The 2020 Independent Travel Agent Fee Report [+Infographic]

Have you heard? HAR’s 2020 Fee Survey results are in! With over 1,000 survey responses, HAR amassed a mountain of data. So much so, that we’re able to parse out results for hosted travel agents and independent travel agents.

Wait a minute. Aren’t hosted agents independent contractors? Well, yes. It gets so complicated! But for the purposes of this article, when we say “independent travel agents” we’re referring to agents who have their own accreditation.

In 2020, 16% of our respondents reported they were independent. Here’s a bird’s-eye view of this segment of travel agents:

Did this whet your appetite? I sure hope so, because a smorgasbord of data awaits! And if video is your preferred way to intake information, we've got that for you too:

But before we dive in, I want to emphasize that all this data was collected pre-coronavirus. We’re not sure how COVID-19 will impact fees, but we’ll find out with next year’s survey.

Onward!

⭐️ HAR ARTICLE HIGHLIGHTS: ⭐️

1. Fee Survey Primer
2. How Many Independent Agents Charge Fees?
3. What Service Fees do Independent Agents Charge (and How Much?)
4. What Consultation Fees do Independent Agents Charge (and How Much?)
5. Agency Models of Independent Agents, and How it Relates to Fees
6. Experience and Likelihood to Charge Fees
7. Independent Agents Who Do Not Charge Fees
8. Independent Fee Survey Takeaways
9. A Glossary of Terms

Infographic: Independent Travel Agent Fee Report Overview

Here’s the visual. It’s really pretty, but we don’t recommend printing it out unless you want to wallpaper your entire house or to use it as gift wrap (a whole lotta great data = a whole lotta paper).

You may notice that trends among independent agents are wildly different than those of hosted travel agents. How would you know such a thing? From our recently-published results, “The 2020 Hosted Travel Agent Fee Report.”

HAR’s Fee Survey Primer

Our survey explored every nook and cranny of fee charging practices. But before we dive into results, let’s make sure we’re all on the same page when it comes to definitions.

In our survey, we explored two types of fees:

1. Service Fees: Typically flat fees per transaction/ segment of a trip (i.e. car, rail, air, hotel, change fee etc.).
2. Consultation Fees: Commonly pertain to time/expertise used to plan, research, or book a trip and/or support clients during their trip.

Additionally, in this report we’re going to throw around words like median, mode, and interquartile range (the scariest one, in my opinion).

I understand you probably didn’t get into the travel industry because of your love for statistics, or for an added edge in your Scrabble game. But don’t worry, all you need to do is click on the word and you’ll be taken to a short lay-person-friendly definition. You can try it right here! Interquartile range.

Okay, back to our regular programming.

How Many Independent Agents Charge Fees?

Okay, so the intro had a spoiler: 75% of independent travel agents reported charging fees in 2020. This is a 4% increase from our last fee survey in 2018, when 71% of independent agents reported charging a fee.¹

Among independent agents who charged a fee:

These results were close to our prior survey, with a 5% increase in the likelihood to charge service fees only, no increase in the likelihood to charge consultation fees only, and a 1% decrease in the likelihood to charge both a service fee and consultation fee.

Independent travel agents were much more likely to charge fees than their hosted counterparts (75% compared to 52%). The “both” category (charging a service fee and consultation fee) experienced the most significant difference, 31% among independent agents, compared to only 16% of hosted agents who charged both a service and consultation fee.

While independent agents were much more likely to charge fees than their hosted counterparts overall, the growth in percentage of agents who reported charging fees in 2020 was equitable, with a 4% increase among independent agents reporting they charged fees and a slightly higher 5% increase among hosted agents agents.

Why Do Independent Agents Charge Fees?

This year was the first year we asked why travel agents charged fees. The top 4 reasons to charge fees in 2020 were as follows:

Independent agents’ primary motivation to charge fees was to value their time and expertise, leading the 2nd most common response by 55%. These top 4 responses are identical to hosted responses in rank.

If you’re curious to dig into why you might consider charging fees, we have a ton of resources for you:

1. Listen to our Travel Agent Chatter podcast to hear how seasoned destination specialists Madeline Jhawar, owner of Italy Beyond the Obvious, and Andres Zuleta, owner of Boutique Japan. Both agents earn a majority of their income from fees rather than commissions.
2. Do you need a little extra encouragement to charge fees? Check out HAR’s guide to charging fees here. ]
3. Want to refresh the fee-charging practices you already have in place? Check out these creative fee strategies.

