Travel Agents – Are You Being Ripped Off?

Right up there with real estate agents and used car sales people, travel agents are subject to much suspicion when it comes to sales tactics and prices. But are you really being sized up and ripped off every time you walk into an agency or book a holiday?

The answer is yes, you will be sized up and yes, given half the chance many agents will overcharge, some by as much as they can get away with.

With the great resources available on the net most travellers will not walk into an agency until they feel they have a good handle on their destination and current prices. Yet no matter how savvy you are it’s still worth knowing how agents work before you decide to use one.

There are two aspects to the way agents work in Australia that affect the service you are given. The first is the way agents are paid. Second is the pushing of particular agency ‘preferred’ products like tours (with high commission levels) onto the customer without disclosing this conflict of interest.

No real newsflash here: agents are paid on commission. But people might not realise that base pay rates are so low, agents need every dollar they can squeeze out of you. The pay structure generally works like this:

* The agent is paid a base amount, which is a paltry sum at best. The base amount is fairly consistent amongst the major agencies, and will go up slightly the longer the agent stays in the job.

* Extra income is based on commission paid against the revenue agents bring in. Different levels of revenue are made from every product they sell, from very little (say a hotel transfer) to up to 50% revenue for travel insurance. ‘Preferred products’ such as tours or flights will have higher levels of revenue.

* Of this total revenue, agents are paid a monthly percentage, usually on a sliding scale (the more the agents bring in the higher the percentage they get). This pay scale will depend on the agency and some are more generous than others. Without this commission the base amount is barely enough to live on (we are talking burger flipping rates).

* There is massive pressure on agents to hit monthly revenue targets (aside from actually making a living), and thus the job has a very high turnover rate (1-2 years is a fair stint as a travel agent or even store manager).

* But what about the perks? Agents fly all the time right? In short there is no particular savings on flights at present. Some agencies are better than others but the perks of the job are almost non-existent compared to how it used to be. Agents are not always travelling and when they do it’s not as cheap as people think. For that you need a job, or your dad or mum needs a job, with Qantas.

* Some companies overseas pay differently so the focus is on customer service rather than sales. We are not so lucky.

The fact that the job is commission based seems to be missed by many customers who think agents are free to give advice all day as that’s what they get paid for. The reality is that they make very little unless they actually sell you something; it’s a sales job pure and simple.

This pressure on agents can lead to some very dubious practice.

So what could be loosely defined as a situation where somebody is being ripped off? There’s a big difference between paying extra for the agents time and them overcharging you by hundreds, or even thousands, on your holiday.

Standard booking fees at most agencies are $50.00 – $100.00, depending on the product being sold (less for domestic travel). These fees can be waived at some agencies rather than losing a sale if you are price matching or bargaining hard with the agent.

These fees are not a huge price to pay for what might be hours of the agents time (and remember the agent only gets a small percentage of that fee – most goes to the agency), but if you are paying any more than the standard fees, you are paying too much.

The most likely chance you have of being ripped off is if you have failed to shop around, and get caught up in the agent’s enthusiastic sales tactics (always beware the most upbeat and enthusiastic agent).

Agents will size up how much you know about your destination, the current price of flights and accommodation before quoting you a price. If you tell the agent “it’s my first time away” your chances of paying way too much increase dramatically.

Travelling to an out of the way destination might fall into this category as well, or when navigating the maze of round the world tickets. While it’s easy enough to book RTW trips on the net many people still stick with an agent, and leave themselves vulnerable to overcharging in the process.

Also, and unfortunately so, times of grief or any urgent need to get yourself on a flight are also seen by many agents as a time to cash in on vulnerable customers.

In terms of flights, agents will usually have minimum or net rates that they are free to add whatever extra they can get away with. This is where you can be overcharged if you haven’t shopped around. There is only a minimum, not a standard or maximum price for flights.

Consider as well that some agents are better than others at finding cheap flights. A high quote might just be a lack of knowledge of the destination/airlines. Many agents will have spent less than a year in the job and it can take time to learn how to get the better deals for customers, especially on out of the way routes. Another reason to check online first.

Yet another area in which to be careful is with refunds. It is not uncommon for some angents to overcharge you to cancel flights or tours. This can be done simply by the agent changing the terms of the agreement between you and the agency when you first pay a deposit or in full (as you have no direct contact with the airline). So what might have been a $350.00 cancellation fee on flights can be easily be turned into a non refundable ticket without the knowledge of the airline or tour company. Importantly this is not a standard practice (some agancies have measures in place to stop this) but it does happen. Be really careful and check elsewhere before you commit to a non refundable airfare!

The second and perhaps most dodgy aspect of travel agency practice is the pushing of preferred products onto customers.

