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Why do travel agents get better deals?

Why do travel agents get better deals?

Travel agents specialise in all aspects of travel planning, and with extensive knowledge and connections within the industry, they can often access deals and discounts that aren’t readily available to the general public. So, if you’re looking to book a holiday, a travel agent can save you money, 

Using a travel agent can offer several benefits, especially for more complex trips or for travellers who may not have the time or inclination to handle all the details themselves. 

How do travel agents get discounts?

The relationships that travel agents build with airlines, hotels, car rentals, and cruise lines are crucial for providing the best service to their clients and are a significant aspect of their job.

First and foremost, these relationships give travel agents access to better deals, rates, and packages that aren’t usually available to the public. Airlines, hotels, and cruise lines often reserve special offers and rates for travel agencies due to the volume of business they bring. By having a solid relationship with these service providers, travel agents can provide cost-effective and value-added services to their clients.

When a travel agent has a good relationship with these providers, they have increased leverage in negotiations. Travel agencies represent a considerable volume of bookings for service providers, giving them more negotiating power. This can help when trying to secure special requests, better rates, or even when resolving disputes or problems.

Insider knowledge and expertise are another advantage that comes with these relationships. Travel agents who frequently work with specific travel partners develop an in-depth understanding of their offerings, policies, and procedures. This insider knowledge can significantly benefit holidaymakers, allowing travel agents to provide personalised advice and recommendations.

In addition, when problems arise, as they sometimes do in travel, having a direct line of communication with service providers can make the resolution process smoother and quicker. Instead of the client having to deal with it alone, the travel agent can step in and leverage their relationships to address the issue.

Lastly, these strong relationships facilitate personalised service. If a client has specific needs or requests, such as a particular type of room in a hotel, a dietary requirement on a cruise, or assistance with a flight, travel agents can liaise with their contacts to cater to these needs.

Are exclusive discounts and promotions available through these partnerships? 

Exclusive discounts and promotions are often a key advantage of partnerships in the travel industry. This can be particularly true for travel agents or agencies that have established relationships with airlines, hotels, cruise lines, and other travel service providers.

Airlines, for instance, may offer special fare discounts or flexible booking terms to their partners in the travel industry. Similarly, hotels may offer room upgrades, discounted rates, or complimentary amenities like breakfast or spa services. Cruise lines can also provide benefits like cabin upgrades, onboard credit, or special dining experiences.

Moreover, travel service providers often offer special promotions exclusively through their travel industry partners. These promotions can include discounted package deals, early booking bonuses, or special rates during off-peak times.

These exclusive offers are generally designed to incentivise travellers to book through travel agents or agencies, providing value that they might not be able to find on their own. This is one of the reasons why working with a travel agent or agency can often result in a more cost-effective and enjoyable travel experience.

For example, The Travel Franchise’s customer-facing brand, Not Just Travel, has around 47 key trade partners (KTPs) who work closely to offer added value through a strategic partnership. Sometimes they may offer exclusive discounts on particular travel products, or added value to a booking. 

What are commission-based discounts?

Travel agents typically earn their income through commissions paid by the suppliers of the travel products they sell. This means that when a travel agent books a flight, hotel, cruise, or other service on behalf of a client, the supplier of that service pays the agent a percentage of the sale.

The specifics of how commissions are calculated can vary. Generally, it’s a percentage of the base cost of the service, not including taxes and additional fees. For instance, if a hotel room costs £100 per night before taxes and fees, and the travel agent’s commission rate is 10%, the agent would earn £10 for each night they book.

Travel agents may also receive commissions for additional services or upgrades that their clients purchase. If a client, for example, decides to upgrade to a suite or purchases a special package, the travel agent often receives a commission on these additional charges.

How travel agents use some of the commission to offer discounted prices to clients

Travel agencies frequently choose to pass on these savings to their clients in the form of discounted prices. For example, if a travel agent has a commission agreement of 10% with a hotel, and a room is priced at £200 per night, the agent would earn a £20 commission for each night booked. If the agent decides to give a discount to the client, they might reduce their commission and pass that saving to the client. So, if they decided to take a £10 commission instead of £20, they could offer the room to the client for £190 instead of £200.

This can be a win-win situation. The client gets a discounted price, and while the agent earns a smaller commission, the lower price encourages the client to book, thus securing a sale that might not have happened at the higher price.

Why are travel agents cheaper than airlines?

Negotiated fares are special airfares that travel agencies establish through agreements with airlines. These fares are often lower than published rates and offer the potential for significant savings, especially for frequent and high-volume travel like that done by corporations or large organisations.

The process of negotiating these fares generally involves the travel agency working directly with an airline to establish a specific fare for certain routes. These negotiations often centre on the volume of tickets the travel agency can commit to selling. In exchange for the agency promising to sell a certain number of tickets, the airline agrees to a lower fare for those tickets.

Possessing an International Association of Travel Agents (IATA) card can make negotiating discounts easier. A multitude of airlines recognise the IATA ID card as a valid credential within the travel industry and accordingly offer flight discounts to cardholders. 

Here are some airlines that offer reduced airfare to travel agents bearing an IATA ID card:

  • Air Tahiti Nui
  • Alitalia
  • Allegiant Air
  • British Airways
  • Hawaiian Air
  • Iceland Air

Are there unpublished rates that are not available to the general public?

Travel agents often have access to unpublished rates that aren’t available to the general public. These rates are typically negotiated between travel agents or their parent agencies and travel suppliers, such as hotels, airlines, or rental car companies.

