Secrets of travel agents revealed

• October 31, 2013

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THEY smile while they take your money, and in return you trust travel agents to plan your dream holiday. But should you?

Sure, most do their best to find you a great deal and are upfront and honest. However, there are others who have some tactics up their sleeves to bring in some extra money.
Former Australian travel agent Luke Goudge, who is releasing a book titled You Don’t Need a Travel Agent in January, reveals the secrets and tricks of the business.

The salary of the humble travel agent
Typically, most travel agents’ remuneration involves a base wage plus an additional commission. The amount of commission paid to agents is either a percentage of total profits made over the previous month, or set bonuses that are paid out upon reaching sales milestones.
Effectively, the more revenue a travel agent brings into the business, the more they will get paid. This is the devil in the design, as it encourages some travel agents to inflate their prices for unsuspecting holiday-makers in order to increase their own pay packets.

How travel agents earn their commission
Almost every travel product pays a commission – from airfares to accommodation, travel insurance and transfers. The travel companies that provide the largest commission percentages will typically be those that will be chosen for your quote. So beware – the suggested itinerary may be guided on the highest commission return for the agent … and not on the quality or convenience of the services.
For example, if one airline is offering a 4 per cent commission on each airfare, and a second airline has a 12 per cent commission attached to fares on the same route – though with horrible connection times – which one do you think will be offered to clients?
A considerate agent will offer you the airfare that is both within the limits of your budget, and best suits your itinerary. Unfortunately not every agent is, and they all have targets to meet.

How travel agents can hold flights to their advantage
Travel agents have the ability to ‘hold in’ seats with many airlines for a number of days – meaning that they can reserve your seat, lock in an airfare and allow you time to decide. Some agents, however, will choose to use this for their own benefit.
An agent can see if there is limited availability of discounted seats for any given flight, by holding the remaining ‘cheap’ seats in under bogus names you will only see prices for the more expensive seats still available. The higher prices will even be reflected on internet booking engines.

Don’t always believe the price on the screen
Have you ever waited patiently for a quote for your flights or accommodation, only to have the travel agent turn the computer monitor towards you to show the price on the screen? Don’t be fooled, this price may not be what it seems.
Within most booking systems used by travel agents there is the ability to adjust the prices that are shown on the screen. This can be used to reflect discounts offered to the client, though more often than not it is used to inflate the price.

Why a travel agent really wants to know your budget
There is a double meaning to why travel agents want to know your holiday budget. Firstly, it gives the agent an indication of the standard of accommodation and airlines that the client might consider. The other reason is to see how much room they have to move in increasing their prices.
Travel agency clientele are generally wary of indicating their true budgets, which means that travel agents will often resort to trickery to obtain this information. Asking about your last holiday destination and where you stayed, or offering an assumed budget and waiting for your response are just two ways that a sneaky travel agent can try to ascertain how much you intend to pay.

Businesspeople and first-time travellers beware
When a smartly-dressed person enters a travel agency, the unscrupulous agent will see dollar signs. Business attire signifies a lot of disposable income and you may find yourself being charged accordingly. And a passing joke that you intend on spending your children’s inheritance will often result in you being charged – you guessed it – your entire children’s inheritance.
Another easy target is first-time travellers – those whom have never travelled abroad turn to travel agents to guide them through what can be a nerve-racking experience. Those that have not researched how much they should be paying for their trip may find themselves being charged a lot more.”

The illustrious ‘package holiday’
Clients will often be lured into stores with shopfront advertising promising big savings when booking a package holiday. Flights, accommodation and transfers all locked in at a low price, what is not to like about that?
The reality is that most package holidays offered to clients are combinations of low-season flights, any accommodation offering a ‘stay/pay’ deal at the time and shuttle transfers to and from the airport – with no real noticeable saving to be made by purchasing them all together. They dates are often restrictive, the discounts (if any) will be minimal and the price can be subject to scarce availability.
So why offer a package if there is no real benefit to the consumer? The appeal of a package holidays is what leads potential clients into travel agencies to find out more. You may soon enough find the travel agent is suggesting alternatives.

Service fees and a ‘fair margin’
Service fees are charges are added by travel agents to the final price of your holiday booking in order to increase their commission. If you haven’t seen a service fee before this is because most agencies won’t state what this amount is on your quote – instead it will be added into your airfare, accommodation or total package price.
Travel agencies are allowed to charge extra fees in order to gain a ‘fair profit margin’, although these fees can range from a few dollars into the thousands. A fair margin can be made on any service your travel agent books for you – with the exception of travel insurance and travel money cards which they cannot charge upon by law.
Also, cancellation fees are largely inflated when booking through a travel agent as they will often account for ‘commission recall’ – which means that in the event of a cancellation the agent will recoup enough money from the fees to cover any profits they may lose on the sale.

Some common misconceptions about travel agents:

1. Travel agents have access to many more travel options than I have
Contrary to popular belief, travel agents are not one click away from every flight permutation, day tour or accommodation option in a given city. While it is true that they are given access to booking engines for many suppliers, ultimately the client is still going to be limited to the choices of the agent and the travel suppliers that the agency has a working relationship with.

Low cost carriers (easy Jet, Ryanair and Air Asia among others) do not pay commission to agencies as it would impact too heavily on the small profit margins they make on each seat. For this reason, you will find that you will never be offered these airlines as an option unless you ask for them – even if you indicate that you are looking for the lowest airfare possible.

2. Travel agents are less likely to make mistakes than you
It’s assumed that a travel agent will be able to effortlessly organise our travel plans without a hitch, when in reality this is not always the case. They may be dealing with a number of clients at any given time which can result in potentially disastrous errors – when even something as simple as a misspelt name can potentially ruin a holiday.
Travel agents are given the responsibility of making sure your holiday is exactly what you want, booked correctly and at an agreeable price. But the agent’s real responsibility lies in generating profits for their agency. The end result is overworked agents taking on new clients to bring in further sales, sometimes to the detriment of established clients.

3. Travel Agents are experts
It is commonly regarded that travel agents are experts in their field. It is granted that they are experts in using their booking systems to organise your holiday, and quite a few of them are certainly well-travelled. Is this enough though for you to place your dream holiday into their hands?
Believe it or not, many travel agents use many of the same information services that you and I are able to come across browsing the internet. Access to Google, Wikipedia and TripAdvisor gives you the same advantage in destination knowledge that an agent would have. While travel agents are constantly kept up-to-date with the latest promotions and products by travel representatives, this knowledge is restricted to the suppliers that the travel agency deals with.

4. Travel agents have been there before
Whether you’re looking for a tropical getaway to Fiji or a cultural experience in Tuscany, chances are your travel agent will say that they have been there before. They may also suggest properties that they have stayed at previously as well as activities they did while there. While it may be true that they have visited the destination before – they may also be making it all up.
One of the ground rules for travel agents who are not well travelled is to ‘fake it until you make it’. Once an agent has sold enough holidays and received enough feedback, it is easy to talk about a destination as if they have been there themselves.
The truth is that they could be making suggestions based on second hand information, rather than on personal experience.