Flemming Friisdahl has been using the “F word” a lot these days – and it’s not because he’s trying to let off some steam.
The president and founder of The Travel Agent Next Door (TTAND) is calling on travel advisors, industry-wide, to start embracing fees, not only to protect their time and money if something unexpected cancels a trip (like a global pandemic), but to also demonstrate their worth as experts in travel.
“If all agents start charging fees, it will become the norm,” Friisdahl told PAX in a recent interview. “If it becomes the norm, customers will see it as the norm. And the more customers that see it as the norm, agents who aren’t charging fees will do it too.”
TTAND has long promoted the benefits of charging fees to its network of travel professionals, but in the wake of the COVID-19 pandemic, which saw agents work countless hours for free, there’s never been a better time than now to convince them that “their time is worth money,” Friisdahl said.
And that message is resonating: in Feb 2019, TTAND agents charged roughly $1,000 in total fees based on roughly $17 million in host agency sales. By February 2021, fees were up to between $7,000 and $8,000 based on roughly $800,000 in total sales.
“That’s more than seven times the amount of service fees on significantly less business,” Friisdahl pointed out.
TTAND agents operate independently and can tailor fees to suit their needs using handy backend tools that quickly generate customer agreement forms that make integrating fees easy.
Which is key, because for some travel advisors, the idea of introducing value-based fees is not so easy.
The fear of charging for services, and losing out on potential customers, is a real one, Friisdahl explained.
“Travel agents are traditionally very nurturing people,” he said. “For some, charging a fee seems unnatural.”
But fees come in different shapes and sizes and agents can structure their prices in ways that are reasonable, transparent and fair.
“We have agents who charge fees all the time and they are some of the highest-selling agents because their clients recognize that they are professionals,” Friisdahl said.
To help build confidence, TTAND recently launched its own training course on fees as part of its internal learning platform.
The host agency has also released a series of educational videos about fees for the entire industry – not just TTAND agents – to watch at its convenience.
The videos, which can be viewed here, cover a range of topics, such as tackling the fear of charging for services, the different types of fees, managing clients that are unwilling to pay fees, useful tools, and more.
Service fees can be based on one’s work flow, from the hours spent on researching new destinations to the time it takes to build itineraries.
They should be viewed no differently than the fees a lawyer, for instance, would charge for professional services, Friisdahl said.
Travel, after all, is a you-get-what-you-pay-for business (even if some consumers don’t realize it at first).
“True travel agents commit to learning and take the time to express that with their customers,” Friisdahl said. “If that’s something you wouldn’t charge money for, then why bother?”
If anything, the COVID-19 pandemic has demonstrated just how vulnerable travel advisors can be when it comes to cancellations, and how fees – cancellation fees, in particular – can help alleviate some financial hardship.
Last year, when borders closed and flights were grounded due to the pandemic, agents found themselves working around the clock – for free – to file refunds, process travel credits, field questions from clients and, in some cases, pay back hard-earned commission.
For situations like this, a built-in cancellation fee can serve as a protective measure to “protect you if the client cancels or if the supplier cancels,” Friisdahl said.
If more agents had charged fees like this, prior to the pandemic, “It would have saved a lot of stress,” Friisdahl said.
"People are going for it"
TTAND agent Cindy Almond of Ottawa-based Romance and Foodie Travel has been charging fees since 2017 – “but not as religiously as I do now,” she told PAX.
“I’m nervous about it every single time, but people are going for it,” she said. “They understand things are different now and that they need to use the services of an expert.”
Almond’s fee structure is outlined as such:
She charges $75 per reservation as a planning and research fee. This separates the customers who are serious about booking from the ones who are just “putting feelers out,” Almond said.
If the trip consists of three or four families, Almond may negotiate a fee of $25 per family in some cases.
Her change fee is $25, her fee for wedding groups is $350 and her cancellation fee is $75 per reservation (not per person, as this could be too steep for some, she said).
All fees add HST and are non-refundable.
Under the current conditions, fees have never been more important, Almond said, especially given that trips can be cancelled, and commission can be recalled, at any time.
On her cancellation fee: “It’s not enough to compensate me, but it’s enough to know clients value me, which is a good start,” Almond said.
Explain your worth
When faced with customers who are hesitant to pay fees, Almond diffuses the situation by explaining her worth and outlining the value of her expertise – which often wins in the end.
She cites a classic example of a client who wanted to join a group of families on a trip and was convinced that booking through a big-box store was the better deal.
Almond did her own research and discovered that the offer “wasn’t apples to apples at all,” she said.
“Even though I may have ended up costing more, their bags weren’t included, they had to pay $3,000 up front (instead of $400) and the terms and conditions were not the same either,” she said. “When I explained this, the clients were like, ‘Ohhh…”
Agents shouldn't immediately “accept defeat” when presented with a price shopper when they can, instead, demonstrate their worth and shift a client's mentality.
“It’s a matter of explaining what you’re about and how you can help (and sometimes save customers money) while providing better value and service,” she said.
For Almond, who is gradually rebuilding her business after a year of losses due to the pandemic, fees play an important role in her post-pandemic recovery plan.
“Grow your business with people who value your business – don’t think you’ll be an agent for everyone.” she said. “You have to think strategically.”
“I’m OK with losing a booking if it means someone isn’t going to value the time I’m about to invest in their vacation.”
"Get fees into your vocabulary”
To agents who still aren’t sure about fees, Almond recommends starting small.
“If you’re only comfortable with charging $25, then start with that,” she said. “If you’re still uncomfortable, say you’re waiving your fee this month as a promotion.”
“At least start talking about it. Get fees into your vocabulary.”
“What you get in commission is compensation from the supplier. What’s your ‘thank-you to you’ for all the money and time you’ve invested in travel?”
The pressure to “know all the answers” about travel shouldn’t deter agents from fees either, she added.
“If an agent doesn’t think they’re worth a fee, their network is worth a fee,” she said. “That’s the advantage agents have over consumers.”
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