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Keno Omar

Travel agents to charge fees for quotation request

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Malaysian Association of Tour and Travel Agents (MATTA) has issued a guideline to its members to start charging at least RM 30 of 'consultation fees' for each enquiry or request for quotation from customers (further enquires and amendmends would cost more). In the days when the relevance of traditional travel agents against do-it-yourself online portals is constantly being questioned, I see that this action would help to speed up the process even more.

 

The travel industry is in no way not alone in offering free advice and quotations, in the hope that they are converted into actual sales - it's all part of doing business. The travel agency that I used to plan my upcoming trip even offered a call-me-back option, I only had to leave my phone number in their website. In the UK, some insurance companies offer free gifts just for enquiring, in order to encourage potential customers to contact them.

 

What is your take on this? It would also be interesting to hear from those in the industry.

 

 

Full media release here: http://www.matta.org.my/news/view.cfm?id=820547C6-188B-76AA-0065624D9CB5224E

 

AGENCY CONSULTATION FEE PRESS RELEASE

 

Over the years airline’s commissions have declined, hotel’s internet booking have increased and the bottom line of travel agents continues to be a major factor in determining the survival of travel agencies. Moreover, travel agents have been rendering “free” service on behalf of 3rd parties like airlines, airports, insurance companies and so on in collecting fees on their behalf like, fuel surcharge fees, airport tax, and travel insurance. Travel agents need to be one step ahead of their competitors. They must be aware of what are the current trends in the industry, not only in Malaysia but also worldwide to not only stay afloat but to stay ahead. Expectations from the consumers have changed over the years from being price driven to one of quality service. Consumers expect travel agents to be professional, and to be able to deliver what they sell. In order to that, travel agents need to be professional and to be able to provide expert advice, valuable time and above all quality and reliable service.

 

BACKGROUND INFORMATION:

 

Agency Consultation Fees have been implemented in major countries successfully over the years. It has led to an increase in the level and quality of service in those countries. It is important to charge clients who require assistance to plan and construct detailed & elaborate tour itineraries as these take time and expertise of the travel agents. Travel agents are “experts” in the field of planning vacations but they have been giving this invaluable expertise away for free all these years. Agents worldwide have chosen to move to a “fees-for-all” type model to be prepared for what they see as the inevitable future of the industry. Others have done it in order to pay for substantially better service levels rather than attempting to compete based on price and high volume. MATTA believes that we are professionals dispensing professional knowledge and information and that expertise that we possess is worth a “fee”.

 

WHY DO CUSTOMERS USE THE SERVICES OF TRAVEL AGENTS?

 

It is because of the personal attention, quality service, expert advice and time factor. These are the main reasons given for making the choice to use an agent. We believe that to keep these 4 critical competitive factors in place, we need to implement a fee structure. Service is the key! Extra time and personal attention is critical. Consulting, advice and the skills related to providing them are essential. All of these things are costly but very, very important and perhaps the most significant reasons to for the implementation of a sound and comprehensive fees strategy.

 

IMPLEMENTATION DATE:

 

Agency Consultation Fee guideline shall be implemented beginning the 1st of January 2011. As this is a guideline, Travel agents & Tour operators are free to impose a charge that they feel reflects their level of service. If an agent does not want to impose any Consultation Fee, then they are within their rights to do so. MATTA is of the opinion that to be in line with international standards and to increase the level and quality of service, Agency Consultation Fee is the way forward. Customers are now more aware of their rights and if they pay for the service then the customer would expect that service to be of high quality. It will also allow the Travel agents and tour operators to provide a higher level of quality service instead of looking for quantity to survive in business.

 

AGENCY CONSULTATION FEE STRUCTURE GUIDELINE

 

FIT AGENCY CONSULTATION FEE

 

Domestic Inquires

From MYR 30.00 per inquiry / quotation

 

International Inquires

From MYR 30.00 per inquiry / quotation

 

Note :

The fees will be absorbed as part of the payment if the client decides to purchase from your agency, if not then agency fees is applicable. One free revision (on the same quotation) will be entertained. But each extra revision will be charged accordingly based on per request / per quote basis.

 

CORPORATE / INCENTIVE / MICE AGENCY CONSULTATION FEES

 

Domestic / International

From MYR 200 per quotation (for first 3 quotation )

 

Domestic / International

From MYR 500 per quotation (for 4th quotation onwards)

 

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‘Charging at least RM 30 of 'consultation fees' for each enquiry or request for quotation’ will turn more customers to buy on line. Believe competition will force those charging to close shop or change.

