service fees

Because I’m worth it… The service fee debate

There were some interesting findings in research conducted by the University of Pretoria’s Professor Berendien Lubbe and colleagues on service fees. You may recall ASATA asking you for input on the topic recently.

Other than the obvious finding that consumers remain unaware of the value attached to travel agent services, the study makes an interesting suggestion: Differentiate your service fees based on the level of knowledge of consultants, the quality of services rendered and the level of customisation required by the consumer.

The report didn’t survey the end consumer. Rather it looked at agents perceptions of the service fee situation so it does have its limitations, but it remains fascinating that consultants don’t believe consumers value their role in straightforward consultation, whether it be for domestic or international travel. Consumers don’t necessarily understand the value of time saved and specialist knowledge provided by agents.

Ironic when you consider we keep getting told agents need to reinvent themselves and become ‘consultants’ providing expert knowledge of destinations, value-added quality service and cater for customised needs.

The agents who took part in the survey ASATA sent out on behalf of the University of Pretoria apparently believe consumers value and are willing to pay for the traditional services of assisting with visa arrangements, group bookings and issuing flight documents.

The report also profiles the type of customer more willing to pay for travel agency services: men more often than women, between the ages of 35 and 55 years, falling within the categories of highly qualified and higher levels of information.

Interestingly, only about half of the agents who participated in the study, said they explain to customers why certain fees are charged, which could point to the unwillingness of consumers to pay service fees.

The report advocates informing your customer about the value of the service you provide and advises owners to solicit input from their consultants when structuring service fees because they are the main contact point between the travel agency and the customer.

Finally, the report cites the three greatest challenges to determining what service fees are charged: Assessing the indirect cost of a service to the travel agency; assessing the cost of the time spent with a customer and assessing the prices that competitors charge for similar services.