The Definitive Guide to Travel/Travel Agent Requests/The Business and how it all works:
The Definitive Guide to Travel/Travel Agent Requests/The Business and how it all works:
I wanted to take time to explain how travel works. Many of you have allowed me to book your trips, and I have enjoyed working with Moda, so thank you for the onslaught of demand! Thank you for all the recommendations over the past few months, and references. This guide will make it much easier to work with us and understand the entire industry. It is about a 15 minute read, but will make it easier to understand, and get rid of some skepticism over pricing, as well as inform you to become a smarter travel buyer. Travel is very complex, so my goal is to make it easy to understand by explaining the backend of the transaction. Many Moda people know their businesses very well, and in the interest of transparency, I figure this was probably best. I have written this from some of the feedback and interactions I had with Moda.
Budget: When booking a hotel the price and commission is not set by me. I ask for a budget to know where to look, the category, etc. In most cases hotels are in a perfectly competitive market. Take for example Cancun or Miami Vegas or New York. There are hotels from $50 – $50,000 per night. I am asking for your budget so I know what category of hotel to look at, not to overcharge you. I get paid a 10% commission on most hotel transactions, sometimes 15% but very rarely (you can find the commission rates for travel agents online with a google search). If I sell a 3* at $300 a night or a 5* at $300 a night, I make $30 from both. It is in my interest to sell you the best hotel I can for the budget, so you will want to use me again. I cannot negotiate rates, with three exceptions:
Groups, which require a minimum of 10 rooms per night (can get 20-50% off the best rate typically)
Large, extremely expensive hotel rooms, exclusively over $5,000 a night. To be clear, that doesn’t mean it will cost $500 a night, it will cost $3-4k a night. Move to the $15k a night room and they can be $10k a night. That discount depends on length of stay as well, it is negotiated by me with the sales manager and revenue manager, who I likely know, or at least know how to reach. I recently did a deal on a $17k a night hotel room, for 3x 2-Night Stays for $10k per night. This is time intensive and doesn’t happen quickly and is largely relationship based. Chances are, if you can’t afford the $17k a night rate, you won’t be able to afford the $10k discounted rate. People in the category of room are trying to get the best deal for their buck like everyone else, but just add multiples to their budget. If the average person in the U.S. makes $50k a year, and a hotel night is discounted from $17k a night to $10k a night, a weekly rate is still more than a regular person’s yearly salary. There is no amount of discounting I can do to get you into that room unless you can realistically afford $17k a night in the first place. Most hotels will not upgrade people to that level of room, even their highest members. The reason is wear and tear. When someone is paying $17k a night, they simply don’t want to put the wear and tear on it. If it is a 4* hotel you have a better chance, but something like a Mandarin Oriental or Four Seasons will never ever do it…
Long Term Stays of at Least 30 days in Length, usually prepaid, non-refundable as well.
When you come to me, Budget is a very important question, just as important as time and location. All 3 of these go into my recommendation on a hotel, and I balance them with active promotions for that market. It increases your cost to vary your budget as we have limited time to work on things, especially at the low-end $100 a night stuff. We move on to other things when a client doesn’t know what they can afford, as we are mostly spinning wheels until we get to the truth. You do not save money by doing this, and this will be explained below. We have refused business because someone refuses to define a budget.
Hotel Rates are set by what is known as the revenue manager they work at each individual hotel, typically on-property. Every hotel above $75 a night or part of a major chain has one. They set rates based on different buckets of people, forecasted occupancy for those dates, comparable rates in their competitive markets, and booking source. Their goal is to maximize their occupancy rate (how much the hotel is full on any given night) and maximize the Average Daily Rate (ADR) of the hotel. They also want to maximize on-property spend, like Parking, Food, Alcohol, Spa Services, Transportation, etc…
Hotels look at total revenue for how they treat you, and why they bump you (aka. tell you the hotel is full and offer you a refund and walk you). There are 3 major buckets, 2 are equivalent to each other, and a 3rd is low on the totem pole:
Direct Rates: Hotels like when you book through their website as they pay no commission. This doesn’t always work out though as the client base is too wide. For example, a direct hotel doesn’t know if they are getting a Food & Beverage Client, a Spa user, or any other information about the guest. They could just have a quick overnight guest, that pays their $200 and leaves. You won’t get treated the worst, but won’t get treated as a VIP either. The hotel will do whatever they can to not bump a direct booking. Rates are clearly laid out and guaranteed.
