Chats on travel agent social media groups reveal recurring topics year on year.
A perennial theme is agents expressing how let down and disappointed they feel after they spend hours putting together quotes and researching destinations for a would-be client who then shops and books direct online.
Consultants are left out of pocket for their time spent on research and chasing a dead-end prospect, and for smaller ITC businesses this can represent significant revenue ‘leakage’.
Experts say reluctance over charging upfront consultation fees is still a problem in the industry, linked to travel advisers’ failure to clarify to prospects the true value of the service they offer as professionals.
It’s 19 years since SAA dropped agency commissions for South African agencies. SAA’s move to 0% commission was promptly followed by the other carriers operating in the market. At that time, it was generally agreed that agencies would need to charge professional fees to replace lost airline commissions.
Marc de Jager, Business Development Manager at Travel Counsellors, says charging a consultation fee should be a standard for all agents.
“We provide a valuable and professional service to customers, and the knowledge, experience and know-how that we have built up over the years is our intellectual property.
“If you ask any professional service provider for advice or to provide a service, they charge for it, so why are we always so hesitant to do this?” he asks.
Otto de Vries, CEO of Asata, says quotes not converting to business is a challenge that has existed for as long as travel agents have been around.
“People will shop around and do comparisons, and they will either get quotes from a number of travel agents, or they’ll do their own research,” he says.
De Vries cautions that dealings with consumers cannot only be transactional, as this isn’t the value proposition provided by a travel consultant. He believes that the most significant change that needs to be made is the way the issue is approached.
“It’s a mindset shift, and it’s a shift that has to play out for both the consumer and the travel agent. Both parties need to be comfortable, familiar and happy with a professional fee included to secure the travel arrangements as well as the service.”
Similarly to how doctors charge a consultation fee whether the patient is unwell or not, De Vries feels the application of a consultation fee is part of the evolution of travel agents and that even referring them to as ‘travel agents’ is becoming increasingly irrelevant, and the terms ‘travel advisers’ or ‘consultants’ are more reflective of the evolution we are seeing within the industry.
For companies like Travelstart, its infrastructure means that its consumer users can generate quotes and itineraries in mere minutes.
“This gives us a competitive edge,” says Linda Balme, Head of Commercial at Travelstart.
On the other hand, Travel Counsellors, an ITC model, sees each of its ITCs running their own business. This allows them access to a multitude of tools and resources, opportunities for suggesting add-ons and upselling. It also gives them the opportunity to make autonomous decisions, such as charging a consultation fee upfront.
“Our industry is second to none, so we absolutely need to believe in the value we provide and charge upfront for it. This is to ensure that your customers or potential customers are serious about booking with you and not just fishing for information to enable them to book themselves,” says De Jager.
De Vries feels it needs a mindset shift – consultants need to position their value proposition to their customers in the correct way.
“As much as customers need the right information, travel consultants need to have the confidence to be able to charge fees knowing full well that they are completely within their rights as a professional to do so.”
How much?
A Gqeberha-based travel consultant says she charges a fixed nominal consultation fee which is then absorbed into the booking fee should the client agree to proceed with the quote. She says customers are happy to pay this, even if they don’t agree to proceed with the quote. The business can then partially recoup the costs of the time she dedicated to drawing up the quote and also identify who is and isn’t serious about working with her.
De Jager says a similar approach travel advisers can adopt is to look at their monthly gross income and divide that by the number of official hours they work, arriving at an hourly rate and estimating the time needed to generate the quote.
“The amount that you get is your hourly rate, and if you feel that it should be higher, then make it higher... This consultation fee should be non-refundable but when the customer books with you, you can offset the consultation fee against the cost of the booking.”