This is not technically a rip off, but if you’re after unbiased product advice steer clear of most travel agents. The major agencies will have certain tour companies and even airlines from which they will get higher commissions (which can be double that of other tour companies they might sell).

So you’re booking a tour in South America and want some advice on a tour company? Chances are you will be pushed into using the agencies preferred supplier as they make more money out of you that way. As yet there is no legal requirement for agencies to declare this conflict of interest. Just look around the shelves of the major agencies and it will be clear from the uniform brochures who their preferred suppliers are.

This is not to say these companies are not a decent choice, just be aware any advice is not without considerable bias. You need to make sure the tour company suits your needs and don’t rely solely on an agent’s advice on this (contact the company direct if you have any queries).

This conflict of interest can be applied to many products they sell. The major agencies will have preferred hotels and car hire companies. For almost every product travel agent dirty tricks, travel agent rip offs, travel advice, travel tips there will be a preference they give you that makes them more money. Agents will themselves often have little goals in mind when selling you a holiday.

There are always incentives from different travel companies for agents to sell their product. The incentive might be ‘sell five tours get one free’ or something similar. This is another reason agents can give you highly biased advice.

Smaller more independent agencies are more likely to give you unbiased advice as they may not have the same deals with tour operators as the major players.

If you are unsure about the charges attached to any products, simply ask what exactly you are being charged for as agents should disclose any booking fees involved (sometimes these fees can be hidden). If you are suspicious don’t fall for any pressure tactics, just walk away and check another agency or online before you book (there’s always another agency close enough).

So the bottom line really is just to make yourself as aware as possible of current pricing before you see an agent. You can still get great deals through a good agent (booking online is not always cheaper) and there is no need to be ripped off if you are savvy about your planning. Advice from a good agent on your destination can be invaluable, just take product advice with a grain of salt.

I left the job in part due to the pressure to overcharge and BS on which company customers should travel with. Most people get into the job because they love to travel, but may end up finding, like I did, that the job is not worth the stress.

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Do Travel Agents Get Free Trips? Part 2

Yes: travel agents DO travel for free

There are several scenarios that could allow travel professionals to travel for free. In a previous article, I discussed 4 ways that travel agents do come out of their pocket to pay for their trips. This time around I will explain how they also save and even travel for free.

Booking Groups Could Get You a Free Pass

There are incentives for booking groups (the fact that group travel is the most lucrative bookings in the travel industry should be incentive enough). If an agent books so many rooms (hotel) or cabins (on a cruise), they cold get a free room or cabin or money (not counting the commission) that they could use toward their room or cabin. Of course this all depends on the vendor’s group policy, quantity needed and who is assigned as group leader.

Actually you do not have to be a travel agent to get this benefit I am described above. If you are not a travel agent and you decide to book a group, if you are the group leader, you could very well get these benefits (ask your travel agent they should tell you that up front). This is the only way (outside of a frequent guest program) that a non-travel agent could get perks extended to them… so if you want to get some perks out of your trip…think in groups!

Travel Contests

Another way an agent could go free could be based on sales volume for a specific property or destination in a particular niche. Some travel vendors and agencies may offer free trips to top agents as incentive or awards for sales performance. These kinds of awards are offered as contents too! I’ve seen some really exotic destinations, life a fully expense paid trip to Costa Rica (wow!) offered to contest winners in my agency, which makes it really worth trying to get your sales

Travel Perks can be Good

Agents can sometimes take advantage of extended ‘courtesies’ or perks, which is an added benefit of being in the travel industry. We call them courtesies because no vendor is obligated to extend perks just because a travel professional identifies themselves as such. If an option for a room upgrade or car rental upgrade is available, agents will ask first if of course, and it’s up to the vendor to extend free services, amenities or perks to agents up presentation of valid credentials. These perks may also include shows, attraction tickets, tours and much more.

Agents Travel Free in the Long Run

This is the part I love about being a home-based travel professional! It really is all free in the long run! How is that? Travel professionals are allowed to legitimately write off their travel 100%. Yes, they can, so regardless if you are an agent who paid for their trip, you are in the business of travel, which makes all your travel 100% tax deductable. So if you are a travel agent, the key is to document your trip and save your receipts so you can legally write off your trips at the end of the tax year!

Just to recap, there are 4 main ways travel agents can travel for free:

1. Booking groups and getting room, cabin, or monetary credit
2. Agency and Vendor Contests
3. Perks & upgrades
4. Write-off your travel 100%

Attention All Agents: save those receipts and document, document, document!

If you are not a travel agent and you are an avid traveler, you are throwing money away! Learn how to become a part time travel agent and get the benefits of owning an online travel business!

