Independent Travel Agent Fee Report, 2018 [+Free Infographic]
Happy, happy! Joy, joy! The much-anticipated HAR Fee Survey results are here! Now you may be thinking, “Independent agent fee results? Aren’t most agents who hang around HAR’s water cooler independent contractor agents?” Well, that’s true. For the purposes of this survey, what we mean by “independent agents” are travel agents who are not hosted and have their own accreditation.
Why did we dedicate an entire article to independent agents? Well mainly because travel agents really showed up en masse to take our survey! 812 of you, to be exact! (What do you call a group of travel agents? A gang? A gaggle? A caravan? A swarm? Please comment below.)
We've got tons of way to take in the data: video, inforgraphic and good old reading...
If you’re a hosted agent, don’t be bummed. You can find the hosted agent survey fee results right here. Now, back to our regular programming . . .
The Independent Agent Demographic
Who is this mysterious throng of independent travel agents that descended upon our survey? Here’s their demographic data:
- 87% female
- 12% male
- 1% other
- Cultural/ Racial Identity:
- 83% White/ Caucasian
- 14% Black/ African American
- 3% Asian
- 1% Hispanic/ Latino/a
- Median Age1: 58 years (compared to 53 years for all respondents)
- Median Experience: 13.5 years (compared to 5 years for all respondents)
In terms of gender and racial demographics, the segment of independent agents did not vary significantly compared to hosted agents.
However, there was an interesting disparity in likelihood to charge fees according to gender: In a reversal from the trends found among hosted agents, women independent agents were 13% more likely to charge a fee than their male peers, with independent women charging at a 73% rate and men 60%. (Anyone else have Destiny Child's "Independent Women" stuck in their head? Yeah. I though so!)
Back to business: In terms of age and experience, independent agents are more seasoned than their hosted counterparts: Their median age is 6 years older, and their median experience is 9.5 years greater than their hosted peers.
It’s worth noting that most accreditation options require an agent to have some industry experience before applying. This could help explain why independent agents are older and have more experience.
Business Models of Independent Agents
This year’s survey attracted a greater variety of travel agent business models. Overall, 86% of the respondents were hosted,10% independent (not hosted), and 4% were franchisees. Here’s a summary of business models among independent agents:
- 98% leisure agents, 2% corporate
- 70% were home based, 30% storefront
While leisure/ corporate focus was the same between independent and hosted agents, business models were a major point of divergence between the two segments when considering home based versus storefront. Independent travel agents were much more likely to have storefronts . . . 25% more likely, to be exact.
Most notably, 100% of independent storefront agents reported charging fees.
Independent Agent Experience Vs. Likelihood to Charge Fees
We wish we could dive into deeper detail here, but the survey didn’t generate enough data to provide a reliable breakdown by years of experience.
However, as with their hosted counterparts, independent agents were more likely to charge fees as they gained more experience.
Travel Agent Fees According to Niche
Niche also had a large impact on whether or not travel agents charged fees. The top five niches with with the highest rate of travel agents reporting they charged fees were:
- Destination Specialist
- River Cruise
- All-Inclusive and Groups(a tie for 5th!)
You may wonder why we didn’t include “Other” as number 3 on this list as it is depicted below. Reason for this is that “other” included a variety of write-in niches including culinary, special needs travel, all-inclusive, Europe FITs as well as other niches. What can we say? Travel agents can’t be put in a box!
What Kind of Fees Do Independent Agents Charge?
71% of independent agents charge a fee. This was 24% higher than their hosted peers, who only reported charging fees at a 47% rate.
Before we dive into what types of fees independent agents charge, let’s make sure we’re all on the same page when it comes to fee definitions. We explored two different types of fees in our survey:
- Service Fees: Typically flat fees per transaction/ segment of a trip (i.e. car, rail, air, hotel, change fee etc.). Service fees are more typical among corporate agents or for transactions without commission.
- Consultation Fees: Commonly pertain to time/expertise used to plan, research, or book a trip and/or support clients during their trip.
Among independent agents, 28% charged a service fee, 11% charged a consultation fee and 32% charged a combination of both fees.
