Last updated February 1, 2023
Ok, you're ready to start charging planning fees for your services. Amazing! It's time to eliminate those tire kickers and time wasters, and only work with the clients who value your time and expertise.
Now it's time to figure out how much to charge. I've seen various numbers recommended, most often $147 or $247.
But what if, instead of a flat fee that remains the same whether you're booking a budget cruise line or a high-end luxury FIT, you set up your fee structure based on the complexity of each trip?
The idea is that the more complicated the trip is, the more you should make in exchange for your time and expertise.
But figuring out how to calculate your travel agency fee can be hard. That's why I'm providing you with my service fee calculator that I use on every trip I plan.
It's based in Google Sheets, but if you prefer Excel you can export it and use it there.
How to use the calculator
The Google Sheet template is already formatted to be simple, all you need to do is insert the trip elements your agency normally books.
When you're on a consultation call, check the boxes for the appropriate trip elements, and it will automatically calculate to total travel agency fee in the highlighted “Total" cell.
Yes, it's that simple!
Feel free to change the dollar amounts or descriptions, but be careful editing the checkboxes or totals. And if you run into trouble, reach out and let me know.
How the calculator helps you close sales
When you're on a call, take a minute at the end to recap what they've told you so far.
Then say one simple thing:
“My travel planning fee is determined by the complexity of each trip, so give me just a moment to plug in the information we've discussed”
Then double-check the information you've entered, and tell them the fee.
Because you've customized it, and you've let them know you're customizing it, it reflects exactly the trip they've outlined. Investing that time helps them feel valued, and reflects on the level of customization you provide for the trip itself.
This is how I close over 90% of my travel agency consultation calls with a sale.
Want to try it yourself? Download the calculator.
Why travel agencies should charge fees
You've probably heard from at least one travel agent, “I get a travel agent commission, I don't need to charge planning fees.”
But let's face it, we're not travel agents anymore. Travelers, especially if your travel business focuses on luxury travel, want a travel advisor, not an agent.
Do you have a small tour operator or guide who does't pay travel agent commissions, but you know would be perfect for your client? Charging a travel agency planning fee means you can still use that travel supplier, even though you won't receive a commission from that travel booking.
And let's not forget about airline tickets. Does your travel agency charge a fee for an airline ticket? Most likely you do, because the days of higher commissions on airline tickets are long gone.
Is charging an additional fee for the time it takes you to research and make an informed decision about the best travel arrangements for your client really any different? My opinion is that it isn't.
You're an independent agent or travel advisor, and more than that, you're a travel professional. You're providing a service, and just like any other service professional, you deserve to be compensated for your time and expertise.
Why charging a low travel agent fee doesn't work
It may seem like a low fee is the place to start, especially if you're just starting out. I've seen a lot of recommendations to start around $30.
But what seems to make sense on paper can actually backfire in a big way.
People know that price usually reflects value.
If a hotel called themselves luxury but charged the same rate as a low-end brand, wouldn't you be a bit suspicious about their idea of “luxury”?
When someone is planning a 5 or 6-figure family vacation, you need to charge a fee that tells them they're in good hands. Plus, a higher fee helps eliminate the low budget trips that waste your time.
To a luxury traveler, a $30 fee says that there isn't any value in your services. They don't want $30 level of service, they want at least a $300 level of service. So by setting your fees too low you're actually repelling the clients you want to attract.
The right fee can also weed out the clients you don't want, which is a good thing! After all, a $500 fee on a $10k trip is perfectly reasonable. A $500 fee on a $2k trip isn't.
So those clients who want you to compete with the big OTAs and are only interested in price will automatically self-select out. They'll go waste the time of an agent who doesn't charge a fee.
The bottom line
It's time to treat your travel business as just that. A business.
This isn't a hobby, and you deserve to make a living doing the thing you do well. Are you ready?
Required disclaimer: I can't make any guarantee that your results using this calculator will be the same as mine. There are a lot of variables that go into sales, and your results may be different. You also need to discuss charging fees with your attorney, accountant and insurance provider as well as with your host agency if you have one.