With clients increasingly shopping around for the best deals, travel agents face a growing problem: should they charge an upfront service fee to secure their time and expertise?
‘Clients shopping around’ was recently flagged as the joint-third most significant challenge faced by South African travel agents, as reported by Travel News.
Travel News spoke with three industry professionals to gauge their views on this controversial topic.
The case for upfront fees
Sean Nagel, Owner of The Travel Man, advocates for upfront service fees.
"I agree 100% with charging a professional service fee. When a client approaches me for a custom tour, I inform them upfront that I charge a service fee. This fee is deducted from their final payment once they confirm the itinerary and quote. It ensures that both parties are serious and committed. This approach protects my time and allows me to focus on delivering a high-quality, personalised experience without spending countless hours on clients who ultimately book elsewhere," Nagel says.
However, he acknowledges that some clients may be put off by a service charge.
"Upfront service fees can indeed be a deterrent for some, but they also act as a filter for serious clients. Those who value bespoke travel experiences are willing to pay for the expertise and time invested in creating the perfect trip for them."
Nagel adds that an upfront service fee will allow agents to focus on what truly matters: offering high-quality, personalised travel experiences.
“It removes the pressure to compete on price alone and ensures that we can dedicate more time and resources to delivering exceptional service. This kind of focus on quality helps differentiate bespoke agencies from larger, impersonal agencies or online booking platforms."
He also admits that some clients do expect free quotes, but adds that it is important to educate them on the value of the services agents provide.
“Much like how clients wouldn’t expect a free consultation from a lawyer or doctor, they should understand that the time and expertise travel agents provide comes at a cost. I always explain to my clients that the service fee reflects the time and effort I put into ensuring they have a flawless and personalised travel experience. It’s a small investment for the peace of mind and seamless service we offer."
Charging deposits instead
An anonymous ITC told Travel News that she took a slightly different approach. While she does charge clients in some cases, she prefers calling it a deposit rather than a service fee.
"I would not call it a service fee, more a deposit to cover costs of time for providing quotations, sourcing availability, and advising on certain aspects of the request. This can be deducted from the total owing once travel is secured," she says.
The anonymous source notes that she is selective about when she charges fees.
"Personally, I have very few clients whom I do not know – most of my business is repeat business or referrals – so I give them the benefit of the doubt. But yes, I have most definitely requested ‘deposits’ or, as I put it, ‘a fee to cover my time’ when clients have asked and changed requests."
She also points out the lack of regulation in the industry. "Unfortunately, we are not viewed as a professional industry and the public often doesn’t understand what they are paying for. They believe everything is available on the Internet."
A tour operator’s view
Chantelle Pearson, Owner of Travel 2 Reunion, operates on the other side of the travel industry as a tour operator specialising in Indian Ocean destinations.
"I do hope the agents are at least charging service fees to cover their time and effort as they quote many destinations, sometimes just for one client, who ends up shopping around. It’s very frustrating for them."
Pearson believes the only way to change this behaviour is through industry-wide standardisation.
"The only way to educate the public would be if every consortium, travel business owner, and manager charged an industry-standard quote fee. If implemented and everyone stuck to it, our industry would benefit, and clients would respect our time and knowledge more and would not shop around as much, but it would have to be a nationwide implementation."
