Stephanie Lee has noticed a "gap" that travel agents need to fill based on surveys
her website, hostagencyreviews.com, has conducted: Most agents are satisfied with their jobs, but one of the most challenging aspects of being an agent can be a low income.
So, how to overcome that problem? Charge a service fee.
"The only way that I can think of to bridge that gap of having a low income where it's dependent on commissions from vendors is to start charging your own fees. I don't think that's ridiculous," Lee said. "Agents bring so much value and expertise to the table that it just makes sense to me."
And yet, many agents don't charge service fees, for a variety of reasons.
Hostagencyreviews.com just released its second annual Hosted Travel Agent Service Fee Report
detailing the results of a 720-plus agent survey about service fees. It found that only 33% of the agents who responded charge a service fee.
In the 2016 survey, 43% of agents said they charged service fees, which would indicate 10% fewer agents charged service fees in 2017. However, Lee said the difference is likely based on experience level. More agents surveyed in 2017 had less experience than the agents surveyed in 2016, and less experienced agents are less likely to charge fees.
The agents who reported they charge service fees were also asked how they charge that fee. They use a variety of models. A flat fee ranging from $20 to $500 was the most commonly reported. Agents are also charging per-person fees, hourly fees, per-transaction fees and other fees that depend on the service.
As for the agents surveyed who don't charge fees, they gave a variety of reasons why: They don't feel they're experienced enough, they fear losing current clients, they didn't know about fees or, the most common response, they felt they wouldn't be able to attract new clients.
But Lee said all agents should consider implementing service fees, even if they are new and feel they don't have much experience.
"I think there is a lot more conversation in the industry about charging service fees," she said. "And this is my own personal philosophy, but I feel like travel companies in all different verticals are re-examining their income models, whether it be the airlines coming up with their ancillary fees to hotels looking to bring more bookings in the direct channel. So I think it's a great time for travel agents to be redesigning how they make money."
Lee had some advice for agents who are nervous about bringing up fees with existing or potential clients: Practice on friends and family first.
"That's the best advice I've heard from people who are so nervous about it, is to keep saying it over and over again," she said.
She also recommended a book for agents: "Monetizing Innovation: How Smart Companies Design the Product Around the Price" by Madhavan Ramanujam.