Travel agencies take a commission on the flights, hotels, cruises, tours and insurance products they sell to their clients.
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The tough return to travel this year has many travelers turning to experts.
There are many benefits to using a travel agency. In addition to getting your vacation back on track when things go wrong, they can often get you a better deal than you could find on your own.
But if you’ve taken the DIY approach before, you might have some questions about using a professional. Probably most importantly, how much does it cost?
Annoyingly, this is complicated.
“It’s hard to put a number on for a number of reasons,” said Greg Hamilton, president of the Association of Travel Agents New Zealand (TAANZ).
C word
One reason for this is recent changes in the travel industry – major airlines have decided to cut commission rates.
Commissions have traditionally been one of the main ways travel agencies make money. Basically, they take a cut of the flights, hotels, cruises, tours, and insurance products they sell to their customers.
This year, Air New Zealand and Qantas cut commission rates from 5 per cent to 1 per cent on long-haul flights and from 3 per cent to zero on trans-Tasman flights and short-haul flights to the Pacific Islands.
Many travel agencies have had to make up the difference by charging clients a service fee.
“The reality is that they pass the cost and value of the service on to the customer,” Hamilton said.
However, if the travel they arrange includes other elements that still have a commission — such as a cruise or tour — the fee may not be charged.
Rosann Connolly-George, co-director of Vincent George Travel in Dunedin, said she took this into account.
“If I have a big order, I handle everything and I don’t put any fees on it because I know I’m going to get a fair commission.”
service charge
The amount of service charge you can pay varies by travel agency and tour.
Celeste Ryall, director of customer engagement at House of Travel, said while they don’t usually charge a booking service fee, the exact cost is determined by each store.
Heidi Walker, general manager of leisure at Flight Center NZ, said there was a sliding scale based on the level of service required for the trip, which was outlined to clients during the initial enquiry.
“For example, a long-distance trip from New Zealand to Europe requires a different approach to visiting friends than a domestic trip,” she said.
“Our allocated costs reflect a change between $50 and $150 per person.”
The fee covers end-to-end travel care, including 24/7 support, advice on required documentation and a dedicated travel specialist to manage their trip and any changes.
get a quote
What if you’re just looking to a travel agent to find out how much a trip will cost? Do you have to pay for quotes?
Again, it depends on the institution.
Connolly-George said that while she knows some agencies charge a quote fee, hers is not one of them. They’d rather help someone who knows they have a good chance of coming back in the future.
“If I walk into a retail store and I’m not sure about the shoes, I don’t expect to pay for them until I come back to pick them up.”
Flight Center also does not charge a separate quote fee.
House of Travel’s Ryall says that if a client needs a quote for a bespoke itinerary – which can take a lot of research to put together – some of their outlets may ask for a non-refundable administration fee to cover their time and expertise.
“However, if a customer has booked a trip, this amount will usually be deducted from the final price the customer pays for the holiday.”
cancellation fee
If you need to cancel travel booked through a travel agent, you may have to pay them a cancellation fee in addition to any fees charged by the airline or accommodation.
Flight Center’s Walker said their cancellation and change fees were also itinerary-related and scaled up.
“Depending on the itinerary, cancellation fees range from $50 to $350, and we do have a cap if the cancellation involves multiple people.”
House of Travel’s Ryall said they had outlined in their terms and conditions what would happen if they canceled so there were “no surprises”.
Any refunds under these provisions may be less commission or any additional earnings associated with the booking.
They also charge an amendment fee of $30 per passenger for domestic travel, $50 per passenger for trans-Tasman and South Pacific travel, and $150 per passenger for international flights.
the bottom line
If you use a travel agent to arrange your trip, make sure you are aware of any additional costs incurred by using their services.
But you shouldn’t let the cost put you off either. The costs are likely to be minimal relative to the amount of money you’re spending on your trip — and may end up saving you money in the long run.
See also: It’s not hard: 6 things that often go wrong with hotel rooms
See also: Annoying trends on planes are worse than seat reclining. I feel guilty about it.
