The number of travel advisors who charge clients a fee for
their services hovers somewhere around 50%, based on several industry surveys.
But as a direct result of the coronavirus crisis, that number is expected to rise.
When leisure travel essentially came to a grinding halt in
March, many travel advisors found themselves canceling and rebooking clients’
plans, doing twice the work -- or more, as reopening dates have been pushed
back -- for a single commission. And that commission will be paid only once the
client has traveled.
At the same time, agents who have charged fees for years are
training their peers on the practice, encouraging them to value their work
enough to charge for it, just like other professionals. They are also
reevaluating their own fee structures.
Agency consultant Robert Joselyn, president and CEO of the
Joselyn Consulting Group, has been advocating for agencies to charge fees since
1984, well before airline commission cuts and 9/11 spurred many to start the
practice. Of late, he said, there has been “a vast recommitment to fees” among
agencies and consortia.
“It really came home this time as people did all the work
booking all of this travel,” he said. “And those who did not charge fees for
the planning and so on, they’re doing all of this work unraveling it, getting
beat up by their clients -- ‘Have you got our money?’ and stuff like that -- [and
realizing they’re] doing twice as much work.
“If they didn’t have consulting fees to start with, if they
didn’t have booking fees and, for God’s sake, if they didn’t have cancellation
fees and sell insurance to cover it, they’ve done twice the work for nothing.”
According to a 2018 Phocuswright study, 47% of agencies
charged service fees, and 20% planned to do so within the next year. Host
Agency Reviews’ 2020 Hosted Travel Agent Fee Report found that 52% of host
agency affiliates charge fees.
Stephanie Lee, founder of HostAgencyReviews.com, said some
advisors might feel reluctant to start charging fees if the economy worsens in
the coming months. In that case, advisors might find themselves fighting for
clients just to survive.
But Lee, like Joselyn, said she believes the coronavirus
crisis has renewed interest in fees.
“I don’t have a crystal ball on this, but I feel like the
pandemic has stressed to agencies the importance of their time and being
compensated for it,” Lee said. “And, really, the only way you can for sure be
compensated is if you’re charging some sort of a fee for the transaction or for
Charging fees has become more common in recent years. Lee
said in 2016, 10% of hosted advisors charged consultation fees, versus 26%
today. In 2016, 43% of hosted advisors reported charging service fees, compared
with 52% today.
Joselyn said fees will be a big part of the way agencies do
business in a post-coronavirus world. Agencies get paid by suppliers for the
work they do for them, he said.
“I’ve never heard a supplier saying, ‘Well, we need to make
sure that we pay an agency enough commission to cover the cost of services they
give away to their customers,’” he said.
A number of advisors who are experienced in charging fees
are working to train peers on the topic, including Ralph Iantosca, owner of
Iantosca Travel in Irving, Texas, who recently created a four-hour curriculum
on implementing a fee structure, which he said drew interest.
Iantosca charges clients $250 an hour for his
travel-planning services. That financial commitment makes clients feel more
engaged, he said, and makes him appear more professional.
Jamie Jones, COO of WhirlAway Travel in West Chester, Pa.,
has also been educating advisors on charging fees. And after spending much of
the pandemic talking with her top clients about her own agency’s fee structure,
she’s in the process of changing it. While nothing is solid yet, she is
considering annual or monthly retainers or hourly charges.