Virtuoso/Travel Agents or AMEX Fine Hotels & Resorts Rates: These are considered the most profitable on average to the hotel. They are considered the creme de la creme of leisure travel. Their spend on auxiliary services is higher than direct, and the Average Daily Rate is about the same. They guarantee you won’t get bumped, and would rather upgrade you to a suite, than dump you out the building. This is why there is usually food and beverage benefits like free breakfast and/or credits, early/late check-in/out, free wi-fi, things like that attached to the reservation. For many luxury hotels, the spend these travelers offer is the highest among leisure travelers, not necessarily just in rate, but everything else. They are more likely to choose a higher category of room, spend in the hotel restaurant, go to the spa, etc… I’ve heard from Revenue Managers that they can make up to 75% of leisure revenue (groups/corporate not included. From a revenue manager standpoint, if you are at 100% occupancy with these people a bonus is coming your way. Rates are typically in-line with direct bookings, and are transparent, letting you know all upfront fees. These are the highest priority guests for the hotel, because in a sense they are pre-qualified, kind of like Moda.
Online Travel Agencies/Tour Operators/Wholesale/Bed Banks Rates: These are the Expedia/HotelTonight/Sketchy Website you’ve never heard of on Google listings. They are typically associated with bargain shoppers. The hotels have no desire to upgrade you and only will if they run out of inventory and messed up on an upgrade of one of the two above classes. They will not give you any perks, and if the hotel is full, they refund your money and send you packing. Typically, they are charging the hotel 20-40% by essentially bucking the market and filling the rooms with relative undesirables to the hotel. The hotel hates you if you are booked wholesale and will treat you as such in ways you can’t see, while trying to show professionalism and pretending like they don’t know. When the desk agent pulls up your name, it says your rate right next to it, don’t be fooled. They put you next to the humming ac unit, in a non-renovated room, next to the garbage disposal, where they haven’t replaced the mattress since the place opened etc… These rates often have hidden fees that are not upfront, and can save you money, but a lot of the time, something goes wrong, are usually fully prepaid, non-refundable (although this has loosened up a little bit since covid), limited or no benefits. They are a disaster to book but pay TA commissions well. That is why when looking at an OTA or Wholesaler you must be extremely careful, they often times markup discount rates, sometimes these rates require bundling with a flight, and if not bundled the hotel can refuse your reservation (but rarely does), and it is the least transparent. Most hotels will only give what is known as Run of House, aka… their cheapest King/Double Rooms at a discount. It is tough, hotels are balancing occupancy with low rates. Many wholesalers went under during covid because a lot of their rates were non-refundable, and they didn’t have the money for refunds. There are also usually several middlemen, that provide no value other than knowing a guy that knows a guy, that can scrape another $5 off the rate. Marriott has outright banned them and given an exclusive contract to expedia to sell to other agents like myself, but at certain fixed rates (essentially getting rid of Marriott wholesale). In the future, this cottage industry will likely disappear due to the bad actors, and sketchiness of it all. When you read reviews of, I went to the hotel and they had no reservation, this is where it comes from. When you see rates that don’t match up with the rest of the market, this is usually a wholesale rate. Expedia is large enough where they take 20-40% from the hotel without the sketchiness of the wholesale rate, but they don’t forward that savings on to you. They take it, but the hotel sees you all the same, a wholesale client. This applies to all OTAs (Online Travel Agencies). The ironic part is, a lot of times they don’t save you really any money at all in the long run, as it all balances out.
Knowing all of this, we have all 3 options for booking, and have access to all these rates. When booking a wholesale rate (which we never advertise, because of all the implications), we advise you of the risks upfront. This is one of the many things that set a Travel Agent apart from a credit card concierge, as we don’t seek to maximize profit on a transactional basis, but on a long-term basis. When booking a Virtuoso or direct rate through us, we make sure you are a priority to the hotel, and reach out to the hotel on your behalf, asking for VIP status and other things, making sure you are well taken care of.
