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is it time to update your fees?

By: Sandy Saburn, CTIE[/caption]Fees have been a hot topic in the travel industry for quite a while and an even hotter topic since the pandemic.According to survey results from Host Agency Reviews – which conducts one of the best surveys of travel advisors – those advisors who charge fees earn 46% more than advisors who don’t. This is according to the 2020 survey as results from the 2021 survey haven’t been released yet, but I am sure that number will have increased.In 2016, only 43% of advisors responding to the survey charged fees. In 2020 that number was 75%. When we see the data for 2021, I am sure that number will have increased again.Why? Because the one good thing the pandemic did for the travel industry was help advisors understand that they should charge fees. They did a lot of work canceling and rescheduling bookings – often for no financial compensation.So, what kind of changes have advisors been making this year? There are three I’ve seen most frequently:

  1. Increasing Fees Overall
  2. Changing Structure from Retainer/Annual Fee to Per Trip Fees
  3. Putting More Rules in Place

Increasing fees is something many advisors are doing because they recognize they do a lot more work for clients than they realized, and they should be compensated for that. Prior to 2020, the most common per trip fees I heard advisors quote was between $150 and $250 per trip. (This is not a statistical average, but anecdotal information from talking to hundreds of travel advisors per year.) In 2021, the most common range has been between $250 and $500. And clients are happy to pay it. Make no mistake, $500 is the top end of the range – some advisors charge far more than that.While the retainer model for fees was gaining traction prior to 2020, it has lost a bit of ground with people traveling less frequently. As a result, many advisors are shifting from an annual fee to a per-trip fee with the intention of going back to a retainer fee when travel stabilizes. They want to be fair to their clients and know that this will pay off in long-term loyalty and increased referrals.Many advisors who charged fees for a long time recognized that their per-trip fee wasn’t enough to cover booking, canceling, rebooking, canceling, and rebooking over and over again. Some have taken the approach of adding cancellation and rebooking fees that are charged in addition to the per-trip fee. Some have simply increased the per-trip fee to incorporate them all. The bottom line is they realize that there are many times when the amount of the fee isn’t sufficient to cover the work they are doing.Several advisors I have chatted with have kept detailed notes on how much time they have spent on the booking/canceling/rebooking process and realized that they were making just a few dollars per hour (without consideration of commission that they may or may not receive). This has led to a thoughtful analysis of their fees and procedures. This is something I encourage everyone to do.It is always a good idea to evaluate your business practices on a regular basis and fees are included in that. With demand for travel advisors at an all-time high, you have never been in a better place to command well-deserved fees for your time and expertise. Consumers are far more likely to work with an advisor than ever before. And once they do, they are more likely to continue to do so because they realize how much more enjoyable it is to travel with the assistance of an expert!