. And clients of course always assumed our services were free.

Today not only have commissions been compromised, but we can and should build vacations that include more than ‘just’ the package or the cruise – after all, clients are looking for more immersive experiences.

Complex FITs, transfers, restaurant reservations, RV rentals, private tours and more are all part of our tool kit – some of which is non-commissionable. It’s estimated that travel advisors can undertake 12 to 20 different transactions for a single booking. So? Time to introduce deserved revenue for you.

What do you call it? Some travel advisors are reluctant to call it a service fee and prefer ‘consultation’, ‘professional fee’ or ‘research and design.’

Travel experts all agree introducing a fee structure changes the advisor-client relationship to one of more mutual respect (not to mention giving the advisor more personal pride, confidence and motivation).

And explaining to a new client that there will be a fee involved may rid you of the tire-kickers and the shoppers who want you to do all the research for free – so they can go away and book online.

What to charge? Your host agency may have a suggested fee structure; and you should check with some of your fellow ITAs as to what they charge. Some do it on a per-booking basis, some do a percentage of the total tour price (20% not unusual), some even have an annual fee for frequent travellers.

“Don’t be surprised to learn even within your host agency there are a variety of rates,” my colleague Shelby Donley, former president of Camelback Travel in Phoenix and now VP, Luxury Services on the leisure leadership team here at Vision and Direct Travel told me. “Just the way stylists at a hair salon may differ in their rates.” Camelback, she adds, charges four-digit fees.

No doubt COVID-19 is the perfect time to introduce fees.  Sadly, there may be many fewer travel advisors – but on the good news front there looks to be quite a bit of pent-up demand. It’s a great time to reinvent yourself. Just because you love what you do, it shouldn’t be a hobby.

Next month we’ll get to the nitty gritty:  how to break the news to your clients.

 


 

Lynda Sinclair_G3732_ppLynda Sinclair, CTM, is the Senior Vice-President – Leisure at Vision Travel, which has an ever-expanding and vibrant program for independent travel advisors. With over 30 years in the Canadian retail travel industry Lynda says she “lives and breathes what goes on at the front line.” She can be reached at lynda.sinclair@visiontravel.ca.

 

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