I looked at thisthread.
I usually do a lot of the research myself but then get a travel agent o do the booking for peace of mind, and other reasons mentioned in that thread.
However, who actually pays the travel agent? I know some will demand an upfront fee to prepare an itinerary, but I’ve never come across those.
If you can get a good fare from the Internet, if they have to match it, who actually funds them?
Er, the customer? I’m not sure I understand what you mean. If you book a flight through an agent, you pay the agent, and the agent (presumably) pays a smaller amount to the airline, because they get special agent’s rates, and keeps the difference as their fee. Or do you mean a hotel booking, where you pay the hotel when you check out? In that case, I imagine the hotel pays the agent commission.
Edit: I see you’re talking about getting the agent to prepare the itinerary and then booking it yourself. Well in that case, obviously the agent is SOL. But often agents have access to deals and packages that you wouldn’t be able to get on your own - e.g. a flight and a hotel for the same price as you 'd pay for the flight alone. So if you book it yourself, you will end up paying more.
Again, the agent will have an agreement with the airline whereby they can book flights for X% less than the fare advertised to the public, and/or a commission for each customer they bring in.
That’s sort of what I was driving at- the travel industry (airlines, hotels whatever) would be giving a kickback (whatever term you like) to get the Customer to use their planes or beds.
The previous thread mentioned that you (the buyer) are the employer of the travel agent (that is from Ducati who has extensive experience in the industry). And as such they will bust their gut to get you the lowest fares etc.
But wouldn’t it be more in the agents interests to point you to a carrier where they got a bigger return?
I’ve been reading a bit about this lately and there are a couple of methods.
The first is the more traditional where the airline gives an agent discount and that is what they get paid but more often now they’re moving to a service fee model. So you agree up front that for booking your flights, your accomodation for x days and researching 3 excursions you will pay them $100 or you negotiate an hourly rate. In return you get all of your airfare and accomodations at the exact rate they are charged.
I prefer not to use an agent, for me the research and planning are almost as much fun as the vacation themselves but for people who don’t put that kind of time into it the survey results are pretty clearly in favour of using an agent. There is a luxury travel show that’s either going on now or just ended and they’ve released some results of a satisfaction survey that says that self booked travel has a 42% satisfaction rating whereas for agent booked travel it’s 72%. (please note that these numbers are from memory as I’m in the office today and was reading the article at home)
Clearly that is one specific market with a high demand customer base and it’s probably slanted by the way the questions are asked but I still think that agents have a lot to add for those who are uninterested in the planning process. Based on what I’ve been able to save myself by investing time I would imagine they could also save the cost of their fees for many passengers as well.
No one gives travel agents discounted travel “items”. You’re thinking retail - buy for X, sell for Y.
No, since the 1800’s travel agents have worked on straight commission for the most part.
Whether you called the airline or an agent, your ticket was $300. If you called Delta, they kept 100%. If you called an agent, you paid them 100%, and they paid Delta 90%, keeping the difference.
Why the difference? From 1880 to 1995 or so - cost. If you called Delta, you used their phone line, personnel, computer time, envelopes, stamps and so forth to get your ticket.
If you called a travel agent, you used our resources which are far cheaper. And we would bring you your ticket and documents for the trip to your home or office. It was worth 10% to the airlines and other entities to bring them business and do most of the legwork.
In virtually all settings - hotel, car, tours, airline tickets, cruises, a 10% commission was standard for many years. Some cruise line or car rental company might have a month now and then where they would pay 13 or 15% or something like that, but by and large, we lived on 10%.
International airline fares and tours were subject to 11% or more if you added a “tour code” we looked up in JaxFax!
If you were a large volume agency, you could negotiate an over-ride structure to get another 1-5% in addition to the standard 10%. A million wouldn’t do. We had to sell about 12 million annually on Delta alone to achieve this. We did it on a couple of others as well.
Eventually, Delta started deciding they needed to cut costs, and overnight, they announced that travel agent commissions would be capped at $50, no matter the cost of the ticket. London for $1200? Not $120 anymore. $50. It’s on the dresser, bitch.
We fought it for a long time, but other airlines followed, some hotels and cars too, what with this Internet thing coming along.
I was lucky to sell my agencies to someone in that time before the internet completely decimated the travel agency industry.
Many agencies have survived by charging fees for consulting or whatnot. Most frequent customters know what the deal is and support the agency by paying the little extra in exchange for simplicity. Yes, with the advent of the internet and technology, the average person can access information, goods, and services that only the travel agent could before. And since it’s all computerized, there’s often no need for the agent. As a result, many smaller agencies have closed since the mid-90’s. Ticket jacket? Boarding pass? What are those?
While I love the internet and all the information it brings, I despise what it’s done to the travel industry. Yeah, if all you want is a ticket to Cancun and a cheap hotel, you can get that done pretty quickly yourself, and just as cheap as an agent these days.
And the truth is, you can find some pretty arcane information about virtually any hotel anywhere because someone has posted it somewhere.
However, when it comes to a honeymoon, vacation, or just traveling from A to B, it helps to have someone who’s been there, done that, has the pictures, and more importantly, has the personal knowledge that you just might miss otherwise.
My mom opened her first travel agency when I was 6. Well over 40 years ago.
The changes have been staggering, but it would make me sad if technology put an end to an entire industry and lifestyle. Like buggy-whip makers. Poor bastards.
Maybe I’m being stupid, but doesn’t that mean that the travel agent* is* getting a discounted travel item, namely, the flight, which Joe Punter would have to pay $300 for, but Bob Agent can get for $270, thus keeping the $30? Is it just a matter of semantics?
I suppose you can call it semantics, but agents don’t ever “buy” anything and then sell them at a profit.
The back office arrangement is thus: All airlines and travel agents belong to the ARC- a bank, if you will. Agent writes $4,000 worth of airline tickets on say, 3 airlines for the week. Saturday, we do a report, determine the numbers, and deposit 90% of 4k into our ARC account. ARC takes the money and distributes it accordingly to each airline. Agency keeps the 10%, or whatever it is these days.
They call or web Hertz or the Hyatt, make the reservation, Bob shows up and pays, and at the end of the month, Hertz and Hyatt mail a check for 10% of Bob’s bill.
Cruise lines and tours? Agent makes the reservation, mails a check for 90% of the total cost to the cruise line, and they mail the agent the cruise documents - tickets, if you will.
No widgets exchange hands. Capiche?
I’m retired now, but I was a corporate travel consultant for over 20 years. Large companies with a worlwide presense.
These are companies that spend a minimum of 300 million dollars per year on travel. If our services and experience can save them, say 80 million, our company will negociate a fee arrangement. We even had a dedicated web address that they could book on which included all relevant discounts the company recieved.
One way to think about it is that some percentage of the cost of the ticket is dedicated to sales and support costs. If you buy the ticket directly from the airline, they have internal groups that get credited for that cost (because they maintain the website, answer the phones, etc.). If you buy from an agent, then the agent gets that money. The ticket is always $270, and the sales and support contract is always $30.