The purpose of this course is to help you understand how to develop and implement a progressive fees strategy. From front line agents to mangers and owners, everyone has a role to play in determining the success of such a strategy. It is the intent of this program to address the critical issues that apply to each area of responsibility as well as to provide an understanding of the topic in general.
While fees are certainly not a new concept, their scope and importance continue to expand. The results of studies by ASTA indicate that the percentage of agencies collecting fees grew to above ninety percent between 1998 and 2005. While the percentage of agencies collecting fees has somewhat leveled off, the amount charged has slowly climbed year after year. In addition to the amounts increasing, the number of services and transaction types to which a fee is applied has also expanded.
“Transaction fees” or “ticketing fees” related to air travel are now the norm throughout the industry with the vast majority of agencies charging them. This is primarily due to the reduction or complete elimination of commission for air sales made by travel agencies and changes in GDS agreements. This program however is not limited to concepts for airline ticketing fees but instead will address the growing trend of charging fees for some or even all travel agency services.
From corporate agencies to cruise-only specialists more and more agencies every year are joining the ranks of those who charge some type of fee for everything they do. Many charge a nonrefundable “trip planning fee” that is applied to the final cost of the trip. An increasing number however are now charging “professional consulting and services” fees in ADDITION to the cost of the trip.
Similar Terms – Very Different Meanings
Terminology for the many types of fees and fee programs in existence varies greatly. The term “service fee” is perhaps the most widely used throughout the industry, but it can represent many different things. For some agents this term is used to mean “transaction fee” while others use it meaning “non refundable deposit applicable to the purchase of a trip” and others use in reference to professional consulting and advice.
For the purposes of this course we will use two basic terms to represent the two primary types:
Going Beyond Transaction Fees
A growing number of agencies are now charging fees for most or even all of the services they provide. Their reasons for this move vary and are not exclusively financial. Commission declines and other revenue reductions combined with ever increasing costs tell only part of the story. Some have chosen to move to a “fees-for-all” type model to prepare for what they see as the inevitable and even desirable future of the industry. Some see it as a way to create and sustain independence from supplier and other industry developments beyond their control. Others have done it in order to pay for substantially better service levels rather than attempting to compete based on price and high volume.
Regardless of the reasons an agency may have charging fees of any kind, they must consider the reasons their client might (or might not) pay them! Given that the majority of travelers surveyed believe (erroneously) that a travel agent is the most expensive options for buying travel, it is fairly clear that price is not normally the primary factor in choosing to use an agency versus other options.
Time and time again it is time and personal attention, service, and help that top the reasons given for making the choice to use an agent. There are those that believe fees are the most logical solution to keep these three critical competitive factors in place. With traditional revenue sources shrinking while operating costs continue to expand some see it as a choice between two possible paths:
It is the later that is driving more and more agencies to consider expanding fees beyond traditional air or transaction charges. They believe that service – exceptional service beyond that which websites and “transaction processors” can deliver is the key to our future. They believe it is the one thing that distinguishes travel consultants from the seemingly limitless other choices available. They also believe that there is a huge market of customers who are willing to pay a little extra for that increasingly rare customer experience.
There is a fundamental change happening. It is a shift from a revenue model based exclusively on transactions or bookings to one based on service, time, personal attention, customer support, representation and expertise. Given the changes in why people call and use travel agents today, versus simply going online, it may be a shift that is both timely and significant.
“Give customers what they need and you’ll make a sale.
Give them what they really want and you have a client for life.”
Some of the ideas and concepts you’ll learn in this course are time-tested and well known. Others are more cutting edge and creative. By learning more about both you will be better equipped to make educated decisions on your own today and in the future.