Nothing!
"Well how do you make money?" is typically the very awkward follow-up question, awkward for potential clients but not awkward at all for us to discuss. You walk into any business and buy a product or contract for a service and you know that there is a certain profit built in. Some products have large profit margins while others are quite small. We are a business and we need to make money so it's a fair question. What are you paying extra for us to stay in business and help you?
All travel agencies are paid a commission which is built into the cost of everything from Irish B&Bs, hotels to castle rentals and cars. That commission ranges from 5-10% on average with specials running on certain properties that may increase the commission or offer bonuses.
The cost of each piece of your vacation itinerary contains a few more costs than you are aware. Many accommodations include fees to a 3rd party including booking engines, GDS (global distribution system) or websites that offer reservations. These fees are built into the cost of all hotels rooms to allow agents and clients to book the same room through many different means.
If you book your travel through a tour operator then you'll have another layer of commission which will typically add another 10% or more to the cost of your trip. Tour operators offer packages through their company which you can book direct or your can purchase through a travel agency ... and they have to pay the travel agency a commission.
If I Book My Travel Direct, Will I Save Money?
Throughout the years we've helped hundreds of people plan their trips to Ireland, spending countless hours via email and phone to go over routes, accommodations, sites and more. In the beginning we would find that clients would trail off toward the end without notice and when we checked back in to book their trip... we'd get an email, "Something came up and we're not going" or "We booked it ourselves." Mind you, we didn't charge which means we didn't get paid -- and we almost went out of business because who can sustain that business model?We had regrouped, had meetings and came up with the idea about explaining the Travel Supply Chain upfront to folks to ensure they knew how we got paid. Part of that discussion was to let people know that the Travel Supply Chain benefits everyone but the travel agent and the client.
All fees built in ensure the the client (you) pays one rate for a hotel room or car rental so when a travel agent quotes the rate, it is the same if you try to book it directly. We book direct with our suppliers, bypassing the technology and costs associated with them yet the rate is the same. The supplier keeps those costs as profits. Book that same Irish hotel or car rental and they keep our commission as profit as well.
When to Use Tour Operators
We used to partner with a very well-known Ireland tour operator for all of our Ireland Self Drive Vacation Packages. They offered a very nice booking engine which helped us create customized packages for our clients with one form of payment. We did this for years and everyone seemed very happy, ourselves included because we felt the services and costs were competitive.Over time we started losing clients due to price and that is when we started to compare our packages with this tour operator based on what we could offer by booking direct. This is when we found out the tour operator's price was slightly more than what we could offer with direct bookings ... because the tour operator was building in a commission to pay travel agencies. In the long run it did cost more to book through us because we had a layer of commission being added on to every package.
We promptly re-examined our business, decided to work direct with our suppliers and save our clients the 10% the tour operator was padding to pay us. Again, you could book the same package direct with the tour operator and it was the same price we charged... but they would keep that extra 10% for their own profit.
So, when do we work with Tour Operators? When they offer bus tours or distinct packages which we cannot offer ourselves. There are some tour operators which have fantastic contracted rates with hotels and we know to book with them to save money because their bulk buying power outweighs the commissions built in. Sometimes you can only book with a Tour Operator but in the case of Ireland where the Irish Self-Drive Vacation is completely customized... we do better by booking direct!
$100 Ireland Itinerary Deposit
When we found that clients were booking direct to save money -- and we almost went out of business -- we decided to implement a $100 Ireland Itinerary Deposit. When we explained the Travel Supply Chain, how we got paid and that booking direct doesn't save money ... the $100 deposit was welcomed and fair. The deposit was applied toward the final cost of the trip.This ensured that the time we spent creating itineraries with potential clients would result in a booking and thus a profit for our company.
While researching our competition we found that many agencies were charging fees from $50 - $200 to plan itineraries which was in addition to the commissions received from booking the vacation. We are refraining from doing that because we really enjoy what we do and don't consider it work...
Save Credit Card Charges - 3%
There is one way to save on your vacation and this is typically only available from small- to medium travel agencies... pay by check and save the 3% credit card fee!Everyone in the Travel Supply Chain builds in 3% which is the typical credit card fee paid to the credit card company for accepting their card(s). We offer our clients that discount if they pay by check ... after all we're paying our suppliers by cash so why not take that discount and offer it back to clients?
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