Why use a Travel Agent

[newmexicoNita]

But wasn't the reason that airlines stopped paying commissions was that they were in trouble in the first place? Wasn't it a reaction to try and cut cost to stave off bankruptcy? (like that worked! :rolleyes:) Notice that once again we come back to Southwest, profitable for years with their model of no middleman.

 

The cruise industry is a healthy industry in general. I wouldn't actually think they would do something like this in the near term. Well, maybe a one line company. If CCL did this model to say Carnival, they run the risk of the TA's not selling Princess, HAL etc. in retaliation.

 

Isn't NCL different than the others? I notice that some sites don't sell NCL.

No, that wasn't the reason totally, the airlines were in pretty good shape (most of them) when the commissiions were cut about 8 years ago or when they started cutting. sure it was to save money, why else? As for SoWest, let's just say, they are not in as good a shape now as they were 5 or 10 years ago. That is why they are offering about 25% of their work force early outs, to cut costs.

 

NCL different? I don't know what you mean? About the only large company that doesn't always see NCL (and some do) is AAA. Reason, NCL will not advertise with them. This has been going on for years, off and on.

Nita

[jff50]

Even in simple bookings we do the research, sometimes hours, sometimes a few minutes, and on occassion. we have clients that tell us exactly what they want, but we do work for our commissions and you pay nothing for our time.

 

Go ahead, do it yourself, you probably would be the type of client that would know or think you know more than us anyway.

 

Nita

Never said that travel agents don't work for their commissions. But it is incorrect to say that we pay nothing for your time. The people that foot the bill for commissions are the consumers, and we don't have a choice. Personally, I don't like the idea of being forced to pay for something that I don't value. Some customers may like that. And we know where travel agents stand--they have no objection at all to the customer paying them even when the customer sees no value added.

[jcanino]

I'm very glad that your services help your clients. All I'm doing is pointing out that in today's world it is not usually needed. Most of the same info that you can provide everyone already has access to. All it takes is a little research. And that research will more than likely bring a lower price for the same product.

 

No different that buying a car. Another profession that works on commission. If one dealer had the car I want for $1000 more than the dealer down the street...well, that's an easy choice for me.

 

I have access to information and pricing that you nor any other consumer ever see. I have phone numbers of various industry executives that will take my call personally if my clients have a problem. You just cannot compare your internet research to what a travel agent does.

 

Your car analogy is still not comparing apples to apples. You may be able to buy your at a lower price but if you don't like that dealer's service department, you can go to any other dealer to service your car. You cannot do that with travel.

[jcanino]

What I have said throughout is that I am now paying travel agents more than I think they are worth to me. But I don't have a choice. As I've stated before, I'd like to see all cruise lines eliminate commissions, and reduce fares. If all the cruise lines eliminated commissions, competition would drive fares down. Travel agents would then have to compete on a fee basis, providing services that the consumer values enough to knowingly and voluntarily pay for. Right now we are paying for them whether we value it or not. Those travel agents that are efficient at providing services that the customer values should do fine. Those travel agents that can't--well.

If all consumers consider your services to be worth your compensation (currently commissions), you shouldn't lose any business or income. You might gain some from other travel agents.

 

You are not paying travel agents anything. If cruise lines eliminated commissions and made a move to have people book directly (why would you book with a travel agent who is now charging more than the cruise line), you would see an increase in cruise fares so the lines could pay for all the extra people's salaries, insurance and other benefits. They would also have to build or rent more space to house all the extra employees. It would not be a cost saving proposition for you.

[jcanino]

No different than a cruise line not wanting to undercut the TA's. What happens is that when a cruise line charges (all for example, nothing specific here) at their web site $799 for a cruise a TA can widely discount that fare. One might charge $750, one might charge $699 etc. The commission is built into the fare as set by the cruise line. So the cruise line may actually have a price of $649 for the fare and $150 is built in as commission. The cruise lines don't lower the fare if you book direct, they just pocket that difference. So in theory if you got rid of the commissions that $799 fare at the cruise line web site would be $650...using these numbers as examples only...not gospel for percentages. Any TA's want to tell us the actual percentages?

