Most people (and most travel agents for that matter) think of travel agents as salespeople. They sell something (i.e. they make a booking) and they get paid a commission.
That’s true as far as it goes, but travel agents, especially home-based travel agents, can be much more than order takers or salespeople. They can become paid consultants and they can collect the consultation fees that go along with that function.
Think of lawyers or, better yet, therapists. These are people who have developed in-depth expertise in certain areas. People who have problems or questions that fall within their areas of expertise are more than happy to pay them hefty hourly fees to take advantage of their insights and advice.
Well, okay, they may not be exactly “happy,” but they recognize the value being offered and they are willing to pay for advice.
Why shouldn’t home-based travel agents be the same?
Consultation fees versus fees
The whole notion of travel agents charging fees came about in the wake of airline commission cuts, caps, and, finally, the total discontinuation of most commissions on airline tickets.
It’s ancient history now but there was a time when travel agents could make a very comfortable (if not exorbitant) living by selling airline tickets. In the pre-Internet era, storefront travel agencies were the only place to buy an airline ticket without a sometimes time-consuming trip to an airport or an airline office in a major city.
These travel agents were classic “order takers.” They didn’t have to do much to attract this steady stream of income.
When commissions were cut and then disappeared it was no longer possible for travel agents to make money selling airline tickets. In fact, more often than mot, agents lost money on every airline ticket they sold!
Some agents swallowed the losses, trying to tell themselves that the people who bought a money-losing airline ticket today would buy a high-priced cruise tomorrow and they’d come out ahead.
Some travel agents, however, took a deep breath and started charging a fee to issue an airline ticket. First $10, then $15, then $25. Today, $30 to $50 per ticket is pretty standard at many travel agencies.
Some travelers understand the position into which travel agents have been placed by the airlines and are willing to pay the fee for the expert knowledge the travel agent brings to the table and, not incidentally, to have access to a travel advocate when things go wrong, such as weather delays and last-minute emergency itinerary changes.
Also, while I can’t prove it, I suspect that many travelers today are willing to pay a reasonable ticketing fee to a travel agent because they have spent dozens and dozens of hours in the past trying to find “the best” fare on the Internet and have come to the realization that they have better things to do with their time. Why not pay someone and relieve themselves of the drudgery?
But basically, fees were payment to the travel agent for performing a specific task.
Consultation fees that disappear
Another form of fee that has become more prevalent in the last 20 years or so is what I like to call the “plan-to-go fee.”
A home-based travel agent tells a prospect that they charge a non-refundable “standard” fee of, for example, $100 to research a trip, a cruise, or whatever it is the prospect is interested in. If the prospect makes a booking, the fee is applied to the price of the trip. Otherwise, the fee compensates the agent for her research time and effort.
This fee can be whatever the agent thinks “works” for her clientele or the particular request being made. In other words, it can rise or lower as the situation dictates. It can also be waived (or never mentioned) in the case of loyal repeat customers.
While plan-to-go fees sound like consultation fees, I see them more as a qualifying tactic. The theory is (and it is perfectly valid) that if someone balks at paying a plan-to-go fee they are not that interested (qualified) and they are not worth the agent’s time.
Those who do pay the plan-to-go fee are much, much more likely to make the booking. This, by the way, is a tactic used successfully by high-performing corporate salespeople selling products that run into the tens of thousands of dollars. They may make fewer presentations, but they close 90 percent of them!
In the travel business, there a few very high-end agencies that charge clients, who are mostly celebrities and business high-rollers, $10,000 just to be added to their client list!
Bottom line: these are consultation fees in name only. They qualify prospects and serve to ensure that you spend your time dealing with serious prospects only.
Consultation fees come of age
What we now see emerging is a new paradigm for charging consultation fees.
More and more travel agents are charging their clients for one-on-one vacation and travel planning services over and above whatever they garner from commissions.
In an interview with Travel Market Report, Nolan Burris, who was a pioneer in urging travel agents to charge fees, had this to say:
More agents are now looking at the “whole trip” experience, not just transportation and accommodations. They do things like restaurant research, activities planning, cultural arrangements (museums, sports, concerts) and such, as an integral part of their trip consultations. This is when fees generally go from $25 or $50 to $250 or $1,000.
Statistics show that typical vacation-takers spend as much or more money once they arrive as they do on the upfront cost of the trip. This includes restaurants, local tours, activities and more—most of which is non-commissionable.
Just like the lawyer or therapist, you have to develop expertise to justify charging consultation fees like that. Some of these insights can be gleaned from guidebooks and the Michelin Guide, but in that case you are merely saving your client the time it would take them to do the research themselves.
To really shine and to really earn your consultation fees you have to become more expert than the guide books and that requires hands-on, first-person experience. That can be gained by fam trips — and the furious note taking that goes along with it! Better yet, it can be gained by repeated visits on your own to the destinations in which you specialize.
Ah yes, specialization. Those of you who have been following this blog know that the concept of specialization by travel agents is one of my favorite topics. Those of you who have The Home-Based Travel Agent Success Course have, hopefully, begun to live it.
When you specialize, really specialize, you become the source for information that can’t be found in the guidebooks. If you are a true Paris specialist, you will know about the modestly-priced and authentic bistro where your client won’t be surrounded by dozens of other tourists carrying Rick Steves guidebooks.
You will know which of the dozens of walking tours that can be found with a Google search is the best. You will know how to direct your clients to breath-taking galleries in the Louvre that are not crammed with tourists. You will know which one of those “naughty” Paris stage shows offers real value.
If your clients are dead set against a hotel, you will know which neighborhoods to recommend for their Airbnb search; in fact, you may have a list of great apartments that they can book through you, avoiding Airbnb’s outrageous markups. You will, in short, know your stuff.