Monday, May 25, 2015

Plan to Go Fees - What They Are and Why You Pay Them

As a travel agent who does several conventions and shows throughout the year, I often hear people tell me that they can't afford to do business with a travel agent. There seems to be some misunderstanding on two major points - 1) how travel agents get paid; and 2) what fees (if any) are charged by travel agents.

The first answer is fairly simple - for most types of travel, to most areas of the world, travel agents are paid a commission rate or fee from the supplier at no extra cost to you. Often if you find a rate listed online - for example, a hotel in Omaha at $199/night - you can contact us and we can book the same room for the exact same price, with the only difference being that the hotel pays us 10% of the rate rather than pocketing it for themselves. There are some exceptions - highly complex itineraries, for example, may warrant a charge on behalf of the additional time and difficulty of the work - but most of the time we receive our pay directly from our suppliers and not from the client. 

The second answer takes a little more explaining.

Years ago (prior to September 11,2001), airlines used to pay commission to travel agents of about 10% of the cost of the air tickets. This benefited the airlines for the new business, and the travel agent was able to add just air-only bookings to their repertoire. This also meant the airlines didn't need to hire as many staff members to run their phone lines, and it meant travel agents had a way to make consistent earnings no matter if they sold a small trip, large trip, business trip, or any other type of trip.

That all changed as airlines moved more toward online booking engines - they began capping commissions, then just flat out got rid of them. Travel agents could still sell air travel, but the only way they would be paid is to charge for a fee - and only some clients felt that the advice and guidance from a travel agent was worth an extra charge.

Other travel industry suppliers followed suit by lowering the commission amounts paid on travel, or by adding in non-commissionable items to their travel packages. For example, a cruise may have a base rate of $299 that the travel agent would be paid 10% on, but then they still have another $200 of taxes and fees that the travel agent does not earn commission on, and they also won't earn commission on the airfare to get to and from the cruise port. 

This has led to travel agents, especially those with smaller and/or home-based travel agencies, to charge fees. Some charge flat fees just on air purchases, others choose not to sell air-only travel, while still others who may or may not charge for air-only travel charge what are commonly referred to as Plan to Go fees - refundable fees that cover the time it takes for a travel agent to research and put together a quote for a client. This fee is used toward the travel package if purchased, or retained by the travel agent for time rendered on services if the client purchases elsewhere. 

As Operation Relax chooses to decline selling air-only travel, we will only address the topic of the Plan to Go Fee. We have one (currently an incredibly low $15 fee that is refunded once you book your travel with us) and feel that it adds to the quality of our service.

The reason behind a Plan to Go Fee is simple - while many travelers are honorable and loyal to a particular travel agent, many others consider using any means necessary to get the lowest price point - including getting a travel agent to build a customized travel itinerary, then going directly to the travel supplier(s) involved and seeing if they can talk them down in price by booking direct (thus meaning the hotel/resort/etc doesn't have to pay a commission to the travel agent). This fee is designed to maintain the integrity of the relationship between the client and the travel agent. It covers our time in the research and planning stages of your vacation, much in the same way you would compensate other professionals (attorneys, accountants, etc). This fee is often refundable or able to be applied directly to your vacation if you choose to book with the travel agent, but is retained if you choose to take your business elsewhere. 

So called "friends" can be the worst enemy of a travel agent. They often ask for advice or even itineraries but often don't follow through in booking as they either change their mind or find a slightly cheaper rate elsewhere. While most people wouldn't consider calling up their doctor or attorney to ask for advice without expecting to pay, those same people often assume that they can do this with travel agents even though travel agents also spend hours and hours to become experts in their field. Most likely it isn't done out of malice or specific dislike for the travel agent, so much as a general lack of knowledge as to how much work is put in by the travel agent and an overall bargain-hunting mindset. 

I could give plenty of examples from many travel agents of instances where they wish they had charged a Plan to Go Fee but didn't and it cost them time (and sometimes money) - but suffice it to say, while most of us in the travel profession truly do see it as a labor of love, we still do need to get paid for what we do. No business can stay open doing work for free. So it's often one of the only ways we can ensure that our time is being devoted to those who are devoted to us. 

I've been asked a few times why I have a Plan To Go Agreement with a $15 refundable Plan to Go Fee. The easy answer is this: I want to make sure that my time can be focused on my clients who are serious about purchasing a vacation, or who have already booked and need additional assistance. Any trip research, if done correctly, takes a large amount of time and energy. If the client chooses not to book, I have no way to recoup the time and energy I spent on their travel request (which took away from the time and energy I could have given to someone else).Thus, my fee helps to cover my time if you choose not to book, or is refunded back to you if you do book with me. I give personal care and attention to all of my clients, usually an average of 10-20 hours per vacation or more! Doesn't that sound worth $15?  
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We understand that our Plan to Go Fee is low in comparison to the industry average of about $100. We felt that being native Midwesterners and understanding the lower wages in this area that we wanted to have a fee that wasn't prohibitive, especially if you are shopping other agents who also charge Plan to Go Fees. We appreciate your understanding and hope that our blog today has created a better understanding of how your travel agents are paid! 

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