How much of a travel agent commission is too much?
Ten percent? Twenty? How about 100 percent?
That’s no academic question. Every month, it seems, several indignant readers contact me because a hotel accidentally showed them the net rate it was paid by a large travel agency like Expedia, Orbitz or Travelocity. They want their money back.
The response from the online agencies is: If you care to book several thousand rooms at a time, we’re sure the hotel would offer you the same price.
But what if it’s not a bulk purchase?
That’s what happened to Andrew Solow when he bought train tickets from Moscow to Vologda through a travel agent in San Francisco.
After traveling to Russia, I learned that my travel agent charged me $676 for train tickets that only cost $338.
When I confronted her with the evidence of the overcharge, she claimed that there were three different commissions that I had been charged and she refused to refund the overcharge. The $338 “commission” was not previously disclosed.
How can I get my money back?
I suggested that he write a brief, polite letter to the agent, requesting a refund. It turns out he had already done that, and that the agent had ignored him. So I wrote to the agent, and she finally responded.
I am very sorry I couldn’t answer your letter earlier, I was very busy working with a group from Russia.
In response to your letter from August 4, I hereby inform you that unfortunately we cannot satisfy your refund request. We stated very clearly our conditions: “All sales are final and nonrefundable.”
On my part, I must tell you that we are using different types of services and products from wholesale companies in Russia that we are dealing with, including our Moscow office for making arrangements for our clients, and not getting any commission from them.
The price given to our clients has to cover our expenses to buy these services as well as our Moscow office expenses and certainly make some profit. These components are the base of the final cost of the booking.
By signing your invoice and paying in full for the services booked by you you agreed to the amount stated. This is the way all retail business function and therefore we don’t see any reason to change it.
We appreciate your understanding and and thank you for your business.
In other words, we had to pay someone else for the tickets, and they charged us a fee, which we had to pass along to you. But the agent had initially claimed she was only taking a 10 percent commission. Does that third party really account for the other 90 percent? If so, maybe I should quit writing about travel and start selling Russian train tickets.
When is a travel agent commission too much? It isn’t unusual for an agent to take a 15 percent commission on a cruise, and with overrides, a tour operator can pay 20 percent or more. No one begrudges a travel agent for accepting these bonuses. It’s how business is done.
If the market will sustain a 100 percent commission, I might even go along with that. But lying to a client about your commission and then telling him “tough luck” when he finds out you billed him twice the cost of a ticket — that’s not a gray area. That’s just wrong.