A quick note about All-Inclusives: There are no Luxury All-Inclusives. There are Luxury Hotels that offer All-Inclusive as an add-on, but it is typically very expensive, and rarely done as the numbers simply don’t work out. To add all-inclusive at a luxury resort its about $200 a day + tax per person. A major all-inclusive only, like Dreams, Le Blanc, Sandals, you are sacrificing significant hotel service, food, and quality for All-Inclusive. There are still hidden fees, want the prime steak? $20 supplement, want Grey Goose? $5 supplement. By the time you get done, it adds up, and does it quickly, unless you are very disciplined (which most aren’t, hence why they chose all-inclusive in the first place). All-Inclusive is a middle-class budget product and should be regarded as such, which is fine for someone on a beer budget, it appeals to the same people that like timeshares, and are afraid if they have one extra drink at the bar they will burst their budget. They are designed to flat rate your vacation due to fear of high food and beverage costs. They pay us 15-20% commissions to sell you this, not wholesale, direct. We book it, but never recommend it. Most people that have skipped all-inclusive have had better overall experiences, and it has cost them at most 10% more, most times it’s cheaper. Because of the volume we do, we are still experts on them, just know they inherently go against the client’s interest, and therefore you will see ask the question Luxury or All-Inclusive, as you really can’t have both.
In conclusion, there is no rate we can’t match, just rates we feel uncomfortable matching, because as the old saying goes, if it is too good to be true, it probably is.
Flights can often make up most of the cost for travel. There is complexity to rates, and we will discuss this:
There are 3 categories of flight rating:
Cash Retail Bookings: Advertised fares you can find on Google Flights. Flexibility with dates, means it can be cheaper. There are roughly 20-25 classes on flights, and multiple classes depending on time booking, bucket availability and fare rules, and benefits like being able to upgrade, or bring bags (yes I can sell you a coach fare that includes bags). This is all controlled by a GDS, whether you book through expedia, the airline, or us. A GDS is essentially a direct plug to all the major airline. It is a computer application everyone in the travel business uses to inventory and sell flights, hotels, whatever. We can do everything a gate agent can, and more. If there is a solution, a person with direct access to a gds can fix it. Cancellations, changes, refunds, voids, etc… One thing a travel agent can do is say you book a flight on a Friday evening for Saturday morning. You miss the flight Saturday morning, we are not supposed to, but we can void that ticket away until Monday morning, that’s right, like it never even happened. It just drops off your pending charges on your credit card.
Miles Bookings: Usually a fixed mileage per route, except during sales with very limited inventory, based on certain rules. We do not book these, as they don’t pay commissions, but can consult for a fee.
Air Consolidators: They do 1 of 3 things, they either buy miles at a discount, then redeem them for your ticket (you don’t earn miles on this ticket), buy tickets in advance based on projected travel, at a discount, then rename them to you or they use corporate discount codes on different airlines to save money. It typically only makes sense on international business class, and long haul flights. This strategy is becoming less and less effective as miles get devalued after covid and costs of flights drop. Once upon a time it wasn’t uncommon to see biz class flights discounted 60% consistently. Now with flights to Europe being around $2k round-trip business class, there isn’t much to save.
Also note: There have been some scams on the internet, like buying delta gift cards at a discount, then redeeming them, but also stealing them. Cycling through travel credits received during COVID (through name changes, etc. which airlines have been cracking down on) and other not so kosher things where you are hoping not to get caught. The best way to view consolidators is similar to a wholesaler in the hotel section. Restrictive, and a bit messy. Some are great, some are bottom feeders that will do anything to make a buck, ignoring collateral damage. We only work with consolidators we vetted and trust, that have been in the business for years, and even then 80% of our tickets don’t go to Consolidators as they will not benefit them.
Never book a rental car unless with a corporate discounted rate. We have one for all the major agencies. If you book direct you are overpaying. We make very little off rental cars, 50% of them are tax, and they only pay 5% commission, they pay us late or not at all, all the different corporate codes have different commissions, etc… Avis is the most reputable, followed by Enterprise, with Hertz being in the middle. Never rent from a non-major company. Non-Majors are “Damage” experts, and derive their income from extra fees, charges, and insurance, and never work out to be cheaper in the end. Most of the other majors are owned by avis, hertz, or enterprise for example Budget is owned by Avis. We typically will only book rental cars in conjunction with booking something else, as the time consumption from rental cars is not worth it.
