Dwindling supplier commissions have prompted Aussie travel advisors to charge their clients service fees. But are advisors charging enough?
“Personally, we felt her fee was too low for all that she did for us!” This is what a customer said of an agent in a review found on Travel Agent Finder.
Karryon asked Personal Travel Manager Kerry Cleasby if she thought she was charging enough.
“No, definitely not,” she said.
“Maybe it’s a confidence thing. We’ve never charged fees historically. So to suddenly find ourselves in this position where you have to charge, how much is too much? I don’t know.
“It’s a whole new conversation. And that was the bit that made me miserable during COVID. We were all fighting to survive and when Qantas announced that it was going to drop its commission I thought, ‘How do we make this work now?’ Suddenly, in the middle of everything we were going through, we had to think of a new business model and restructure ourselves and work out how we were going to have that conversation with our clients.”
Cleasby has existing clients wanting to pay more for her services “because they know what I do for them”, she told Karryon. But a new client “who hasn’t seen the difference you make to their holiday” may not yet understand the value an advisor brings to the table, she said.
“TravelManagers is definitely guiding us,” Cleasby said.
“They’ve given us suggested fee structures. And we’re free to charge whatever we think. And then I listened to what other Personal Travel Managers charge, and that helps you sort of work out where you sit in the scheme of things.
“I’m probably way too slow at this versus some of my colleagues. They went much harder. And it’s not something I’m completely comfortable with, but I’m having to get comfortable.”
“But being as busy as I am makes it much easier to charge the fees. If someone says, ‘No, I’m not paying that’, it’s almost a relief.”
Fees that please
Like Cleasby, Hollyday Travel owner Holly Velardo has a business built on referrals and repeat customers. But when it comes to new business, advising her fee structure up front has helped weed out the time-wasters.
“If I get a new enquiry, an initial email is sent out explaining how I work and that I charge service fees. People can confirm or deny and then I don’t have to worry about any time wasters.”
When I asked her if she was charging enough, she admitted that despite “working on this for quite a bit of time”, she is still “working on how much I value myself”.
“Because that’s what it comes down to. I’ve set a price but some amazing mentors keep telling me to up that price. They’ll say, ‘Why are you not valuing your worth?’”
And people are willing to pay.
“Probably only one per cent of people say, ‘Oh, no, I don’t want to pay that’. But the rest of them will pay and book with me.
“I’ve got a spiel that goes out about what you’re getting for your service, and what we can offer you as opposed to booking on your own.”
Are you a service provider or a booking agent?
Travel Agent Finder’s Anna Shannon posted a somewhat controversial opinion on LinkedIn:
“We have a huge PR problem. The travel industry is OLD SCHOOL when it comes to how we market and promote ourselves. Those who don’t use travel agents often think of us as booking agents or order takers.”
She told Karryon that the need to position agents as service providers (who then charge accordingly) requires a shift in mindset.
“Agents in other markets (like the USA) have been charging high service fees for years and have been quite lucrative businesses,” she said.
But Australia isn’t a tip-for-service culture so “it’s going to take a lot for us to change an entire nation’s mindset…”
“It is up to each and every one of us to start changing that mindset through EDUCATING clients and the public about how we get paid, what we actually do for them that’s different to booking online AND that we are no different to any other service provider who has spent years on education and personal travel experiences to become an expert in their field.”
Shannon had an infographic built last year to help share the message and help people ‘get it’.
The fact that some people already have is wonderful, she said.
“People see the value travel agents provide and [in the instance of the agent being reviewed on her site] think they should charge more for that!”