What Service Fees Do Independent Travel Agents Charge (and How Much?)

Overall, 64% of all independent agents charged a service fee². This is a 4% increase from our prior results.

When homing in on the segment of independent agents who reported charging fees, 85% reported charging a service fee. Below is a breakdown of the types of bookings for which independent agents charged, the median fee, and the interquartile range (IQ range):

Fewer independent agents charged for FITs in 2020 than in 2018 (40% compared to 54%). Cruises also experienced a double-digit drop in response rate (an 11% decrease), with only 13% independent agents charging for that booking type in 2020.³

Alternately, independent agents reported charging fees for international air at a much higher rate this year, responding at a 24% higher reporting rate in 2020 compared to 2018 (72% compared to 48% respectively).

In the top five booking categories, there was an 8% increase in fees for rail tickets and a 7% increase for frequent flyer fees⁴.

Compared to hosted agents, independent agents were the same or more likely to charge for services in every category. (See infographic for more details)

What Consultation Fees Do Independent Agents Charge (and How Much?)

For this section, we continue to focus on independent agents who reported charging fees. Among this segment, 42% reported charging consultation fees. This is a 1% decrease compared to the same segment in 2018.

Here’s a breakdown of consultation fees with the percentage of agents that reported charging that type of fee. Where we had enough data, we also included the median fee and the range of fees charged:

Flat fees were on trend with 2018 results with a modest 1% increase in those that charge a flat fee in 2020. Among those who charged flat fees:

1. 96% charged a one-time flat fee
2. 4% charged a flat fee per day

Plan-to-Go Fees

This year HAR added a “plan-to-go” fee option to our survey in addition to our usual suspects listed above.

A plan-to-go fee is an upfront payment agents require from clients in order to render their services. The plan-to-go fee—in full or in part—is then applied to the booking if the traveler decides to book through the agent.

Of the independent agents who charge fees, 35% reported charging a plan-to-go fee. Among those who charged this fee:

1. 60% applied the entire fee to the booking
2. 20% applied a certain dollar amount to the booking
3. 20% applied a certain percentage to the booking

Agency Models of Independent Agents

“All-Inclusive” and “FIT” were the most common niches among independent respondents

Independent travel agents varied in how they conducted business. Here’s a big-picture on the business models of independent agents including location, hours worked, niche and how these factors impacted their likelihood to charge fees:

Home Based vs Storefront

Independent agents were much more likely to work at a storefront than their hosted counterparts: While IA only accounted for 16% of survey respondents, they accounted for 69% of the total storefronts in our survey.

Among independent agents only, 36% were storefront and 64% were home based. This is a 6% increase in storefront agencies from 2018 results.

Independent agents who worked at storefront agencies were also much more likely to charge fees than their home based peers: 89% compared to 68%. This trend is consistent with hosted results as well in 2020.

It's also worth noting that 69% of all storefront agencies were attributed to independent travel agents in this year’s survey. Additionally, independent storefront agencies had significantly higher median experience that hosted storefront agencies, 28 years compared to 15.5 respectively. (We'll chat on how experience alone impacts fees soon!)

Corporate vs Leisure

In 2020, 9% of independent agents who completed the survey were corporate agents. This is a 7% increase from 2018, when only 2% of independent agents were corporate.

Corporate agents were more likely to charge fees than their leisure counterparts, 80% compared to 75% respectively.

While independent agents were more likely to charge fees than hosted agents overall, corporate independent agents departed from this trend:

However, independent corporate agents departed from overall fee-charging trends, with fewer from this segment charging fees compared to their hosted counterparts: 80% compared to 92% of hosted corporate agents.

Full Time vs. Part Time

84% of independent agents worked full time (30+ hours). This is much higher than hosted agents, where only 59% reported working full time.

84% of independent agents worked full time (30+ hours). This is much higher than hosted agents, where only 59% reported working full time.

Independent travel agents were rewarded with a greater number of clients: In 2020, agents’ time investment had a direct relationship to the number of clients. 62% of independent travel agents reported having 100+ clients, whereas only 29% of hosted agents reported the same in 2020.

