Canada’s Top Travel Execs Take on the Tough Issues

TORONTO—Executives from Canada’s leading host agencies and consortia urged travel agents at the Travel MarketPlace conference to focus on serving clients with products that are profitable and provide unique vacation experiences.

The conference, in its second year, is dedicated to boosting the profitability of Canada’s agency community.

At a top-level panel called View From the Top, the discussion touched on a variety of issues, but the core message was clear:  travel agents who serve their clients effectively will end up profitable only if they also make sound business decisions.

Methods for side-stepping the effects of NCFs (non-commissionable fares) were one of the hot topic the experts focused on.

Upsell clients
“NCFs are always going to be there, but there are a lot of opportunities to upsell your clients products which have less NCFs,” said Elizabeth Grundon, senior director of TRAVELSAVERS.

“Some suppliers have different percentages of NCFs on different products; it’s about knowing what is, and isn’t, commissionable.”

Other panelists advising zeroing in on suppliers who offer products geared toward allowing agents to generate profit.

“Charge a service fee and sell additional services like insurance, hotel stays and shore excursions,” said Mike Foster, president of Nexion Canada.

“If you focus on fewer suppliers who are going to pay a higher rate of commission, you should get paid more than you lose through NCFs if you have the right approach.”

Independents can thrive
Opportunities abound for agents just starting out in the industry as independent contractors as well as those who are newly independent.

“If you’re an independent contractor, there are many different areas you can look for sales leads,” said Rhonda LaFosse, regional sales manager of Ontario for Travel Professionals International.

“You have to be proactive and look at where you are living or what kind of customers you’ve had in the past,” she added.

Focusing on a niche can help travel agencies differentiate themselves from competitors in their local community.

“If you’re experienced, you’ll know what your niche is and what you want to sell,” said LaFosse. “You’ll probably have a lot of customers who will follow you if you go independent.”

Commissions are negotiable
The panelists urged agents to negotiate with their host agency or consortium to achieve the highest commision cut possible.

“You deserve to get as much as you can possibly get,” said Jeff Verman, CEO of Uniglobe Plus Travel Group. “That’s what fair, but as an employer you need to know what your average transactional costs are.”

Agents should be fairly compensated based on their experience, clientele and the type of travel products they sell.

“A fair commission split will depend on your experience and volume of business,” said LaFosse. “As an independent contractor you can expect a minimum of 50%. The standard is probably 70% and for those high producers it’s up to 85%.”

Travel gets younger
Bringing younger people into the industry should be a primary concern for agency owners and managers, according to the executives.

“Bring young travel professionals into the fold,” said Grundon. “Don’t give them all the jobs nobody else wants to do, because they’ll be gone in six to eight weeks.”

A key to attracting young talent is proving to them that they can build a profitable career in the industry, despite the public perception that agents aren’t well-paid.

“When you’re trying to get people in the travel industry, you have to show them they can make a good living,” said LaFosse.

By educating young people on the profitability and perks of travel selling, you can bring talented staff members into the industry.

“There are a lot of young people who have very little interest in the travel agent side of things– talk to them about why travel agencies are a good opportunity for them,” said Foster.

“After you spend some time talking about what actually happens in the business, they will start to show some interest.”

The executives also advised agents to be wary of potential candidates who aren’t dedicated to learning the industry or those who want to switch jobs merely to escape their current employers.

“I tend to hire people who are not looking for a job and are happy where they are,” said Verman. “That happy employee is likely to be happy at my company as well.”

Break into your niche
Agents shouldn’t despair if it takes months, or even years, to break into a niche and develop a strong database of clients, according to the panelists.

“Stick with it, it takes a couple tries to attract a niche market,” said Grundon. “It takes a little bit for them to get used to you and bond with you.

“If you go out in your local community, it can take six months to a year to connect with them.”

And once you have a list of potential clients, make sure to reach out to them often in order to build lasting relationships.

“Your business is your clients, so you need to use and develop a database,” said Foster. “You need to be where your clients are and dedicated to whatever niches you’re involved in.”