When the very survival of travel agencies in New Zealand, post the COVID-19 pandemic, depended on being able to adapt, they took action. And in doing that, the vast majority moved to fee-based models, so much so that today 95% of New Zealand travel consultants charge professional fees and regard themselves as sellers of travel services rather than agents buying on behalf of clients.
So said Andrew Bowman, Director of The Travel Agents Association of New Zealand (TAANZ) and Treasurer of the World Travel Agents Associations Alliance (WTAAA).
A South African travel agent posted a comment on Travelinfo’s Facebook platform, Open Jaw, pointing agents to Bowman’s blog post about professional fees. Bowman said South African agents were lagging in charging fees.
He said agents’ commissions in New Zealand were dramatically reduced or eliminated in January 2022, speeding up the need for the implementation of professional fees.
“The timing coincided with COVID-19, which had demonstrated just how valuable travel advisers could be, especially when it came to helping customers recover funds or navigate cancellations during border closures. Clients saw firsthand the benefit of having a trusted adviser on their side.”
He said there were strong parallels between South Africa and New Zealand in terms of market size and business structure, making it easy for South African agents to draw lessons from New Zealand.
Agents’ value
He said when agents in New Zealand started to implement professional fees, there was pushback in a competitive market.
“What I would encourage all South African travel advisers to do is stop and take time to deeply reflect on your current position and understand what your value is.”
Bowman encourages agents to develop an elevator pitch. “In thirty seconds or less, tell me exactly what you do and what your value is. It's not just drawing up a list of fees and putting it on a menu. It's deeply understanding what you're doing and why you're doing it.
“It’s often our own hesitation as an industry that gets in the way of confidently communicating value. We've got this entrenched thinking – and it's our own fault – where we feel it's not appropriate to charge for our services.”
Pushback
A factor holding South African agents back from implementing professional fees could be a fear of customer pushback. Bowman believes that if agents make their value clear, there should be no fear of this.
He said customers in New Zealand know they’re paying not just for bookings but for comprehensive trip management before, during and after travel, including support if anything goes wrong.
He said what this really required was adopting a travel retailer mindset. “It's an evolution; the natural next progression. This means moving from being a buyer of travel services on behalf of your customer to being a seller of travel services. You're an entrepreneur, not just an order-taker. It's not transaction-based: you're a professional with skills.”
Bowman said there wasn’t one set model, as the model depended on each business. It might be a deposit payable which was then offset against the total cost when the client booked.
He said in New Zealand some agencies bundled trip management fees, covering everything in the trip from start to finish, while others itemised charges, including an advisory fee.
“The common thread is transparency upfront about what is included so clients know exactly what they are paying for.”
Bowman advised South African agents to take the time to understand their value. He said agents should think about their strengths and identify their weaknesses, then create a plan to turn those weaknesses into strengths.
“Put a price on what you offer and develop your value proposition. Work out why you're worth it and develop that elevator pitch.”
Bowman stressed the importance of adopting a travel retailer mindset. “Move from a buyer to a seller mentality.”