These special rates are based on the idea that travel agents can drive a significant volume of business to these suppliers. In return for the promise of ongoing bookings, suppliers provide travel agents with rates lower than those typically available to individual customers.

Such deals might involve hotel rooms, airline tickets, car rentals, or other travel services. Unpublished rates can vary widely and might be available for different types of services or under different conditions, depending on the specific agreements between the travel agent or agency and the suppliers.

Group bookings can secure lower prices

Group travel bookings can often secure lower prices than individual bookings. This is due to a few key reasons:

  • Economies of scale: When a large number of travel services, such as flight seats, hotel rooms, or tour spots, are booked at once, providers are often willing to offer a discount. This is because it’s more efficient for them to process a large group booking rather than multiple individual ones
  • Guaranteed sales: Group bookings give service providers a guaranteed sale of a large number of tickets or rooms, reducing their risk. This can make them more willing to offer a discount
  • Negotiating power: The potential for high-volume sales can give those organising group travel more negotiating power with service providers, allowing them to secure better deals.

These discounts can apply to various aspects of travel, including airfare, accommodation, ground transportation, and even attractions or excursions. However, it’s also worth noting that group travel may come with some restrictions or less flexibility compared to individual travel, and the specifics of any discounts can vary widely depending on the provider and the specifics of the group booking.

Familiarisation trips and insider knowledge

Familiarisation trips, often referred to as “fam trips,” are indeed an important tool for travel agents. These trips are organised by tourism boards, hotels, airline companies, and other travel industry suppliers with the aim of acquainting travel agents with their destinations or services.

During a fam trip, travel agents can experience the various activities that a typical tourist would, such as touring local attractions, dining at local restaurants, or staying at hotels in the area. They might also learn about less visible aspects of the travel experience, such as the process of checking into a hotel, the quality of customer service, or the convenience of transport options.

The knowledge and experience gained from these trips allow travel agents to provide firsthand advice and recommendations to their clients. They can speak authentically about what to expect, provide insider tips, and help clients make decisions that will lead to better travel experiences.

Fam trips can also help travel agents build relationships with local suppliers. These relationships can be beneficial when it comes to making bookings, securing upgrades for rooms or resolving issues for clients in the future.

Exclusive discounted or complimentary experiences are offered during fam trips

Fam trips often include exclusive discounted or complimentary experiences.The nature of these experiences can vary widely, but they often include the following:

  • Accommodation: Travel agents are typically provided with discounted or even free accommodation so they can experience the amenities and services firsthand
  • Tours and excursions: Fan trips often include discounted or complimentary tours to popular local attractions or unique local experiences. This could range from city tours, historical sites, to adventurous activities like scuba diving or hiking, depending on the destination
  • Dining experiences: Agents might be offered complimentary meals at local dining establishments, including high-end restaurants or popular local eateries. This allows them to personally recommend these places to their clients
  • Exclusive access: Travel agents are sometimes given exclusive access to attractions, events, or experiences that may not be typically available to the general public. This could include behind-the-scenes tours, private viewings, or meetings with local dignitaries or tourism officials
  • Travel perks: Depending on the host organisation, travel agents may also enjoy additional travel perks, such as discounted airfare or airport transfers.

The factors affecting discount availability

The range and extent of discounts available to travel agents can differ based on factors, such as their affiliation and professional experience.

A travel agent who is part of a large agency or network may have access to more substantial discounts because of the volume of business they can drive toward suppliers. An agent operating independently may not have the same access to high discounts. This is why many people who want to become travel agents join franchises like The Travel Franchise to operate under its customer-facing Not Just Travel brand – the purchasing power gives them access to large discounts and special offers.

Experience also plays a significant role. Seasoned agents, through years in the industry, often develop strong relationships with suppliers and may be given preferential rates as a result. Their experience also equips them with an in-depth understanding of strategies to maximise discounts and benefits for their clients.

Agents who specialise in certain areas or types of travel might be able to secure larger discounts within their specific niche due to the higher volume of business they can deliver to suppliers in those areas.

Performance is another critical factor. Suppliers often reward high-performing agents who regularly bring substantial business to them with better rates, nurturing these profitable relationships.

The impact of online booking platforms on the availability of exclusive deals

The rise of online booking platforms has significantly reshaped the travel industry landscape and has also influenced the availability of exclusive deals.

Online platforms, with their extensive reach and efficient comparison tools, have made it easier for consumers to find and compare deals from a wide array of suppliers in real time. This democratisation of travel information has brought a greater level of price transparency to the market, encouraging competition and potentially leading to more attractive deals for consumers.

However, despite the prevalence of online platforms, travel agents still maintain a certain level of access to exclusive deals not available to the public, especially those tied to their professional affiliations or high-volume sales. Furthermore, agents often have the expertise to navigate complex booking systems, access unpublished rates, and leverage professional relationships, which can lead to exclusive deals and savings for their clients.

Final thoughts: The value of travel agents in securing optimal deals

In conclusion, the landscape of travel booking has evolved considerably with the advent of online platforms, yet the role of travel agents remains relevant and beneficial. Travel agents, through their affiliations, experience, and professional networks, can access deals and discounts that may not be readily available to the general public. They have the ability to navigate complex booking systems, access unpublished rates, and utilise established relationships to secure exclusive deals for their clients.

Beyond the potential for cost savings, working with a travel agent brings the advantage of personalised advice and assistance. They can provide expert recommendations, cater to specific needs and preferences, and offer support throughout the journey, which greatly enhances the overall travel experience.

In this ever-evolving travel landscape, consulting an experienced travel agent can lead to the best travel deals, creating memorable experiences without exceeding your budget.

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