How It Works: Why I Charge A Planning Fee
Also known as “Let’s Talk About Commission.”
Imma dish some tea about the industry here, so settle in.
From the first time I put down on paper what I wanted Anthology Travel to become, I knew I wasn’t going to be an old-school traditional travel agent relying solely on commission.
A commission-only model didn’t make sense to me; in essence, it means that as a business owner, I’ve ceded almost all decision-making authority about my revenue to outside third-parties. If they decide to reduce or eliminate commission? Whoops! There goes my business. (I see you, Marriott, with your 7% commission on groups…)
To me, commission isn’t compensation for my time, knowledge, or experience. Commission is an incentive provided by a wholesaler or supplier for me to book an element of a trip through them versus a different channel. They’re trying to drive sales, so they offer commission to agents who bring them those sales.
Does that make booking through wholesalers or other channels that provide commission wrong or somehow bad? No, not at all. There can be tremendous advantages to booking through a wholesaler - for instance, they drive so much volume that if there’s a problem, often their travelers will be heard or taken care of before someone who booked on their own.
Likewise, booking through a supplier can be the smartest possible way to book. In a destination I’m not as familiar with, or where there’s some physical risk involved (see, e.g., Iceland, New Zealand, safari, etc.), I want to know that there’s someone there on the ground for you if something goes wrong.
In the old days (read: until the late 1990s), travel agents made a ton of their revenue from commission paid by airlines for air ticketing. When the internet really got cooking, and airlines realized they could reach people directly, they more-or-less cut off commission to travel agents, causing a dramatic contraction in the industry.
Today, consumers have more travel choices available to them directly than ever before. It’s entirely possible for an internet-connected traveler to plan and book a complex round-the-world itinerary completely by themselves, bypassing the travel agency industry altogether.
So, why would anyone use a travel advisor now?
Take the following with a grain of salt, as it’s just me theorizing, but:
Millennials (obvious caveat: #notallmillenials) are getting to stages in life where they have more disposable income and more vacation time. They’re the first generation to be able to look up anything they want online, so there’s nothing novel for them about being able to book their own airfare…they’ve never experienced anything different. Put those together with increased responsibilities both at work and at home? You have a perfect recipe for outsourcing anything they don’t naturally enjoy.
Generally speaking, we’re working more than we did even ten years ago. Our constant connectivity has its perks, sure, but also its drawbacks - for many people, it’s hard to find time when you’re not receiving work email regardless of whether it's the weekend or after hours. Lack of time for consumers = more opportunity for travel advisors.
Again, speaking broadly, we (at least, people in the consumer segment I’m targeting - luxury) are outsourcing more of our lives than ever. We take Uber rather than drive ourselves; we order Blue Apron or Seamless rather than go to the grocery store; we have personal trainers rather than gym memberships we don’t use (well, some of us might have both of those things…); we have subscription services for clothes and cosmetics so we don’t have to go to the mall; etc.
Great, Kate, but what does all of that have to do with charging a service fee?
Here’s the thing: I’m not really selling you travel; I’m selling you time.
Every minute you don’t spend researching a vacation online is a minute you can either use to a) work more and make more money yourself or b) spend doing something you like doing more than planning travel.
If you’re someone who loves to plan travel, that doesn’t make any sense to you…you love it! You love the thrill of the hunt, that feeling you get when you discover the perfect boutique hotel. You love making yourself a spreadsheet of restaurants you want to try and then plugging them all into a custom Google map. Awesome…you should definitely plan your own trip. Have a blast, post tons on Instagram, and let’s have brunch when you get back so you can tell me all about it.
Likewise, if you’re someone who looks at my Services page, sees the rates, and thinks “you’ve got to be kidding me…I would NEVER pay someone THAT to plan a vacation for me,” then, sweet: you are not my ideal client. And that’s fine. You’re someone’s ideal client, but that someone might, at this stage in your life, be Expedia.com. Which is perfectly okay. If cost is your number one consideration then, no, it doesn’t make sense for us to work together. I’m not in the business of finding you the cheapest deal possible; I’m also not in the business of frivolously spending your money. I am in the business of providing the best travel experiences possible for your specific needs and wants. And that’s where the service fee comes in.
I want to be as commission-neutral as possible when choosing components for your trip. Would I love for you to stay in super fancy 5* hotels that pay me 15% commission and are really easy to deal with? Absolutely. Am I going to push that on you if I don’t think it’s right for you? Nope.
If you want (sigh) an apartment, we’re probably going to talk about why that might not the best idea in the world, but if you push and we agree that it is actually the best solution for you for this particular trip then, by God, I will find you an apartment, even if it pays very little-to-nothing in commission. If you insist on an Airbnb, I’ll gladly point out some listings that I think would be suitable and remind you for the eleventh time that I don’t like it and if something goes wrong, I can’t help you. But I will do it, if it seems like it’s the best option for you. Most travel advisors won’t. If their business operates on a commission-only model, or they charge a small planning fee, they literally can’t afford to - they’re counting on that hotel commission to keep the lights on.
Here’s what else I’m doing to earn that fee:
I’m definitely going to steer you toward my very favorite small group food tour in Florence rather than set up an expensive private food tour, even though the small group food tour pays no commission and the private one pays 10%.
I’m not just going to take a supplier’s first hotel recommendation - I’m going to do some independent research and find out whether I have some options that I think are better for you and advocate for you on the supplier end of things.
If you’re going to a city, I am myself making a detailed spreadsheet of restaurants I think you should try and plugging them into a custom Google map to ensure they’re proximate to where you’ll be on each day of your trip.
I’m putting a lot of thought and time into planning each and every one of my clients’ trips, and that time is valuable. The time I’m not actively planning travel? I’m having coffee meetings with suppliers, going to conferences to educate myself on destinations and vendors, consuming media about great hotel properties, and traveling myself to gain first-hand knowledge.
Hence, service fee. My time is valuable. Your time is valuable. If what I’m charging for my time is less than what you consider your time worth and the idea of making a custom Google map with different icons for restaurants, bars, and coffee shops doesn’t fill you with joy? Working with a travel advisor should be a no-brainer for you.
Lecture, over. Homework: if you’re convinced that this might be the right option for you, head over to Plan A Trip and let me know what you’d love to experience next.