The industry weighs in

TNW asked industry
heads to weigh in on the
subject of professional
service fees.
Rod Rutter, coo of the XL
Group, agreed that agents
should take all expenses
into account when
establishing a service fee.
Rod suggested agents first
earn the revenue stream
they wish to establish,
then work on a service
fee that will enable this to
happen. Management and
auxiliary fees should also
be considered during this
process, Rod added.
 “Travel agents are
professional people, just
like doctors and lawyers,
and should therefore charge
accordingly for the time
spent serving a particular
client,” said Allan Lunz, md
of BidTravel.
He warns against relying
too heavily on supplier
revenue when calculating
service fees. “When
the supplier revenue
dries up and you’re not
charging adequate fees,
it means you don’t have a
sustainable business model
and you probably won’t be
in business much longer,”
he said.
Once an agent
understands how much time
goes into completing one
transaction, and this figure
is compared against the
various costs of the agency
coupled with the intended
revenue return of the agent,
a fair professional fee can
be established. But, as
Allan pointed out, many
agents are opting against a
service fee because of the
competitive nature of the
industry. This is a problem
that needs to be rooted out,
he said.
Garth Wolff, ceo of
eTravel, agreed: “travel
agents must charge a
service fee, and it should
rise with the level of service
being offered.
“Agents offering a superior
service should charge a
higher fee. “For example,
an ITC with 50 years’
experience and unbelievable
service in a particular area
has much more to offer a
client and therefore is in a
position to charge an extra
fee because they can go
the extra mile,” he said.
“Ultimately, however, the
service fee should not be
compromised.”