Should you book your trip through a travel agent?

By Steve `Grumpy' Collins, on August 31st, 2010

These days when people are planning a trip they do much of their research on the internet and many people are booking direct online.

I’ve been booking most of my travel online for quite some time now, which poses the question should we still book travel through a travel agent?

I’ve worked in the travel industry for many years, in both the retail side (directly booking travel for clients), in wholesale (putting the packages together that travel agents sell to clients) and also in travel marketing (promoting various destinations and services, but not actually selling travel), and I’ve been a customer, so I have a perspective from all sides.

Just a few years ago your only option was to buy your trip through either a travel agent or an airline; you didn’t really have much choice, so the situation is better now that there is more competition. And competition is still a problem when purchasing travel through a travel agency. The reason being that the vast majority of agencies have special deals with particular wholesalers, so will favour selling those products.

Here’s a rough guide to how the commercial travel system works:

As a wholesaler I want to put together several travel products to sell through retail travel agencies. First of all, I need to get the basics: air, hotel and transfer components at a reasonable cost, so that I can make a profit, and the retailer can sell them at a competitive price.

First of all, I negotiate a price with the airline, this is called a NETT price, and it is what I have to pay the airline each time one of my packages is sold in order to guarantee the seat. The thing about airlines is that there are many different fare types, and each of these fare types is given a code and a particular class with which to distinguish that fare upon booking. For instance, a common fare for travel packages has particular regulations attached to it. Typically a package fare can only be used for a stay with a minimum of 3 days and a maximum of 21 to a particular destination, and as part of that fare accommodation (and sometimes transfers or tours) must be sold with it for the whole of the stay. This ensures that the fare is being sold to a genuine holiday maker, and not just someone who is looking for a very cheap fare. The fare is given a class designation – say F Class, for example. This means that when an airline is looking at its bookings for a particular flight it can see that if has 20 F Class fares on the flight, meaning that the flight has 20 people on package tours to that destination.

Now that I have my fare, as a wholesaler I need to negotiate competitive room rates with the hotels in the destination I am promoting. Because I want to give clients a choice, I negotiate rates with a variety of hotels of all standards. If I give a particular hotel enough business throughout the year, they will give me a guarantee that a particular number of rooms will, at all times, be available for me. That’s a good thing because it means that if I have a guarantee of, say, two rooms at a particular hotel, as soon as I get a booking through an agent, if those rooms aren’t already occupied by my clients, I can confirm them straight away. That helps the agent, because if I can guarantee their client a room immediately, then the client will probably go ahead with the booking.

Even if my two rooms have been sold, I can still get more rooms with that hotel if they are available – in fact, the more rooms that I book, the more guarantees I am likely to get in the future.

You may be thinking, well how come a wholesaler can get a room cheaper than me, aren’t all rooms the same price? The answer is an emphatic NO! As a wholesaler, I’m buying in bulk, so my price is cheaper than for someone who just wants one room for a night or so. Also, the hotel’s cost per sale is cheaper when dealing with the wholesaler – I’m booking in bulk, paying in bulk, guaranteeing a certain level of sales throughout the year, but most of all, I’m doing the hotel’s marketing for them by advertising them in my brochures. The same is true for online reservations sites; they’re buying in bulk and marketing the hotels too.

Now that I have my airfare and hotels I need a land component, which is transfers from airport to hotel and vice versa, and tours. Most people who buy package tours like to have transfers included, and it certainly makes sense if it’s a destination they’ve never been to before as transfers take the worry out of arriving at a new destination where you don’t know the language and you don’t know where to go.

Since the wholesaler has the basic components in place, it’s time to put together a brochure to be distributed to all the travel agencies (and this is a very expensive exercise – think how much that glossy brochure must have cost to produce next time you throw it in the bin).

In order to have an agent choose my product from the dozens of other similar products they are offered, I need to give them an incentive, which is a higher commission rate. Yes, when you buy a package, the travel agent is actually being paid by the wholesaler – not by you. You may give them the money, but they don’t see much of it, just whatever their commission is.

It is at this stage that I can finally begin to answer the question – should you book your trip through a travel agent?

Although the travel agent is the one that you talk to about your trip, and even no matter how helpful they are, the agent is actually working for the wholesaler, that’s who generates their wage. Naturally, given the choice, I’m going to sell you the products for which I make the greatest commission. In other words, the travel agent isn’t necessarily selling you the trip that you want; they are selling you the product that they want to sell. I’m not suggestion for one minute that your travel agent is less than helpful, or doesn’t want you to have a satisfactory trip. They do want you to have a good time because they want to keep their reputation, and they want the repeat business.

The point is, that travel agents really only sell a few products – they may sell plenty of destinations, but only through a few wholesalers or suppliers who offer them the best commission deals. This doesn’t mean that you are being ripped off, travel is a very competitive industry, and its products are price driven.

So next time you go to a travel agent for advice, seek real advice. Question them; ask if they’ve visited the destination they’re selling, if they’ve stayed at the hotel they recommend, or, if they’ve had feedback from other clients who have stayed there. Too many people when booking trips focus almost solely on the price, price is important, but also focus on the facts, because, in the end, if you’ve saved a few dollars, but it’s not really the holiday that you want, then you’ve wasted both time and money, and that really puts a dampener on a long needed break.

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Originally posted 2010-06-25 10:28:26. Republished by Blog Post Promoter