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Fees are the Fastest Way to Increase Profits

By: Sandy Saburn, CTIE[/caption]Everyone would like to have more money in their pocket without having to work more hours, right? Well, you are in the right place. In this first installment of the Profit Hacks for Travel Advisors series, the focus is on fees as this is the fastest way to increase your profit without adding more work.If you look back to 5 years ago, it was pretty unusual for travel advisors to charge fees. Those that did, were typically highly specialized and in demand. Most advisors felt they couldn’t charge fees until they “paid their dues” by working in the industry for years.Thankfully, that has changed over the past few years significantly. This is partly due to the realization from long-time travel agents that fees are a must-have, after spending hours making and canceling reservations they would receive no income on.Another significant factor is the number of newcomers to the travel industry. Many were perplexed by the notion that a service provider who is providing so much guidance and advice wouldn’t get paid for it.Before we dive too deep into this topic, a point of clarification about what I mean by “fees”. This is not about adding a $25 or $50 fee for booking air or adding in something to a booking where the client cannot see it. This is all about a professional fee paid by the client directly to you before you begin working for them.Those other “fees” are just padding on a booking and not recognized by the client that your service is worth paying for. If your service as a travel advisor is worth paying for, you should be paid for it – by the client.According to Host Agency Reviews, advisors who charge fees earn 50% more than those who don’t. They are including all types of fees: airline booking charges, padding added to a booking the client doesn’t see, and professional fees charged directly to the client.The reason these advisors make more money isn’t just because of fees, I think advisors who have a fee structure in place are probably more business-oriented than those who don’t. That’s not the case for every advisor, but those who focus on the entrepreneurial aspects of their travel business are going to see that gaping hole in income.If you are already charging fees, I encourage you to re-evaluate them and see if they are still appropriate for your market and what you do. It can be hard for people to determine what’s appropriate because you can’t just Google, “what’s the travel agent fee structure for my area” and get a list.Generally, the higher-priced your average booking is, the higher your fees should be. If your average booking size is $50,000 then you are going to charge a larger fee than someone with a $5,000 average. (We will talk more about your average booking size in another article.)As a basic rule, your fee should be significant enough to demonstrate that the client is paying a serious professional. Personally, I don’t think a $50 fee does that. I think that feels more like a penalty than what I would pay a professional with strong skills and connections in the industry.Probably the most common fee I see is $250. I also know advisors that charge more than $1,000. Since the pandemic, many advisors have increased their fees so they can provide cancellation and rebooking without charging an extra fee. Others charge a fee when you book, a fee if you cancel, and another to rebook.What you do is all up to you and your business and what you think is best for your ideal client. Not necessarily the clients you have now, but your ideal client. If your current client roster is full of less-than-ideal clients, fees might be the way to free up space for that dream client to show up.The bottom line is this: you must have confidence in yourself as a travel advisor and the value that you bring to clients in order to charge – and get – fees. If you don’t believe you are worth it, your clients won’t either.