 

Joe, care to provide those?

 

If you're looking for a travel company who uses the no outside booking model, look no further than Southwest Airlines. Notice you can't book them at major travel sites, only their site. (Though I head this might be changing)

 

I agree that it is no different than your winery. Why would they or a cruise line reduce their price to break out commission? When the airlines stopped paying commissions to travel agents, did the price of airfare drop? Not at all!

 

Since not every travel agency earns the same commission, one cannot even venture a guess as to what that price would be if they tried to do that. Just because a travel agency rebates their commission (a practice that I do not believe in) it does not mean that the difference between what they are charging you and what the cruise line sells it for on it's web site is commission.

 

As for Southwest Airlines, consumers have always had the option of buying their tickets through travel agents.

[sonomaphil]

Like most agents, I love my job, it is a happy one and I don't do it to get rich, but when I see people like this guy tell us how he can do the same research, I get really Pi##e$.

 

Nita

 

Nita,

 

This whole thread was in response to one little comment I made on another thread. All I said was:

 

"Shop around and you can save a lot of money. I always do and just take the best price...but I consider a TA just an order taker."

 

I never said every TA is just order taker, I said I use them as such. That's just me and not everyone enjoys doing the research like I do. You'd love me as a client. You'd talk to me for 5 minutes and then never hear from me again. OK, maybe I'll call around final payment time or to change to a different cabin but that's about it. And I'll probably do that in e-mail anyways!

 

I'm just pointing out options...comparison shopping is good for the consumer. As I said, I've used a TA in one way, shape or form for every cruise in the past and upcoming and will continue too. I've never booked directly with a line.

 

To be honest with you I like that TA's have different prices, makes me feel like I AM getting the best deal when I find the lowest price. I'd be more than happy to quote you out also!

[sonomaphil]

I agree that it is no different than your winery. Why would they or a cruise line reduce their price to break out commission? When the airlines stopped paying commissions to travel agents, did the price of airfare drop? Not at all!

 

Since not every travel agency earns the same commission, one cannot even venture a guess as to what that price would be if they tried to do that. Just because a travel agency rebates their commission (a practice that I do not believe in) it does not mean that the difference between what they are charging you and what the cruise line sells it for on it's web site is commission.

 

As for Southwest Airlines, consumers have always had the option of buying their tickets through travel agents.

 

Joe,

 

I never said the system in place is bad. I just said to compare prices between all available options. Even when I book online, I'm still using an agency. And if hand holding is not needed, one can save some money.

[sonomaphil]

If you read the rules for travel agents, you will see that we ARE allowed to pit our names, agency names and our credentials in our signature. In my opinion, I think that the travel agents that hide behind their signature and made up names and don't tell everyone that they are a travel agent up front are the ones to watch for.

 

I am with you on this. I wish all had in their signatures what you have. I may even need to call you one of these days! I know how to figure things out! ;)

[jff50]

You are not paying travel agents anything. If cruise lines eliminated commissions and made a move to have people book directly (why would you book with a travel agent who is now charging more than the cruise line), you would see an increase in cruise fares so the lines could pay for all the extra people's salaries, insurance and other benefits. They would also have to build or rent more space to house all the extra employees. It would not be a cost saving proposition for you.

If the consumer isn't paying for the commissions, I'd love to know where the money is coming from. I don't think that the cruise lines are pulling it out of thin air. As to having to increase fares if the commissions were eliminated, I don't buy it. The infrastructure is already there for cruise lines to take direct orders. The people are already there to deal with travel agents. And if travel agents provide such valuable services, customers would continue to use them. And I still haven't heard a good reason why I should be forced to pay for a service that I may not value.