As a quick note here: The rumors are true. Rental car agencies sold off all their cars during covid, having depreciating assets for a year sucks. So rental car prices have tripled in the past year. No longer are their $19 a day specials. That Chevy whatever econobox is now a $100 car after taxes and fees and no corporate rate code can save you.
Due to Covid we haven’t done many cruises, but typically they run sales on bookings through value adds. Normally through us you qualify for extra credit, but the price remains the same generally across the board, especially on credits. They usually sell to all agents at a wholesale rate, with a large commission, and agents fight on either service or on board credits to win you over.
Travel Insurance should always come from a major carrier, we use Allianz. They are one of the largest and rarely deny claims. There are two ways to do it, and most policies are based on trip value.
This is done one of two ways. On a per-trip basis or an annual basis. Annual plans are $450-$750 a year and cover trips up to $10k per individual (do a family of 4, with all 4 having insurance, you have $40k in coverage. Each time you recycle to your home town, you start again. The rest of individual trips is generally 4-6% price to trip cost depending on the plan. The plans typically include medical coverage, baggage coverage, trip interruption, trip cancellation due to medical reasons, etc… if you are a big purchaser of wholesale rates, it is a great way to hedge your bets. Most people have travel over 5x a year, will pretty much guaranteed make their money back from an annual plan. Inevitably a flight will get delayed, a hotel bumped, or a bag lost. It pretty much takes 1 minor claim to recoop the entire amount on an annual plan. They also provide you rental car and medical coverage, and medical evacuation, so when that big million dollar I feel down while hiking somewhere happens you know you tell them to take you to the best hospital… Commission is lowest on annual plans, and highest on regular plans, but a smart agent knows when to buy insurance and when not. The routine trip to Mexico? Probably not needed. A frequent traveler, or a person with a global trip involving expensive hotels, almost always worth it.
Going to keep this one short and sweet. Operators own and operate planes. Brokers buy from them then mark up to consumer at 1-7%. Some operators also broker and use a combination of their own planes and others (thing Delta/XO). Some operators don’t work with brokers at all. Jet cards just give free money to brokers for them to hold, and rarely save you money, but if they do it usually involves traveling at Christmas time. All planes are essentially listed on jet broker websites, that you can pay a subscription to in order to receive bids from the operators. I can bid them, or just send you the link and you can become a jet broker in an hour. Brokers aren’t licensed, operators are. Argus Safety Ratings can be selected in the bidding system, and if you select it only platinum operators will respond. A broker that is Platinum rated, is essentially just choosing planes with Argus Platinum ratings from operators. We charge $500 per leg to broker any private jet, no commission.
Now that you know how most of the industry works, and the pricing let’s talk about what we do and what we need from you to make your experience excellent.
Some basics asks when chatting with us:
A budget, dates, region, amount of flexibility, and goals of the trip. I say this because, you may be looking for a family vacation, a honeymoon, a bachelor party, or just going to sit your ass on a beach and not work, we want to know it all. All of this allows us to choose the right resort for you. The more information you give us the better.
For larger bids, like a European or Asia vacation, it is an involved process, involving learning about you and planning. It is time intensive, and we ask that you book your trip with us if you engage us. We will spend hours back and forth with you planning your trip and we will most likely save you money, or cost you the same anyway, if you want to get extra expedia points or a Costco gift card for toilet paper, then use their consulting services (hint: they are not good), or just google it. If you want professionals that do this all day, we can help.
For 1-3 nighters we are essentially rate monkeys. We fire off the rates and comparable hotels priced all-in unless you want to go wholesale. We use benefits to create an effective rate, and measure the standard rate against the benefits rate. We then tell you the most effective rate to book with us.
If you are a prior client, you can ask to store your info, including credit card/passport/ rewards numbers/ contact info/ TSA pre check/ DOB in our system. It is run by the airlines (called ClientBase), and then we don’t need your info again. For each booking we need Name/Phone/Email/Credit Card and sometimes address.
