TORONTO — Carol Murray usually doesn’t make New Year’s Resolutions, but at the end of 2023 she vowed to do just one thing: to always charge fees for her travel services.

The Toronto-based travel advisor and owner of Your Vacation Home, who prior to 2024 was inconsistently charging clients here and there, tells Travelweek that the pandemic “changed everything” – including her take on service fees. 

“We found out how vulnerable we advisors are,” she says. “If our clients have to cancel their trips, trips that we poured hours into creating, we have to still be paid for our services, regardless if the trip happens or not.”

Now, Murray charges an amount each time, based on how much work is required and the number of passengers. “It’s $250 for up to four people and it will increase from there,” she says, adding that she’s no longer concerned about possible push-back from certain clients.

“In some cases, travel advisors don’t get that much from the supplier and yet we’re doing tons of work for the client. That is not sustainable for a business,” says Murray. “We are professionals and experts and we need to be paid for our time. All advisors need to charge fees, finally making it a norm across the industry.”

WHY ARE AGENTS STILL NOT CHARGING FEES?

In a perfect world, every travel advisor would be charging service fees to compensate for their time and hard work. But the reality is, only a small percentage of advisors are consistently doing it – why?

“The biggest reason is confidence,” says Zeina Gedeon, President and CEO of Trevello Travel Group. “For a very long time, travel advisors did not believe they should or could charge service fees because they were getting commissions. There are also many advisors new to the industry who are concerned about building their client base, and others who’ve been working with clients for a long time and don’t want to now implement a fee.”

Gedeon does note, however, that more and more advisors are implementing service fees post-pandemic.

“Many advisors re-evaluated their businesses during the pandemic and realized that they cannot depend solely on commissions. They worked so hard to cancel, rebook, cancel, rebook flights and in the end everything got cancelled, and they did all this for no fees and no commission! They realize now the true value of the services they offer,” says Gedeon.

Flemming Friisdahl, Founder and CEO of The Travel Agent Next Door (TTAND) is also seeing an increase of travel advisors charging fees.

“100% we are seeing more fees coming in, as a percentage of sales. However, it’s still a fairly small number of advisors doing it routinely. But more and more are becoming comfortable charging for their time. I wish it was more the norm than not, but we are getting there,” he says.

.

HOW MUCH SHOULD ADVISORS CHARGE?

When it comes to how much a travel advisor should charge a client, there’s no one-size-fits all; it all boils down to what the advisor is comfortable with, how much they value their time, and the type of booking being made.

“The amount varies based on an advisor’s experience, expertise, location and the type of booking,” says Gedeon. “However, we give our advisors some general guidelines when they consider charging service fees, around 10%-20% of the total cost of the trip, or a flat fee based on the component of travel, like flights, hotel, FIT and vacation package. Every advisor is different, and they should find a fee structure that works best for them and their business model.”

Friisdahl, who sees both ends of the scale with some advisors charging up to $2,000 for a J class airline ticket while others charge nothing, says that TTAND offers a model on service fees though it’s 100% up to the travel advisor to follow it or not. But he’s quick to add that it’s not so much about the amount, but rather about getting consumers used to the idea of a service fee in the first place.

“Remember when we all used to fly from YVR to YYZ and we had a meal included? And now the airlines charge for meals. Nobody barks at paying for this because it has become the norm. So we have to ask everyone to jump on the wagon and make sure consumers know that a professional travel agent’s time is worth money,” says Friisdahl.

,

HOW DO YOU BROACH THE SUBJECT?

It can be an awkward conversation when mentioning to the client what your service fee is, especially if it’s an existing client and you never charged one before. This is why Murray tells them up front, before she starts working on building their itinerary, to avoid any surprises in the end.

“I think it’s more expected now and better received because clients understand that they need us more than they realized! They also understand that we should not ‘work for free.’ Those days have passed,” says Murray.

Gedeon also agrees that starting with transparency is key: “Be upfront about your fee structure from the beginning. Clearly explain that as a professional travel advisor, you provide personalized service and expertise that go beyond simply booking flights and accommodations. Emphasize to clients that the fees are a reflection of the time and expertise that goes into planning their trip, and remind them that they are paying for a personalized service that will save them time, money and hassle in the long run.”

Friisdahl adds that travel advisors should treat a service fee the same as they would for other extra costs, like airline taxes and fuel surcharges: “It is simply part of the cost of travelling! The advisors I’ve talked to just make it part of the entire conversation and they don’t stop to make a big deal about it.”

.

WHAT IF THE CLIENT PUSHES BACK?

It’s to be expected that some clients will push back on the idea of paying a service fee, especially if they can find another travel advisor who doesn’t charge one at all. But if this happens, Friisdahl says honesty can be the best policy.

“Tell them the truth, that you’re not paid commission and this is why you’re charging a service fee. Tell them that your time is worth money – the truth is the best way to explain it,” he says. 

Gedeon adds that the key to handling clients who don’t want to pay the fee is to focus on the benefits of working with a travel advisor and to address their objections with empathy and professionalism.

“Advisors need to be confident and show the client the value in working with them, focusing on how their services can save the client time and alleviate stress when planning their trip,” says Gedeon. “The personalized service they offer, their access to exclusive deals and amenities, the knowledge they have for the destination, and the support they provide the client while planning the trip, while they’re on their trip and during any emergencies that may arise – all of this justify the cost of your service fees and help retain clients who may initially be resistant to paying them.”

.

WHAT IF YOU’RE CHARGING TOO LITTLE?

For travel advisors who have already implemented a service fee, how do they know if they’re not charging enough? And how do they raise their fee without scaring away their existing clients?

Gedeon recommends four tips:

• Re-evaluate: “We recommend re-evaluating your fees on a yearly basis. You should be continuously researching what other advisors in your area or niche are charging for similar services. Assess your value proposition to make sure your fee structure reflects the value your client receives. And always take into account your clients’ feedback and consider their expenses.”
• Space it out: “Rather than implement a significant fee hike all at once, consider gradually increasing your fees over time. This allows clients to adjust to the new pricing structure and help minimize the risk of scaring them away.”
• Give notice: “Always give clients advance notice of any fee increases, and explain the reasons behind the change. This demonstrates transparency and allows clients to prepare for the adjustment in pricing.
• Get feedback: “Advisors should keep track of clients’ responses to the fee increase and be prepared to adjust their pricing strategy if necessary. Solicit feedback from clients to understand their perspectives and address any concerns they may have.”

This article appears in the Feb. 29 issue of Travelweek.