Richard Turen
As we try to cope with the pandemic and the realization that nearly every component in the travel landscape will be changing, there seems to be one constant: We have a healthy supply of industry gurus telling us that we have to start raising our fees.
And for those who have not been charging fees, there is mounting pressure to get on board with the notion that this is a sure route to the professionalization of our industry.
You are hearing it everywhere. We're in the process of losing at least 50% of our workforce, and we are seeing massive consolidation among travel providers and, certainly, sellers. And everywhere -- in print, in consortium training sessions -- we are being exposed to the cult of fees as a panacea for our diminishing role and diminishing profits.
All too often, the argument for fees is linked to the perception that we have to be seen as professionals who know the value of our service. You know, like doctors, lawyers and accountants. Yeah, like them.
The only problem I have with that argument is that the physician or the attorney does not have the burden of competing with selling the exact same services available online at a reduced cost. There are no websites where your physician or surgeon has offered their services at a rebated rate.
I do not equate charging fees with professionalism as much as I equate it with naivete. Do we really think that our survival is most closely linked to our willingness to be the most expensive booking option available?
Here is what really concerns me about fee proponents. They are addressing the wrong problem. Is the problem really that we need to have our clients pay us for our time because we are selling them products that cannot provide us a suitable livelihood? Do we need to make up for the $65 commission on a $599 cruise by charging fees to simply survive? And is that really a model for the future that is sustainable?
The real issue in our industry has been the history of agents embracing travel products that are not profitable. Fee discussions skip over the more important question: How are you going to reorganize your company to sell only those products that are truly profitable for you to sell?
Here is a radical alternative to operating a fee-structured travel practice: Reduce and refine your business so it has a clear focus. Stop being the travel doormat in front of a door that loudly proclaims, "We sell anything here, even if it actually loses us money."
If you love selling escorted tours or spa products, determine the very best products in each category and publish your ratings online. Then, sell only those products that secure the highest ranking.
Choose to sell the best of the best and make up your mind that you are going to raise your average transaction from whatever it is today to a figure in the $10,000 range. Don't call yourself a travel agent. Instead, refer all leisure planning that is unprofitable to a local "travel agency" that is still doing "everything."
The average roundtrip air transaction in February of 2019 was $486. The average travel agent transaction was in the range of $2,500. That figure needs to increase to $10,000. That should be the goal of every practicing travel consultant: an average transaction value of at least $10,000.
My firm rates and evaluates the world's top cruise lines. If you are No. 11 on our list, we will not sell you. That helps give us an average transaction value in 2019 of just over $21,000.
I know $10,000 is doable, and it would erase the need for fees on standard, non-FIT business. It is always my advice to zig when you see that everyone else seems to be zagging.