Just finished this and realized that one of my most loyal readers will say I am being verbose and on this subject, I plead guilty. I’m just trying to understand this one thing that frustrates me no end—always has.
I need to write about something I have never understood. People asking or worse, expecting, travel agents to give them money or something else of value for booking their travel for them. Travel agents already work for clients for free.
This last week I received an e-mail from a very nice person asking me about a cruise. She had waited until the last minute (a Viking Ocean cruise this summer—these are usually sold out a year in advance) and wanted me to see if I could find her a stateroom—that maybe there was a cancellation. She did give me the exact date of the cruise and exactly the kind of stateroom she wanted, which I appreciated.
I called Viking and spent about an hour on the phone with them while the excellent customer service rep tried to find me the exact stateroom she was looking for on a sold-out ship. He was able to find a stateroom in the same category she wanted but before he could grab it, another of their customer service reps grabbed it for a client who had money in hand. Boo! We almost had it. But my agent did promise to check that cruise on a regular basis between now and when it sailed in July and let me know if there were any cancellations. The last date for people to cancel with a full refund was approaching and often if staterooms are going to open up, that’s when they will do it.
I got back to the client and told her everything that had happened and that we would continue looking. She was very appreciative and I told her that I would contact her if anything came open. In the meantime she promised to send me all her passenger info so I could be ready to book it if they called, so we didn’t lose it again. Sounded good to me.
But the next morning there was an e-mail from her asking me, “Jim, to clarify/confirm: You do offer the Viking-allowed OBC, correct?” I wasn’t sure what she meant by that so I asked her to clarify. She got back to me with this: “Viking is strict with its agents, as I’m sure you know, limiting how much “rebate” they are allowed to give to their clients. The most above-board thing that agents tend to do is give OBC up to the limit Viking allows – which varies by voyage. Some agents also do provide additional $$ in the form of cash rebates, but that is not technically allowed under Viking’s policy, and the agents who do it are (obviously) paying it out of their own proceeds. So, I never expect or ask for any cash rebate, since it’s technically against Viking’s policy. I’m content to stick with the maximum OBC per voyage (it’s based on length of voyage.)”
Well I had heard about Viking’s OBC rules but I had never looked into this policy because I don’t believe in giving clients cash or on-board credit back. In the travel industry, this is a standard practice that I have never understood. Some of my best friends go looking for it and that saddens me as well.
At our agency, we make 38% of the 15% commission that pretty much every cruise line pays. The other 62% of the 15% the cruise line pays goes to our franchise owner for him to run the business. That means on every $1000 dollars of travel I handle, I get $57. So if you buy a $10K cruise I get $570.
That would be great but most cruises we sell are around $3-4000. And the cruise lines have this nice little thing called NCF (non-commisionable funds) which are parts of the cost of the cruise that we don’t make commission on. We also don’t get commission on taxes and port fees which can be a significant cost as well. (Last year I had a $1500 cruise that had almost $1000 of NCF and port fees on it). I think I made $30 on that one. Took me a bunch of time because the client was a first time cruiser. On those, I might make $100 if I am lucky (after expenses). Any OBC you get from us that is not directly from Viking (or any other cruise line) comes out of my pocket. If I give every client back even $100 OBC, I end up averaging less than $100 per cruise booked. Since from initial contact to the client returning from their trip, I spend about 20-30 hours working for that client, that means I make $4 to $5 an hour.
So why do I do this? Because I love travel, I love cruising, I love helping people plan travel and in general I like doing all of that really well. And luckily for my bride and I we have enough money coming in to let us do that. (I have another business that helps).
Before we started doing this, we used a travel agent (who is still a close friend) for more than 20 years and I never once asked her for anything off on a cruise or any OBC. She would always send a bottle of wine, a fruit plate or some flowers to our stateroom, she would give us cool Disney stuff to give to our grandkids and once passed on an Azamara bathrobe, but I never expected anything from her other than the superb service and knowledge she brought to our traveling. I knew that any OBC came right out of her pocket and that she did great work for us. She took care of us.
There are lots of online agencies that will give you almost half their commission back. I know of one that on a Viking cruise they will normally give $1000 OBC if you book a suite. But those agents are employees making close to minimum wage. Most have never taken a cruise let alone traveled outside the country. If they research a cruise for you, they are getting paid whether you buy it or not. If you get into trouble while traveling, good luck trying to get a hold of a particular agent for changes or problems. You just get to explain your entire problem again. And if you are on your trip, can you call that agent on their cell phone for help? I doubt it. My clients can…and I could call my old agent.
I do have a question for all of you as you look for a TA that will give you OBC. When you go to a doctor, dentist, lawyer, etc. in order to avail yourself of their expertise, do you ask them for a rebate? If you sell something or provide a service, or when you do whatever it is that you do for one of your customers or clients, do they ask you to give them money back? I wish I had thought of this when my I had my rotator cuff surgery a few years back. I should have asked my surgeon for some of the $20K that surgery was worth. (That sounds pretty ridiculous, right?) Why do people do this with travel agents. I just don’t understand.
My clients use my services because we have travelled extensively and I can make recommendations on cruises, staterooms, tours, restaurants and hotels. Your primary goal of using an agent should be the same reason I did for 20+ years of traveling. Because when things go wrong, she was there. When things went bad with a flight at Heathrow and she found us seats home or when we wanted to book a “cheap cruise” on a cruise line I now never recommend, she told us that we wouldn’t like the cruise line we had chosen (we went anyway) and she was right—we hated it but she never said “I told you so.” I do the same thing for my clients.
Lastly, I love doing things for my clients but I want the things I do to be more than “money they are expecting.” I like sending clients wine or getting them a dinner at a speciality restaurant. But I do that as a special gift so they will enjoy the cruise even more. I truly believe when you don’t expect something, you like it even more.
So if you can explain to me why this goes on, please do.
If you accept the expectations of others, especially negative ones, then you never will change the outcome. —Michael Jordan