How to pivot to the fee model: Travel Weekly

Jamie Biesiada

Fees have remained a hot topic in the travel agency space in recent years, especially the past two after the pandemic shone a bright light on the ways relying solely on commission for income is lacking.

More and more advisors have started charging fees in some way. Some are charging flat planning fees. Some charge by the hour. Some are even moving to membership and subscription models.

But what’s a longtime advisor to do with clients whose travel they’ve planned, for free, for decades?

That question is on the mind of Donna Wolfe, an advisor with Plaza Travel in Woodland Hills and Palm Desert, Calif.

Wolfe called into the Trade Secrets podcast and described her predicament. She charges every new client fees, and she’s had no resistance. In fact, Wolfe said, some clients are even asking her to charge them more because they value her services and expertise so much.

But she has clients she’s worked with for two dozen years. She’s never charged them fees. So, Wolfe asked, “How do I tell them I’m worth more now than I was before?”

Trade Secrets guest Jamie Jones, president of WhirlAway Travel in West Chester, Pa., fielded Wolfe’s question. Jones’ agency charges fees and also recently started offering memberships to clients who book travel frequently.

“Transparency is the best policy, and a lot of people don’t know how we get paid by our suppliers,” Jones said. “They don’t know that we get paid only if, and until after, they travel.”

So, in recent years, she started having frank conversations with clients. She explained how advisors are paid and found that many clients were surprised commissions were both so low and only paid if and when a client traveled.

Wolfe’s situation was quite close to home for Jones, it turns out. Her mother had a client for whom she regularly planned multiweek vacations. She charged him a nominal fee, something around $200. Jones asked her to flip the table and ask the client what he thought her services were worth. He immediately offered her a fee of $1,200 for a three-week cruise.

“If they’ve been clients for 20 years, you should be able to have a conversation with them and say, ‘Look. This is what we’ve encountered over the past two years. This is what I’ve learned about my business This is where I’m moving forward, and I want to be a little bit transparent with you on all of this,'” Jones said. “I think people really appreciate it, and really, we always hesitate about those clients we’ve had for so long. But they’re the ones that value us.”

For more on fees — including the pros and cons of charging them, an in-depth look at an agency that charges fees and another that doesn’t and how to avoid feeling like your clients own you if you charge fees — listen to the latest episode of Trade Secrets wherever you listen to podcasts. If you’ve got a question of your own, whether it’s fee related or about something else entirely, feel free to call the Trade Secrets hotline anytime at 201-902-2098.

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