Do I think it will change? Not in the near future. Cruise lines get too much of their business through travel agents, and don't have enough incentive to alienate their distribution system. That doesn't mean that it is in the best interest of the consumer.

The system that serves the consumer best is one where the consumer is able to look at the cost and the services and determine who provides the best value. In the case of the services provided by a travel agent, cost is removed from the equation. The consumer is paying for a travel agents services whether he wants/needs/values them.

It is kind of like the health care system, where the consumer is isolated from the cost of health care by insurance (at least for those of us that have it). As a result, there are a lot of services purchased that don't provide value comensurate with the total cost. Anyone that thinks that our health care system operates efficiently (provides good value for the money spent), I have a bridge I'd like to sell you.

[S.S.Oceanlover]

If the consumer isn't paying for the commissions, I'd love to know where the money is coming from. I don't think that the cruise lines are pulling it out of thin air. As to having to increase fares if the commissions were eliminated, I don't buy it. The infrastructure is already there for cruise lines to take direct orders. The people are already there to deal with travel agents. And if travel agents provide such valuable services, customers would continue to use them. And I still haven't heard a good reason why I should be forced to pay for a service that I may not value.

Do I think it will change? Not in the near future. Cruise lines get too much of their business through travel agents, and don't have enough incentive to alienate their distribution system. That doesn't mean that it is in the best interest of the consumer.

The system that serves the consumer best is one where the consumer is able to look at the cost and the services and determine who provides the best value. In the case of the services provided by a travel agent, cost is removed from the equation. The consumer is paying for a travel agents services whether he wants/needs/values them.

It is kind of like the health care system, where the consumer is isolated from the cost of health care by insurance (at least for those of us that have it). As a result, there are a lot of services purchased that don't provide value comensurate with the total cost. Anyone that thinks that our health care system operates efficiently (provides good value for the money spent), I have a bridge I'd like to sell you.

 

I'd still like to know why you think that the cruiselines would lower the pricing if there were no commissions paid.

 

You keep saying that it would force competition. Where would the competition come from?

 

Bill

[Ivanova]

And I still haven't heard a good reason why I should be forced to pay for a service that I may not value.

Think of it this way.

 

If you book direct, what would have been a TA commission is now allotted to cover the cruise lines over head (phone trunks, utilities, phone reps, toll free numbers, etc.).

 

TAs handle about 85% of cruise bookings. If those bookings went direct, the cruise lines would have to open additional phone centers, and hire more phone reps ... so instead of reducing fares, they'll remain the same to cover their new expenses.

[sonomaphil]

Think of it this way.

 

If you book direct, what would have been a TA commission is now allotted to cover the cruise lines over head (phone trunks, utilities, phone reps, toll free numbers, etc.).

 

TAs handle about 85% of cruise bookings. If those bookings went direct, the cruise lines would have to open additional phone centers, and hire more phone reps ... so instead of reducing fares, they'll remain the same to cover their new expenses.

 

No offense but....haven't you just proven the point that he is trying to make about a TA not being really needed then?

[Ivanova]

No offense but....haven't you just proven the point that he is trying to make about a TA not being really needed then?

 

Not really, because the cruise lines don't want to handle the 85% of cruises booked through TAs.

 

The point I'm making is that if he books direct, he's not paying a TA commission, instead he's paying the cruise lines overhead. So doing away with TAs would not reduce cruise fares.

[jcanino]

If the consumer isn't paying for the commissions, I'd love to know where the money is coming from. I don't think that the cruise lines are pulling it out of thin air. As to having to increase fares if the commissions were eliminated, I don't buy it. The infrastructure is already there for cruise lines to take direct orders. The people are already there to deal with travel agents. And if travel agents provide such valuable services, customers would continue to use them. And I still haven't heard a good reason why I should be forced to pay for a service that I may not value.

 

The commission that cruise lines pay to a travel agent is a cost of doing business. It is not a figure that is built into a cruise price.

