Until recently, the big question was "Should I charge fees?" This
is rapidly giving way to another: "What changes can be made to
improve my service fee program?"
The trend to service fees is not universal, but definite. A
recent poll of 306 agents conducted by the American Society of
Travel Agents found 70.9% now are charging fees. So once you've
taken the big step, what's next? Do you keep quiet and try not to
remind clients about your fees? Or should you keep looking for ways
to fine-tune your fee program, perhaps even decide to raise fees
for certain services?
Some agencies contacted for this article found they could
increase their initial fees with virtually no resistance. Some
found that by simplifying their fee structure, it had the same
effect of raising fees. Some learned that by bringing their outside
agents into the program, customers in the community got a more
consistent message about that particular agency, a tactic that
ultimately leads to higher profits. And almost all agents said they
keep an eye on what other agencies in their area are charging to
At Vintage Travel in Napa, Calif., manager Kris Ohlandt found
she could raise her fees without upsetting her customers. Her
agency increased fees as follows: from $5 to $10 for airline
tickets; from $10 to $20 for reissues and exchanges; from $15 to
$20 for coupons, and from $50 to a 10% charge for
"We raised them because we looked at what other people are
charging, and to be cost-effective," said Ohlandt. "We are in the
black now, absolutely because of service fees. Normally January is
very slow; we made a profit in January this year."
Robert Henri, owner of Robert Henri Travel in San Francisco, was
able to double his fee revenue by moving to a simplified schedule
of $15 for everything. Previously, Henri charged from $10 to $25
for different services in addition to a $75-per-person charge on
foreign independent travel arrangements. The only deviations from
that simplified program are international phone calls and same-day
mail services, which are simply passed along to the customer with
"We went to the $15 charge for everything to simplify it and
make it easier to explain," said Henri. "You say to a client '$75
planning fee for FITs' and they run the other way. It's just easier
to charge $15 for individual services and not get into a big number
calculation with your clients."
Marci Smolowitz, partner in Travel Plus of Danbury, Conn., said
she also simplified her fees to a $15 charge for everything. That
helped her raise revenue (she won't say by how much), and since she
formed an alliance with other area agencies who all agreed to
charge fees, she quit worrying about customers who desert to
In addition, Smolowitz said she found that by listing a $50
plan-to-go charge and a $5 delivery fee -- which she doesn't
actually charge -- her customers are happy because they think they
are getting a break. Smolowitz also improved her accounting of
service fees by opening a separate checking account for fees and by
buying a software program to calculate how much income comes from
fees. "It's amazing to see how much that little account has grown,"
Sylvia Berman, owner of Post Haste Travel in Hollywood, Fla., is
ready to raise her fees as well. For airline tickets only, Berman
started out with these fees: $5 minimum per ticket; $10 for tickets
under $100, and $15 for refunds, exchanges, voids and reconfirming
reservations. She charges for other services as well. "We
originally set a goal of $100 per day on service fees; we've
reached it and now we want to make $200 per day," said Berman. "We
have to sit down and decide if we're going to double our fees or
charge the corporate accounts that we don't currently charge --
that's a tough decision."
Berman said corporate accounts "are going to scream and yell. We
are finding that corporate accounts, the new ones, are becoming
Jack Gunner, president of AST Ambassador Travel in Seattle, said
improving his service fee program meant a reassessment of his
corporate clients' worth. "With our fees, we have to examine the
profitability of each account," said Gunner. "If they have a high
number of international business trips, we may not charge them; but
if they're doing a lot of low-cost or West Coast only, then we
charge them a higher fee.
"We just started doing that because the competitive pressures
are starting to come in. We've seen competitors come in and say to
our accounts, 'We'll take you on a no-fee basis.' But I think those
are the people who lack vision."
Bringing outside agents into the service fee fold is another
issue that agencies must address in order to improve their
Lloyd West, vice president of Plan-It Cruise & Travel in
Marysville, Wash., employs six outside agents who work exclusively
for his agency. "If [outside agents] are out there and not charging
a fee and you are, they are in a kind of competition with you,"
His solution was to tell the agents they didn't have a choice --
but he sweetened it by giving them the same split on fees as he
does on commissions. "Some of them are getting $300 extra per
month," said West. "We talked to other agencies about it; some
split it with them and some don't. If you share it with them, it's
an incentive to charge the fee."
Randy Brown, executive vice president at Corniche Travel in Los
Angeles, said his outside agents "were the most hesitant, but now
that they are doing it, the client base is more than willing to pay
for the quality service."
For those agencies that are still contemplating a fee program,
doing your research beforehand could eliminate some of that
fine-tuning many agents need after it's already off the ground.
Jeff Calley, owner of Travel Solutions in Seattle, carefully
researched other fee programs before starting his own Feb. 1. He
found that by looking at what others are charging now (after an
increase or two), he may not have to raise his fees so soon. "I
fought it tooth and nail and went kicking and screaming," said
Calley, who admits he is now a true believer in fees. "We networked
with other agencies in the area and tried to be competitive with
Calley ended up with a $10 flat fee per ticket with a maximum of
$20 per booking. And he charges a $15 change fee. "I know there are
other agencies charging $5 and that's fine, maybe they'll break
even. But I know that agencies in this area are charging between
$10 and $20. The main thing I learned is to not fear change. It has
taught me what service is all about."
Ohlandt at Vintage Travel had a similar revelation about fees
that seems to have put a spring in her travel agent step. "Now
we're making money doing the ticket, and if they cancel it, we make
money as well. It makes you feel better about the profession you're
in. You have a worth. That's really the bottom line."
Improving Fee Programs
To fee or not to fee is not the question. How to get the most
out of those fees is. Here are ways some agents are improving their
service fee programs.Flat fee: Move to a simplified schedule of charging one fee for
everything. One agent reported doubling fee revenue by moving to a
flat $15 fee.Separate accounting: Open a separate checking account for fees
and buy a software program to calculate how much income comes from
fees.Let outside agents in: Offer outside agents the same cut on
fees that they get on commissions.Do your homework: If you haven't implemented fees, find out
what competing agencies are charging before launching a fee
program. By knowing what to charge, you minimize the probability
that you will need to raise fees soon after introducing them.