Travel Financials

Our industry has always survived on very tight profit margins. The rule of thumb was ten percent commission. In the olden days that is what the airlines, hotels and cars paid to travel agents. Now the airlines do not pay for most tickets, occasionally a business or first-class ticket pays a commission. Domestic hotels still pay 10-5 % the same with cars. Cruises vary but pay only on the cost of the cruise, not the taxes. Often taxes are more than half the cost. So, a $900 cabin with half taxes yields 10 % of $450 or $45…. A very tight margin.

Everyone in the industry was going to have a banner year! Including me. Yes, many of you will rebook in the future. But unlike a restaurant, opens and people walk in, our industry will be slow for people to walk in. And when they do the tickets will be months in the future.

Over the past years I charged a fee for airline transactions but rarely when you book a tour or cruise. As a result, everyone who has cancelled a tour or cruise with no fee from me, I have not earned a penny. If you paid in full and had insurance I got paid. Meanwhile I continue to serve and cancel what I can. I do not know how, but what I do know is that the financials of the travel industry will change. Surely, I will need to charge fees upfront. Cancellation policies will change too. Hotels, car, cruises, and tour operators may charge a fee to cancel. We will all just need to wait for new policies.

A positive attitude

Despite the tragedy unfolding around the globe, with entire countries closed to the outside world, travel will eventually resume and be as rewarding as ever. While the experience might look and feel different once the world begins to reopen, people can count on the transformative and positive impact of travel to change their own lives and the destinations they visit for the better. I just hope that begins to happen again sooner rather than later.

About alwaysharriet

With thirty years experience in corporate and leisure travel consulting, Harriet Ahouse has traveled extensively throughout the Caribbean and worldwide. An avid scuba diver, she understands the requirements of travelers both on land and in the water. On the European scene she has offered traditional and personalized travel itineraries throughout the continent--Italy, France, and England are some of her favorites. As a Virtuoso Agent, she also has extensive resources to enhance her expertise in designing individual destination travel itineraries--and honeymoons--worldwide!
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