 

As for your notion that the infrastructure is already in place because travel agents call in shows that you have no idea what you are talking about. I received an award from Carnival a few years back because 98% of my bookings with them WERE NOT called in but rather booked electronically. Most travel agents book the majority of their cruises without ever picking up a telephone. We do not take up the company's time and money to make them money. All of the consumers that call them to book a cruise and then call back and make changes and ask questions cost the company money!

 

Again, you do not pay for my service. When will you realize that.

[sonomaphil]

Here's an article from last month (http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20070610/COLUMNISTS28/706100305/1201/TRAVEL), notably

 

From your article:

 

"With this alarming occurrence, one can understand that service fees appear to be salvation for full-service travel agencies in the 21st century."

 

"Be aware that you've actually been paying agents all along: the commissions they earned from travel suppliers were built into the price of the products and services you bought."

So we are paying a premium for using a full-service agent. Nothing wrong with that, if that's what you want. But don't hide that and say that the cruise lines pay this.

[jff50]

The commission that cruise lines pay to a travel agent is a cost of doing business. It is not a figure that is built into a cruise price.

Again, you do not pay for my service. When will you realize that.

So let's see--cruise price's have nothing to do with the cruise line's cost of doing business. An interesting concept, but I'm not sure anyone with intelligence and objectivity would buy it. If cruise lines didn't price their product to cover costs plus a reasonable return, they would stay in business very long.

The customer doesn't pay for your services? Are you kidding? It's part of a cruise line's cost of doing business, they cover those costs from revenues that come from customers. Again, an interesting concept, but it doesn't hold water.

Stick to the argument that you don't add any incremental cost. I still don't buy it, but it's less absurd.

Why are you so opposed to giving customers a choice? Because you are a travel agent. Hardly objective.

[sonomaphil]

The commission that cruise lines pay to a travel agent is a cost of doing business. It is not a figure that is built into a cruise price.

 

Joe,

 

Come on! "Be aware that you've actually been paying agents all along: the commissions they earned from travel suppliers were built into the price of the products and services you bought."

 

 

[newmexicoNita]

Nita,

 

This whole thread was in response to one little comment I made on another thread. All I said was:

 

"Shop around and you can save a lot of money. I always do and just take the best price...but I consider a TA just an order taker."

 

I never said every TA is just order taker, I said I use them as such. That's just me and not everyone enjoys doing the research like I do. You'd love me as a client. You'd talk to me for 5 minutes and then never hear from me again. OK, maybe I'll call around final payment time or to change to a different cabin but that's about it. And I'll probably do that in e-mail anyways!

 

I'm just pointing out options...comparison shopping is good for the consumer. As I said, I've used a TA in one way, shape or form for every cruise in the past and upcoming and will continue too. I've never booked directly with a line.

 

To be honest with you I like that TA's have different prices, makes me feel like I AM getting the best deal when I find the lowest price. I'd be more than happy to quote you out also!

Most of us like the easy clients, we aren't stupid. As for doing your own research, many don't have the time. Either you do it at home and take time away from your family or you do it at work on company time. Whatever, that is your choice to make and many people do their own research and booking. My point is, many of us are not order takers. Yes, some are, of course, same as the agents working for the cruise line or the agent booking reservations for the hotel chain. That being said, a good agent earns his/her money and do a wonderful service. NMNita

[newmexicoNita]

Think of it this way.

 

If you book direct, what would have been a TA commission is now allotted to cover the cruise lines over head (phone trunks, utilities, phone reps, toll free numbers, etc.).

 

TAs handle about 85% of cruise bookings. If those bookings went direct, the cruise lines would have to open additional phone centers, and hire more phone reps ... so instead of reducing fares, they'll remain the same to cover their new expenses.

Not onlly hire more agents and open more centers, when they hire those agents they have to pay health benefits, vacation, etc. I am sure they make out just as well or better depending on us.

