Should you charge a planning fee to your clients? This is a popular question among many travel agents whether you’re new to the travel industry or a veteran.
In a previous Travefy Academy webinar, we chatted with Sandy Saburn, VP of Sales at Gifted Travel Network and she shared why travel agents should always charge planning fees. To watch this webinar, click here or watch below. In the webinar, she walks through the different types of fees and how to charge your clients.
If you would rather read about fees, scroll past the video for more information!
Why charge a fee?
First, the most important question: Why even charge a fee?
The simple answer is because you are the expert, your clients are using your expertise to help plan their travel. Take for example when you go to the dentist. You may have to pay for additional add-ons like fillings or extra dental work, but you still have to pay the fee to just see the dentist first.
As a travel agent, you aren’t just booking travel (that’s only part of the job), you are also researching, offering expertise, and planning so you should get paid for that too because that can end up being hours upon hours of your time. If you aren’t charging a fee, you will only earn commissions on what you book, which is still amazing but when you have a fee coming in too that’s just another source of revenue for your business.
Think about it this way: Let’s say you book a trip and earn a $1,000 commission. If you were to include a service fee of $250, that’s an extra 25% to the bottom line! It also helps you feel empowered to go above and beyond for your clients because you’re getting compensated to do so.
Another reason why many travel agents charge fees is because it can help weed out the “window shoppers” to your actual paying clients.
How to decide your fee price.
Most likely the hardest part is trying to put a price tag on your expertise. If you’re new to the industry, you might undervalue yourself and that’s okay if you want to work on raising your fees in the future but don’t underestimate how much work you will be putting in for clients.
According to the Gifted Travel Network, most successful travel agents are charging over $125 for a fee. You can always start around that price range where you feel most comfortable and increase in the future. You can also set limits around this fee. For example, if you are asked to plan a trip for a large group which include many tours, activities, accommodations, flights, etc. maybe you increase the fee to each couple or every x amount of people.
How to approach the fee conversation.
We get it, asking for money from a potential new client can be challenging because you obviously don’t want to scare them off! So to be successful at charging a fee you first want to be confident enough in yourself that you deserve a service fee. Just think about all of the research and planning that you will be spending on this client and let them know up front that you will be requiring a fee and list out why you are charging the fee (time of planning, research, and making it the best trip possible for the traveler).
Decide ahead of time when you introduce the fee into the conversation as well. Whether you want to wait until they request a proposal or quote or up front at the very beginning. If you decide to post in advance on your website, you may lower your leads but that will better qualify your clients. Find what works best for you and your business and run with it!