How Does Enchanting Ireland and Travel Agencies Get Paid?

The first question raised, after clients receive a custom Ireland self-drive price quote, is, "How much do you charge to plan an itinerary?"

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? 

What is the value of a travel agent these days?

EnchantingIreland.com: What is the value of a travel agent these days?

Yes, I was actually asked this by a potential client on the phone the other day and while it got my back up against the wall, I was able to articulate my actual value to my clients and eventually closed the deal. Rather than listing my value I simply gave examples of it, true-life stories of clients whom I helped over the years.

Our Services Are Free

Either the public is truly ignorant in thinking that travel agents charge them above an beyond the cost of travel or we, as an industry have failed to educate consumers that our services are paid for by the supplier (car rental, hotel, tour operator, etc.) I suspect it’s the later of the two because it has always been taboo to discuss these types of things with clients and now it’s come back to bite us right in the rump.

I didn’t realize this until a few clients asked me upfront, “What are you charges for planning this?” I would explain the commission process and even advise the client that that rate is the same if you book directly with my partner as if you do myself, they just keep my commission as their own profit. All tour operators work this way to ensure it’s a level playing field for all agents – we all offer the same prices and discounting is usually against our contracts.

Rack Rates vs Bulk Rates

Years ago I decided to check on a potential client and see if they were ready to book after weeks of emails flying to settle their itinerary. “We decided to book directly with the hotels and car rental to save money as we’re on a budget. Thanks for your help!” I was curious on what properties they settled on and they furnished an itinerary for my review. I quickly worked up a price based on the same exact hotels and emailed her back the quote – a savings of $83 per person, not to mention the car rental which offers discounted insurance! She quickly cancelled her reservations and booked her package with me and the commission I made helped pay for all of the time and effort I put into planning the vacation for them.

(These days I no longer help with itineraries until after the package is purchased due to many clients knowing I do no charge and trying to use my services for free.)

Our pre-negotiated “bulk rates” beat almost every “rack rate” (direct rate) out there and some of the savings is considerable. As recently as last week I had a client looking at a hotel in Lahinch for €85 per person, double occupancy which is about $272 for one night, two people. My hotel consolidator was able to get me the same rate for $238 which was a nice savings for the client.

Planning Knowledge

You cannot beat the value of a knowledgeable agent and if you combine that with the fact that their services are FREE, you have hit the Mother Load!

Talking with clients or corresponding via email I can get a basic idea of what they want to accomplish on their trip to Ireland, their travel style as well as their level of accommodations and turn around a well organized outline of a trip. Each night can be planned or suggested with intimate knowledge of pubs and restaurants in towns I familiar with. This type of service not only makes your trip easier but it allows you to concentrate on other details, like what to see and do.

One of my favorite stories here is planning a trip for a couple that coincided with my own trip – we would both be in Dublin at the same time, me arriving on their last night of vacation. We made loose plans to meet up at a pub and I would buy them a pint and see how their trip went – and run for cover if there were any problems. I left them a note with a map to the Auld Dubliner and gave them a time we’d be there. This time it was so crowded downstairs that we went upstairs and into a quiet corner so we could all talk and my client couldn’t find us. My sister-in-law was outside smoking and they went up to talk to her and all of a sudden my name popped out of their mouth and Mary whisked them inside, up the stairs and into our corner for drinks. From there we caught up on what they saw and how they enjoyed their trip… no running away from me, nothing but smiles because it went off without a hitch. The personal “thank you” meant the world as I usually don’t get to see my clients in person.Post-Trip Help

This is the most agonizing part for me but shows the value of a good travel agent 10-times over.

When a client has had a “hiccup” in their trip whether it’s the wrong car at check-in or a delayed flight, a good agent is your liaison to recover money from a travel insurance policy or a tour operator if warranted.

One recent incident comes to mind whereby a client had the wrong date for the car rental drop-off and asked if they could keep the car one additional day. She contacted me and upon noticing the error was on our end, we immediately told her we would pick up the one day car rental and the agency contacted us for payment details. Unfortunately she also had a problem with kidney stones while in Dublin and could not get on her flight the next day. Her husband called and I gave him detailed instructions on what to do: contact the airline, get a doctor’s note/receipt, contact the hotel for an additional night. Unfortunately when you are actually traveling these things must be handled by you directly since you are there but we’re always a resource … and that doctor’s note? It saved them a $100 change-ticket fee for the airline and they can turn in the receipts for all expenses to their insurance.

Given a Bad Name

Unfortunately I’ve found that many people fear travel agents these days which is attributed to both horror stories from bad agents as well as the marketing of online sites which promise to save you millions.

When it comes right down to it, use your gut instinct when dealing with an agent and don’t look back. The online sites may be great for just airfare but when you want to create a whole vacation, the experience of a good travel agent will be worth much more than the $30 you saved online.