 

Nita

[newmexicoNita]

I have access to information and pricing that you nor any other consumer ever see. I have phone numbers of various industry executives that will take my call personally if my clients have a problem. You just cannot compare your internet research to what a travel agent does.

 

Your car analogy is still not comparing apples to apples. You may be able to buy your at a lower price but if you don't like that dealer's service department, you can go to any other dealer to service your car. You cannot do that with travel.

you are right there. we have access to many things the consumer doesn't.

 

Nita

[jff50]

Not onlly hire more agents and open more centers, when they hire those agents they have to pay health benefits, vacation, etc. I am sure they make out just as well or better depending on us.

 

Nita

So you're saying that a full service travel agent that is generally smaller than a cruise line, spends so much time doing research and providing additional services has a lower cost structure than a large company (such as Carnival with all its associated cruise lines) that already has the systems and structure set up and just operates as an order taker.

Doesn't seem logical to me.

[S.S.Oceanlover]

So you're saying that a full service travel agent that is generally smaller than a cruise line, spends so much time doing research and providing additional services has a lower cost structure than a large company (such as Carnival with all its associated cruise lines) that already has the systems and structure set up and just operates as an order taker.

Doesn't seem logical to me.

 

In case you didn't see it the first time I'm asking again.

 

I'd still like to know why you think that the cruiselines would lower the pricing if there were no commissions paid.

 

You keep saying that it would force competition. Where would the competition come from?

 

Bill

[jcanino]

So let's see--cruise price's have nothing to do with the cruise line's cost of doing business. An interesting concept, but I'm not sure anyone with intelligence and objectivity would buy it. If cruise lines didn't price their product to cover costs plus a reasonable return, they would stay in business very long.

The customer doesn't pay for your services? Are you kidding? It's part of a cruise line's cost of doing business, they cover those costs from revenues that come from customers. Again, an interesting concept, but it doesn't hold water.

Stick to the argument that you don't add any incremental cost. I still don't buy it, but it's less absurd.

Why are you so opposed to giving customers a choice? Because you are a travel agent. Hardly objective.

 

Whoever said that I was opposed to giving customers a choice. You have the choice of booking with a cruise line directly or with a travel professional who can give you choices and help you out.

 

Here is a cut from Carnival Corp.'s latest annual report...

 

Costs and Expenses

Operating

Cruise

Commissions, transportation and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,749 1,645 1,572

Onboard and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453 412 359

Payroll and related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,158 1,122 1,003

Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935 707 493

Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644 613 550

Other ship operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,538 1,465 1,315

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 254 210

 

Notice that cost such as food, fuel, onboard are in the same cost and expense area as commissions. If we use your scenarios, then you are paying extra to the cruise line because commissions are a cost of doing business. Is that something you really want to do? What did they do for you to warrant all that extra money?

[jff50]

Can we get a few more travel agents in here to pat each other on the back, and tell us that they provide such a valuable (and free) service that there is no reason we should want a choice in whether/how much to pay for their services.

Hard to swallow the argument that having a middleman actually reduces the cost.

[jcanino]

So you're saying that a full service travel agent that is generally smaller than a cruise line, spends so much time doing research and providing additional services has a lower cost structure than a large company (such as Carnival with all its associated cruise lines) that already has the systems and structure set up and just operates as an order taker.

Doesn't seem logical to me.

 

Jeff, take a Business 101 course. Look at the size of the businesses. Of course a travel agency has a lower cost structure. The cruise line's business model does not include hand holding and customer service at the initial level. If a problem gets to that level, then a separate Customer Service department steps in. Because of the lower cost structure, we can spend time with clients. We are sales agents, customer service agents, accounting and everything else rolled into one. A cruise line call center employee wants to get you off the phone as quickly as possible. They don't have time to explain things to you. That's why people come to place like this and take information from people that have no idea how the cruise industry is run and how things work in real life. A cruise line is set up to handle maybe 15% of all cruise business. If they have to double that to 30%, they are going to have to almost double their staff, salaries, employment expenses and overhead.