ntil October 1997, it was highly unusual to pay service fees to travel agents for booking and ticketing flights. But since last fall, the industry has changed.
If you assume a travel agentís income comes from commissions travel-related businesses pay, youíre right. So why should you pay fees for services that are part of a travel agentís job?
The one-word answer is "survival," says William F. Kickel, owner of Uniglobe Tradewinds Travel in Cleveland. "We simply canít operate without these extra fees." Marcia Herms, travel agent with Carlson Wagonlit B. Barnes Travel in Austin, Texas, echoes that belief. "Typically," she says, "travel agents today are paid less than they were 20 years ago." Consequently, itís become quite common for travel agencies to charge fees for services that once were free.
When the airlines restructured and decreased their commissions last fall, many agencies responded by adding fees. Technically the agents receive an 8% commission, as they did 20 years ago--but now thereís a $50 commission cap.
Hereís an example of how the new structure works: If an airline ticket costs $1,000, the agentís commission is $50--even though 8% of $1,000 is $80. It doesnít matter now if the ticket costs $1,000 or $10,000, the cap still is $50. You can see why commission cuts have resulted in service fees passed on to the customer.
Art Stenstrom, travel agent with Carlson Wagonlit/The Travel Center in Des Moines, Iowa notes, "I work on a straight commission [from the airlines], and if it were up to me, fees would be waived." As it is, Stenstromís agency is one of the few in Des Moines that has not implemented a fee-for-service structure. "We charge a one-time $10 fee for Ďvoidsí [cancellations before the ticket gets into the system], and a $10 fee for handwriting tickets, such as tickets paid with cash on Southwest Airlines, but thatís it." Stenstrom says, "Weíre holding out as long as we can so we donít upset our customer base."
Kickel notes that while his agency has received a few negative comments since adding fees, "We arenít aware of anyone who hasnít booked because of them." He has found that more often than not, the infrequent leisure flyer doesnít mind paying a $10 fee. But when it comes to business travelers, those who typically book frequent flights, service fees have had a harder impact.
If youíre a frequent flyer, for business or pleasure, you may be able to get around paying service fees. Ask your agent to waive the fees--the agency might if you have a long-standing relationship. You may not be offered a fee waiver, but it pays to ask. If you book 10 flights a year, for instance, and the agency adds a $10 fee for each flight ticketed, it might be willing to waive that $100 to keep your business.
After all, agents know you can shop around to find an agency that doesnít charge fees. If you do look around, understand that itís up to the individual agency to add service fees, and, if so, at what rate.
| Make the credit union
part of your vacation plans:
We can help with financing
and credit cards.
Ask your agent
to waive the fees--
the agency might if
you have a long-
|Services with fees
Unlike commission rates, which usually arenít discussed with customers, you should be told up front what fees youíre being charged. If the subject doesnít come up, ask.
Because each agency sets its own service fees, rates vary, but generally they range between $8 and $20 per transaction. Expect to pay, on average, between $10 and $12 for booking an airline ticket. If you make your own airline reservation, through the airline or the Internet, expect to pay between $10 and $20 for having a travel agency ticket it for you. If you use a coupon for a discounted fare, such as those found in entertainment books, you may be charged a service fee. If you decide to exchange your airline ticket, youíll usually pay $75--a penalty paid to the airlines--but you also may pay a fee to the travel agency.
Some agencies also charge fees for booking cruises, rail travel, and making hotel and car rental reservations. These service fees generally are the same as airline booking fees. Travel packages, such as airline/tour combinations, have not yet been hit with added fees, but itís likely these too will be targeted in the future.
According to AAA Wisconsin, some AAA clubs recently started charging for some travel services. But just as each travel agency makes its own determination about fees, so do AAA clubs, so policies likely will vary from city to city.
|Should you skip using travel agents?
Because many travel services now have extra fees, you may wonder if it makes sense to do your own booking. After all, if youíre on-line, you can make your own airline and hotel reservations. And even if youíre not on-line, you can access airlines and hotels directly by calling them yourself.
Rule of thumb: If youíve been there, done that, and have firsthand information about your itineraryís hotels, airfares, and schedules, it may be worth making the reservation yourself. Be aware of these pitfalls: First, most travelers do not know which airlines fly between specific gate cities. Second, Stenstrom points out, "Every day there are changes in airfares, and many people donít know that there are usually a variety of fares for the same route, on the same airline, at different times of the day."
Even though more people are using the Internet to purchase airfares, Herms says, "People tell us the Internet can be confusing, while others are leery of giving out credit card information. Still, we recognize that while the Internet hasnít affected our business yet, the day is coming when it probably will."
If your goal is to avoid service fees and find good fares, you might consider making your own travel arrangements. However, you may pay more by doing it yourself. Kickel says, "Many people check around by calling various airlines, trying to find the best prices. But they end up calling here anyway. I think that speaks for itself."
Other reasons to use a travel agent: Internet users and those who book fares through one airline donít always get a true comparison of prices with other airlines. Good travel agents belong to organizations that offer discounted fares. They also have highly sophisticated computer tools, not available on the Internet, allowing them to search for the lowest fares.
It takes a lot of time to look for the best travel deals. Consider the value of your time before you decide to do it yourself. Also consider that a travel agent has an insiderís edge. That means good agents have a superb knowledge of their industry, and will use their expertise to shop for the very best travel deals for you.
If you donít believe your agent is going that extra mile, look for someone else. Stenstrom says, "You can go to an auto parts store, buy the parts, and install them yourself. But will your car run right?" Good travel agents make sure your trips run smoothly. That may be the best reason of all for sticking with them, service fees and all.
| If youíve been there,
done that, and have
about your itineraryís hotels,
airfares, and schedules,
it may be worth making
the reservation yourself.
A travel agent has
an insiderís edge.
Good agents have a superb
knowledge of their industry
and will shop for the very
best travel deal for you.
Table of Contents
Year 2000 Bug Travel Agent Fees Fast Facts
|©1998 Credit Union National Association, Inc.|