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Build a Home Business As a Travel Agent

Going on holiday is something that many people look forward to every year, the excitement of choosing a destination, then the anticipation of waiting for your departure day to arrive and then the holiday itself. People see their holidays as a reward for all their hard work throughout the year, and that is why they need the help of a travel agent to get them the very best holiday that they will talk about the years to come. Many people think that being a travel agent is quite an easy process, you just apply for a job in a travel agents and away you go.

Today as the demand to work in a travel agent’s is rising more people are realising that they can become a travel agent and build their own business working from home. To do this there are many different travel agent courses that people can go on, many of which are online. Taking one of these courses is an excellent way to become a travel agent as you will learn all the necessary information relating to the holiday industry, in your own time. Once you have gone through this you will then be able to start your own website and take bookings on behalf of the larger travel companies. When a home based travel agent works this way they usually receive a commission on each holiday that they sell, and the amount they receive is based on each holiday. Some of the home-based travel agents earn around 20 to 40% commission on each holiday that they sell, not bad if you are selling around 10 holidays per day.

One of the advantages of being a home based travel agent is that you get to establish your own working hours, and many people with young children see this is a valid alternative to having to work set hours in a 9-to-5 job. Using websites and your e-mail address so that potential customers can contact you means that you are, in effect contactable 24 hours a day seven days a week. This means that you will never miss a sale as a travel agent working from home, something that many of the big high street travel agents are unable to do as they close for weekends and during the evening.

To be able to set yourself up as a travel agent who works from home you will need a PC, a broadband Internet connection and a telephone. These will form the basis of your home business and these will enable you to keep in contact with clients and with holiday companies. Some people then go on to have headed paper made and even business cards, but this is entirely up to you and you do not have to spend any of the money initially. Anyone who has an interest in travel and would like to have the freedom that working from home provides should certainly look into becoming a home based travel agent as it can open many different doors.

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Negotiating Rates and Fares With Travel Agents

A whole generation of travelers, it seems, are so conditioned to use the Internet for travel booking that they’re not even sure how a travel agent operates. These travelers use the hunt-and-pick method to find the best rates and fares online. And if that method doesn’t reveal an affordable price, they might start wondering if a travel agent—a real, live person—could whip up a price reduction. Many an agent has received an anonymous phone call from a would-be traveler who wants to negotiate fares and rates.

While agents do have access to unpublished discounts and pre-negotiated travel fares, most do not have the ability to negotiate pricing. Agents do not set travel fares; they quote them. When they find a better price, it usually isn’t because they lowered the fare to get your business; it’s because they literally found a lower price.

There are exceptions, of course. Every agency has different policies, and some agencies allow their agents to make a case for offering discounted fares in certain situations. To get the lower fares approved, the agent would probably have to present a competing bid that’s lower and make a strong argument for why the fare should be discounted. To be clear, this type of discount comes out of the agent’s and the agency’s commission. So the agent and agency would need a very good reason for even considering it. At a minimum, the standard commission on the vacation in question needs to be sizeable and the customer must be strategically important in some way.

In other words, a $29 hotel rate is not negotiable.

When you ask an agent to negotiate, you are essentially asking the agent to subsidize your vacation—the same way a newly engaged couple might ask the groom’s dad to fund part of the honeymoon. Many agents will respond to these requests by saying, “I’ll see what I can do.” And then the agent will search, often successfully, for a lower fare.

Real stories from the trenches

Every agent has her own set of stories involving customers who misunderstand how travel agents operate. Here are a few of ours:

Customer finds a below-market rate for a hotel room during an event weekend through our online travel agency. The customer books the room online, but does not select the right room type. The customer calls the week before the event and asks to switch the reservation to a larger room at the same room rate. Unfortunately, the hotel did not have any larger rooms left. We could not remedy the lack of rooms at the first hotel, but we did locate another room at a different hotel.
Customer calls and asks for a discounted rate on a hotel in Cabo. The dates and hotel choice were not flexible. We find the discounted rate, at a prepay rate. The customer says great, he’ll take the rate, but not a prepay basis. Hotels, like airlines, do offer discounted rates for prepaying customers. Generally, an agent can’t book a prepay rate for payment-on-arrival.
Customer calls and says she’s found a travel agent rate at a resort and would like us to book her vacation at that rate. Travel agent rates are for agents traveling; anyone booking under such a rate would have to show agent identification to the hotel or resort upon check-in. An agent cannot book a travel agent rate under someone else’s name, nor can an agent buy the room at that rate and then resell it to a customer.

The gist of it is this: agents can save you money on your vacations and business travel, but sometimes there are limitations to what they can accomplish.

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