Travel Agents – Are You Being Ripped Off?
Right up there with real estate agents and used car sales people, travel agents are subject to much suspicion when it comes to sales tactics and prices. But are you really being Vacation Trip sized up and ripped off every time you walk into an agency or book a holiday?
The answer is yes, you will be sized up and yes, given half the chance many agents will overcharge, some by as much as they can get away with.
With the great resources available on the net most travellers will not walk into an agency until they feel they have a good handle on their destination and current prices. Yet no matter how savvy you are it’s still worth knowing how agents work before you decide to use one.
There are two aspects to the way agents work in Australia that affect the service you are given. The first is the way agents are paid. Second is the pushing of particular agency ‘preferred’ products like tours (with high commission levels) onto the customer without disclosing this conflict of interest.
No real newsflash here: agents are paid on commission. But people might not realise that base pay rates are so low, agents need every dollar they can squeeze out of you. The pay structure generally works like this:
* The agent is paid a base amount, which is a paltry sum at best. The base amount is fairly consistent amongst the major agencies, and will go up slightly the longer the agent stays in the job.
* Extra income is based on commission paid against the revenue agents bring in. Different levels of revenue are made from every product they sell, from very little (say a hotel transfer) to up to 50% revenue for travel insurance. ‘Preferred products’ such as tours or flights will have higher levels of revenue.
* Of this total revenue, agents are paid a monthly percentage, usually on a sliding scale (the more the agents bring in the higher the percentage they get). This pay scale will depend on the agency and some are more generous than others. Without this commission the base amount is barely enough to live on (we are talking burger flipping rates).
* There is massive pressure on agents to hit monthly revenue targets (aside from actually making a living), and thus the job has a very high turnover rate (1-2 years is a fair stint as a travel agent or even store manager).
* But what about the perks? Agents fly all the time right? In short there is no particula