Right up there with real estate agents and used car salespeople, travel agents are subject to much suspicion regarding sales tactics and prices. But are you 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 travelers 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.
Two aspects of how agents work in Australia affect the service you are given. The first is the way agents are paid. The second is pushing 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 realize that base pay rates are so low, and agents need every dollar they can squeeze out of you. The pay structure generally works like this:
* The agent is paid a base amount, a paltry sum at best. The base amount is fairly consistent amongst the major agencies and will increase slightly the more prolonged the agent stays on the job.
* Extra income is based on the commission paid to the revenue agents bring in. Different revenue levels 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 income levels.
* Of this total revenue, agents are paid a monthly percentage, usually on a sliding scale (the more the agents bring in, the higher the rate they get). This pay scale will depend on the agency; some are more generous than others. Without this commission, the base amount is barely enough to live on (talking burger-flipping rates).
* There is massive pressure on agents to hit monthly revenue targets (aside from making a living). Thus, the job has a high turnover rate (1-2 years is a fair stint as a travel agent or store manager).
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* But what about the perks? Agents fly all the time, right? In short, there are no particular savings on flights at present. Some agencies are better than others, but the job’s perks are almost non-existent compared to how they used to be. Agents are not always traveling; when they do, it’s not as cheap as people think. 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 sell you something; it’s a simple sales job.
This pressure on agents can lead to some very dubious practices.
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 agent’s time and 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 sold (less for domestic travel). Some agencies can waive these fees 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 agent’s 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 prices, you are paying too much. The most likely chance 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 of the most upbeat and active 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. Traveling to an out-of-the-way destination might fall into this category or when navigating the maze of round-the-world tickets. While it’s easy to book RTW trips on the net, many people still stick with an agent and leave themselves vulnerable to overcharging.
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. Regarding flights, agents will usually have minimum or net rates and 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 that some agents are better than others at finding cheap flights. A high quote might be a lack of knowledge of the destination/airlines. Many agents will have spent less than a year on the job, and it can take time to learn how to get better customer deals, 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 agents to overcharge you to cancel flights or tours. This can be done simply by the agent changing the agreement terms 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 easily be turned into a nonrefundable ticket without the knowledge of the airline or tour company. Importantly this is not a standard practice (some agencies have measures to stop this), but it does happen. Be careful and check elsewhere before you commit to a nonrefundable airfare!
The second and perhaps most dodgy aspect of travel agency practice is pushing 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 central agencies will have individual 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 agency’s preferred supplier as they make more money from you. There is no legal requirement for agencies to declare this conflict of interest. Just look around the major agencies’ shelves, 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, be aware any advice is not without considerable bias. You need to ensure the tour company suits your needs and doesn’t rely solely on an agent’s guidance (contact the company directly if you have any queries). This conflict of interest can be applied to many products they sell. The primary agencies will have preferred hotels and car hire companies. For almost every product, travel agent’s dirty tricks, travel agent rip-offs, travel advice, and travel tips, there will be a preference they give you that makes them more money. Agents will often have little goals in mind when selling you a holiday.
There are always incentives from different travel companies for agents to sell their products. The motivation 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 provide you with 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, 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; walk away and check another agency or online before you book (there’s always another agency close enough).
So the bottom line is to make yourself aware of current pricing before seeing an agent. You can still get great deals through the right 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 the right agent on your destination can be invaluable; take product advice carefully. I left the job due to the pressure to overcharge and BS on which company customers should travel with. Most people get into the position because they love to travel but may find like I did, that the job is not worth the stress.