What's In A Service Fee?

What's in a Service Fee?

Travel Professionals Define The Value of Their Time

As requests continue to pick up, many travel professionals are beginning to look beyond commissions as a source of revenue. If the events of 2020 have taught us anything, it is that the most meticulously-planned events for the very best clients can fail to commence. And if the clients don't take the trip, the commission does not get paid.

For a long time, Dugan's Travels has encouraged agents to develop a solid bank of knowledge and experience that clients can depend on, and to charge accordingly for access to those benefits. After all, your product is the unique knowledge and experience you have developed. That is the draw. That is what your clients are really paying for.

And although some have taken the leap in this post-COVID world, there are others that are still apprehensive about charging a fee directly to their customers.

So for those that are still on the fence, here is a quick primer about service fees.

Types of Fees

Fees can look like different things to different agents. But, they generally fall into the following categories.

RETAINER or "PLAN-TO-GO" FEE

This a charge for research and planning. The retainer fee or "plan-to-go" fee is customarily charged prior to any actual work taking place.

BOOKING FEE

As the name suggests, this is a charge for booking with your agency. The booking fee is generally charged at the time of booking, meaning that an agent could potentially do work prior to any financial obligation or deposit being made by the client.

CHANGE FEE

A change fee is charged to the client when they request alterations to their existing booking. This fee can include price adjustments, date changes, occupancy adjustments, and more.

CANCELLATION FEE

When clients elect to cancel, it is almost guaranteed that the commission will be severely impacted. Although there are instances where commissions may be protected in part or in full (e.g. when the client has purchased travel protection), some advisors elect to charge their clients a fee for facilitating the cancellation. This may be treated as substitute compensation due to lost booking revenue, or as a means of paying for the time and effort that will be exerted by the agent to make the cancellation and track the client's refund.

Charging the Fee

No matter what type of fee is chosen, it is important that the following guidelines are followed:

1. The fee is disclosed to client at time of booking (and ideally agreed to by them in writing)

2. Dugan's Travels merchant account is used

3. The service fee is reported to Dugan's Travels in Agentmate

And, of course, the fee schedule chosen must feel genuine and true to you!

By incorporating fees into your business model, you reduce the time spent working for free. Just as you invest time and money into developing your craft, always remember that your investment is in building a better travel advisor - and that access to that rock star advisor should not just be compensated by a commission that you may (or may not) receive from the supplier.