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What is the rationale behind charging customers for quotation or price enquiry ???....one thing for sure if my travel agent does that....he can kiss my business good bye....mad.gif

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Well, travel agents do not receive airline commissions anymore. So they pay the same amount for the air ticket as you or I pay if we book direct with the airline. Other than air tickets, travel agents may also sell hotel room nights, travel insurance, local tours, etc. They don't make too much money out of these either. So, if they don't make a profit on all these sales, why should they open shop? Nobody works for free.

 

There are still people who do not know how to book air tickets or plan their own holidays. What is wrong with paying someone to advise them and also to make the bookings for them?

 

As I see it, the travel agency industry is a dying one. Once people learn to book direct with the various airlines and other travel companies, the need for the travel agency diminishes. You will see many small agencies going out of business. Only the big ones will remain because they may also have a tour operations business.

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Well everyone knows MATTA is desperate for income. With airlines selling their tickets online, airlines' commission to travel agencies banished et al, the function of a traditional travel agency becomes more and more obsolete.

 

Seriously, travel agencies nowadays can only gain revenues from tailor-made packages and tours, not from ticket sales anymore. Travel agencies at the moment charge RM 30 for each airticket to international destinations. Most companies still engaged their services and don't mind paying this extra charges mainly because travel agencies billed their clients on a monthly basis on top of an agreeable payment terms with the clients [usually 30 days from the invoicing date] (so companies can defer payment and just issue them 1 cheque at the end of the month for all tickets purchased during that particular period instead of paying each ticket cash at each purchases if done online).

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MATTA deputy president, as quoted from The Star:

 

Some corporate clients ask several companies for quotations because it is free and, at the end, only one receives the deal. This is not fair to us. So with this fee they will think twice before doing this. We are educating them, he added.

How can deterring potential corporate clients be good for business?

Edited by Keno Omar

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“Some corporate clients ask several companies for quotations because it is free and, at the end, only one receives the deal. This is not fair to us. So with this fee they will think twice before doing this. We are educating them,” he added.

For sure not one who believes in open tender mechanism :)

I suppose only time will tell whether complying MATTA members will be able to 'educate' their customers, or the other way round ;)

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That's a really weird quote.. haha.

 

Besides, is it such a hassle to give a quotation? Serious question. Anyone can explain?

 

I think I can just open up Expedia and work up some routes within a few minutes and I can have a price already.

 

Or is this a different thing they are charging?

Edited by jani

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Why is it ok for lawyers to charge consultation fee and not travel agents?

 

Yes, one can choose to do it online but when it comes to problems, sorry, you're out of luck and you're on your own.

 

Regarding to corporate clients. Because 95% the time only travel agencies has access to these contracts with the airlines directory, corporate clients at the end will still go back to travel agencies for help. Plus, although corporate companies do concern on the extra cost, but based on the mutual relationship between corporate clients and travel agencies, the consultation fee is hardly an obstacle affecting the 2.

Edited by Jim Liu

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Don't think companies find it a problem to pay the fee. They are getting a service, afterall.

 

The biggest headache travel agents have is from people like me - infrequent traveller, don't know what kind of ticket to buy, don't know my travel dates, keep changing my mind on travel dates. Every time I make a request, they have to check and quote the new price. Its a lot of work and if I don't make any booking, travel agent just did a lot of work for nothing...

 

And I even have the cheek to say that why should I be paying them a service fee...

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Quotation is an offer and not a business transaction. Unless travel agent inform customer upfront the fee before proceed with enquiry, contract is not formed and customer need not pay.

 

As not all travel agents are bound to MATTA, those charging fee is likely to see their business taken by those not charging.

 

Historically, only sunset business looks for protection from competition. Charging fee will make them even more uncompetitive and will accelerate their demise.

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As not all travel agents are bound to MATTA, those charging fee is likely to see their business taken by those not charging.

 

Historically, only sunset business looks for protection from competition. Charging fee will make them even more uncompetitive and will accelerate their demise.

Problem is most small travel agents who do not run inbound or outbound tours themselves are having problems. Costs are escalating due to high rentals, staff costs, and other charges. Income is cut as airlines stopped paying commissions that are worth talking about (it used to be at least 9% for domestic tickets and more for international ones). Now it is either 1% or nothing. So how can agents that only do ticketing survive?

 

When the small agencies close, only big ones like Reliance will be around. And they will tell you that you have to pay service fee up front. Then we will regret that the small agents are no longer in business.

 

As I have said earlier, we will see fewer and fewer agents around. As the oldies retire, young people will not want to be in this business in the traditional sense. A new breed of travel agencies using a different business model may crop up. We will have to wait and see.

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Understand most if not all travel agents are charging service fee for issuing air tickets.

 

:drinks:

 

Yup. I think used to be RM2 and now RM5.

 

Come to think of it maybe I should start charging for quotation as well. None of mind actually came back and converted as sales. This should help recover some cost.

Edited by Waiping

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