Business type had a significant impact on service fees: 100% of storefront independent agents charged fees whereas only 59% of home based independent agents charged fees.
Independent storefronts were much more more likely to charge both service fees and consultation fees—58% compared to 21% among independent home based agents (a 37% spread).
The services Independent agents charged for, and how much they charged
60% of independent agents charged a service fee. Of those, 32% charged both a service fee and consultation fee. Below is a breakdown of service fees charges among independent agents who reported charging a fee. (Click here for a refresher on the differences between service fees and consultation fees)
53% of Independent agents reported booking air-only reservations. However, departing from their hosted agent counterparts, air ticketing was not the most common service fee charge among independent agents, being edged out by FITs.
Here are the top five services independent agents charged for (and what percentage of independent agents reported charging for it):
- Air Ticketing, Domestic: 60%
- FIT: 53%
- Air Ticketing, International: 48%
- Exchanges: 29%
- Rail Tickets: 26%
You can see the rest of the results for (service) fee-charging independent agents below:
The data in the graph includes the percentage of independent agents that reported charging a service fee for a particular type of travel (yep, we’re excluding consultation fees right now). It also shows the quantile range of fees charged. Whoa back up. Quantile? range? What the heck is that?
Essentially, the quantile range helps us remove outliers in order to get a clearer picture of moderate fee-charging practices. This way, when rogue travel agents charge a mere $2.50 to Suzie (their best friend's mom), or charge a whopping $1,000(,000,000,000) fee to their client Mark Zuckerberg, it won’t skew the results with giant-sized fee ranges (because that wouldn’t help anyone).
Consultation Fees and Independent Travel Agents
How many independent agents charge consultation fees, and what is their fee structure?
Of independent agents who reported charging a fee, 60% charged a consultation fee. We broke down consultation fees into flat fees, per person fees, hourly fees and other.
Respondents also had the opportunity to provide a range if their consultation fees varied (according to client, complexity of trip etc).
Popularity of consultation fee structures were a similar proportion to hosted agents: 66% of independent agents with consultation fees charge a flat fee, 20% charge a per person fee, 8% charge an hourly fee, and 6% selected “other” for consultation fee type.
With the exception of flat fees, we didn’t get a large enough sample for other consultation fee types among independent travel agents.
Independent agents reported the same median flat consultation fee as hosted agents ($75).
Why Travel Agents Chose Not to Charge Fees
Travel agents typically all the have the same reasons for not charging a fee (regardless if they’re independent or hosted). What were the top 3 reasons agents chose not to charge fees in 2018?
- I might not be able to attract new clients.
- I don’t have enough experience to charge fees.
- I just don’t want to.
We were so excited by our record-breaking survey and all its ensuing data! This year, we worked with superstar research analyst, Maga Gei, to help us crank out the data.
Also, travel agents didn’t just show up out of the woodwork to take our survey! We had soooooo much support from industry partners who help us push our survey. We want to give a special thanks to these organizations helping us spread the word:
- Travel Research Online
- Cruise Planners
- Destination Wedding and Honeymoon Specialist Association (DWHSA)
- KHM Travel Group
- Travel Planners International
- Travel Quest
A Miniature Glossary of Terms:
Median: The median is the middle value in the set of numbers. (That’s right, the middle child of data!) We used the median value to determine age and years of experience. This helped us get a clearer picture of the “average” agent, by eliminating outliers that skew the data.
Mode: The mode is the number that appears most often in a set of numbers. For our purposes, it means that it was the most frequently-occurring response among travel agents who answered the question. We used mode to determine the most common amount charged for certain service fees, in order to give a clearer picture of what the “typical” agent is most likely to charge.
Interquartile Range: The Quantile Range removes measures the range of results within the 25th and 75th% percentile. This means the range excludes the data from the lowest 25% and the highest 25%, eliminating the lower and upper outliers and offering a picture of more moderate fee charging practices.
- This year we used median values rather than average values when looking at trends such as age and experience levels. The reason for this is that the median, the middle value in a range of values rather than an average of all values, is that it’s a more accurate reflection of the “majority” of agents who took the survey. ↩