Fee Practices According to Niche

The top 5 niches among independent agents were:

1. All-Inclusive
2. FIT
3. Ocean Cruises
4. Groups
5. Weddings/ Honeymoons

Three of these niches—FIT, Groups and Weddings/Honeymoons—were also among the top 5 niches to charge a fee. Below is a list of niches most likely to charge a fee and the response rate of independent agents who reported charging⁵:

Weddings/ Honeymoons, is new to the top 5 niches most likely to charge, with many more independent agents reporting charging a fee in 2020 than 2018 (91% compared to 53%). (See our full infographic for complete details on niche and likelihood to charge fees.)

ASTA Membership & Likelihood to Charge Fees

Industry engagement had a strong correlation to charging fees. 74% of independent agents reported belonging to a travel association, with the majority belonging to ASTA and/or ASTA-SBN (52%).

Independent agents who belonged to ASTA and/or ASTA-SBN were more likely to charge fees, 76% compared to 52% overall.

Experience and Likelihood to Charge Fees

Independent agents reported a significantly higher median experience in 2020 than in 2018, 19 years at current compared to 13.5. Furthermore, independent agents also had significantly more experience than their hosted counterparts, who only reported a median 5 years experience.

The median age among independent agents in 2020 was 59, in comparison to their hosted counterparts whose median age was 54 years.

Following trends across all travel agent segments, new independent agents were less likely to charge a fee: only 68% of new independent agents charged fees ⁶ compared to 76% of experienced agents.

Below, the chart compares experience to the likelihood to charge fees for independent agents. These trends are similar to previous years’ results.

Independent Agents Who Do Not Charge Fees

25% of independent agents reported they did not charge fees. Among this segment, here are the reasons they reported charging no fees 2020, ranked below:

Client retention was the primary reason independent agents chose not to charge fees in 2020 (compared to “I might not be able to attract new clients” in 2018). Another notable change from 2018’s results is that in 2020 independent agents were much less concerned about lack of experience: While that reply ranked 6th in 2020, it ranked 2nd in 2018.

It’s also interesting to note that among all respondents (hosted and independent agents) who did not charge fees, only 9% were independent agents.

Do Independent Agents Plan to Charge Fees?

This was the first year we asked about future prospects of charging fees. When asked if they planned to charge fees in the next 12 months, only 8% of independent agents replied “yes,” 46% replied “maybe,” and 46% replied “no.”

While the trend is similar to hosted agents, independent agents were less likely to consider charging fees in the next 12 months.

Thank You!

HAR had a lot of help in drawing agents to our survey, and we couldn’t have provided this data without them. Who are these good samaritans of the travel industry?

1. ASTA
2. KHM
3. Nexion Travel Group
4. Oasis Travel Network
5. Travel Planners International
6. Travel Quest Network
7. Uniglobe Travel Center
8. Outside Agents

Further Resources

Stay tuned because there is a heckuva lot more information to come, including a report that digs into the relationship between demographics and charging fees! We'll keep you posted!

A Glossary of Terms

1. Interquartile Range (IQ): A typical "range" shows us the lowest and highest fee. But the interquartile range helps us remove outliers in order to get a clearer picture of moderate fee-charging practices. This isn’t to discount your fee strategy if you charge $1,000 for fee for international air, or if you only charge $2 to grandma Matilda because she pays you (literally) in dimes. It’s just to help give a clearer picture of what the “average” hosted agent is charging. For those really nerding out, the Interquartile Range measures the range between 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.
2. 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.
3. Median Range: When we offer a median range the numbers reflect the spread between the most common lowest fee and the most common highest fee reported by our respondents in our survey.
4. 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.

Footnotes

1. Why no 2019 results? We conducted our 2018 at the end of year and published the results early 2019. After that, we modified our survey schedule, releasing it in Jan. 2020 rather than late 2019 ↩
2. Of those, 49% charged both a service fee and consultation fee ↩
3. Four additional services experienced a decline in response rate in 2020: Exchanges, 3% drop; Refunds, 6% drop; Special Coupons and Shore Excursions, 1% drop. ↩
4. The remaining categories—accommodation only, car only, cancellations, and ancillary services—experienced a higher response rate for fee charges in 2020 compared to 2018. Tour packages were the same in 2020 as in 2018 ↩
5. River Cruise and Adventure Travel ranked 2nd and 3rd respectively, but we did not have enough data on those specific segments ↩
6. We consider “new agents” those with fewer than 3 years experience ↩