Agents have been urged to start charging for their services by hotelier Sir Rocco Forte.
Speaking at the Association of Independent Tour Operators Specialist Travel Agents conference this weekend in Warwick, the keynote speaker urged delegates to consider the value of the information they provide and the services they offer.
He cited New York travel agent Bill Fischer, who owns Fischer Travel Enterprises, as an example of just how much some agents can get away with. Fischer charges celebrity and super wealthy clients a $100,000 ‘joining’ fee and a $10,000 annual retainer to arrange last-minute bookings, reservations at hotels that have no rooms left or seats on overbooked flights, for example.
He said: “I’m always amazed when I talk to travel agents as to how knowledgeable you are about destinations and services. Many of you know almost more about my hotels than I do, if that’s possible, and I find that quite something.”
Sir Rocco also reminded agents of the vital distribution role they play for suppliers, adding: “We have 800,000 customers on our database which I’m quite proud of but it is a fraction of our needs and you have huge databases which I can never hope to have.”
He said his luxury hotel chain the Rocco Forte Collection had focused on the quality of service and its properties during the recession and urged delegates to do likewise, rather than competing on costs.
“Low prices are not good for any of us, if you’re a travel agent it blurs the commission you receive and as a tour operator it reduces your margin,” he added.
“A price-based [selling] strategy is completely the wrong strategy with the luxury market. If you’re selling on the basis of price then the lowest price is always going to win and the Marriott’s and Expedias of this world will do better than you do.
“As the market improves you’ve got to make sure you sell your products on the basis of the specialist skills you have and not just the price.”
Sir Rocco admitted 2009 had been an “annus horribilis” for the Rocco Forte Collection with overall sales down by 20%, although some hotels in the worst-hit destinations were as much as 40% down.
However, he added his properties in both Edinburgh and London are expected to finish the financial year on April 30 with more sales than the previous year, largely thanks tourists from the US and eurozone taking advantage of the weakened pound.
He had also been heartened by a 5% year-on-year increase in sales of the hotel chain in December and predicted the US economy would grow by 4% this year.