For VIP Bookings, aka. $2500 over a night consistently we do profile services to further enhance your experience. This consists of doing an interview with you and your travel partners, and going over all your favorite things to really hone in a custom travel experience. It typically takes about 30 minutes to 1 hour of your time once. We send this to hotels in advance to get a vip experience for you. The hotel will usually pay attention to this, and will do things like in-room check-in etc…
Don’t lie about your budget. Just this week I had 2 people bid hotel rooms above $2500 a night. One of them admitted we had the best price and benefits, then ghosted us, the other went from a $7k-$10k budget per night to a $400 a night budget. You do not go from $3,500 a night to $400 a night. It doesn’t happen… If you want a 2 bedroom villa in vegas with a private pool, that needs approval from the hotel as they prioritize gamblers over you. This is a big deal, involving an hour or two of calls, and some begging for approval on a weekend. Doing this, then not booking the trip makes us look bad, and you could be affecting a real client’s ability to receive the discounted rates or the room in the future. It wastes all our time, to make you feel like the baller you aren’t, so if you can’t afford it, please don’t ask for a bid on it. Leave it to those that can, so we can make sure they get the pricing they need. Think of it this way, you use us when you can afford to pay retail but want a better deal. If you cannot afford $7k a night, then chances are you can’t afford $4,500 a night. Just be honest, and we will find you something great that you can afford, as we work with everyone’s budget. Also asking us to get you a discount on an expensive room, then not booking does not lead to us thinking you are a big client, it just makes us think we should skip you in the future, as you are a tire kicker. People book what they are used to. If they are used to spending $2,500 a night, then they will likely book something around there, unless it is for business travel, or some specific purpose, but then it is obvious to us why they are booking the Marriott in Columbus in a Junior Suite…
Spending over $200-$250 a night goes to myself for travel requests, under $200 a night goes to David Doyle. Domestic Flights go to Alex Do. International Biz Class comes to me that then goes to a consolidator we use or the GDS depending on the dates.
Why use a travel agency?
Knowledge: I personally book 8,000 hotel nights a year. I have seen it all and know everything about every hotel there is. On any given day I can have up to 30 people traveling. We know the best of the best, and the worst of the worst.
Service: There are things here that aren’t quite apparent. If we need to change something, a hotel or airline rep is always waiting on the other line for us. You don’t have to have your vacation ruined, one text, and we get it resolved. We are plugged directly into the airlines through a system known as a GDS. When stuck at the airport, we can do everything a gate rep can do, but with no line at all. Just a text. We can book flights, 30 mins from departure, change, exchange, everything without a call to the airline or a call queue. When something goes wrong it can be fixed in seconds rather than hours, meaning you get out of the frustrating experiences quicker.
Ease: if you store a profile with us, you can send 1 text to book. Maybe a few if there are options. You’ll know you are staying in the best hotel for your buck every time and if frequent booker, we will learn your likes and dislikes, and choose things based off that and your past experiences. This isn’t automated, we know you liked this resort, and hated this other one. It’s a human interaction, one you cannot get from a OTA or your credit card.
Benefits: Because we are affiliated with Virtuoso, Hyatt Prive, Ritz-Carlton Stars/Luminous, Hilton Impresario, and every other program you can think of, we get benefits you can’t at most 4/5* hotels. Sure some programs offer similar benefits, but combined with the service, it would be odd to use them.
No fees: We are a no fee agency, we charge no membership fee like amex, no planning fees, and rarely a service fee (only on domestic flights since they do commission, and we usually encourage you to go to Alex Do who charges no fee).
Earn Points: On non-wholesale rates, you earn points from the hotel/airline/etc as you normally do, and status.
Luxury: We offer a Luxury service. Having someone behind a keyboard and a phone 24/7 acting on your behalf is a luxury service. When you call in to Expedia or an Airline, no one ever enjoys that experience. Essentially by booking with us, you become the frequent flyer that spends more time in a plane than at home. You become the VIP at the hotel. You can text your “assistant” and get a hotel booking at a sold-out hotel. It is a luxury. While we can price match everything, and we may save you $5 here and there, or get you a great benefits rate at a hotel, we are still at our core a luxury service, and you are taking advantage of that service, by not having to have a black card or something to get that service. A lot of our clients dump their AMEX concierge for us, because we are easier than calling the number on the back of their card. We can do things others cannot. For example, AMEX will not individually negotiate hotel rooms on your behalf (why would they?), AMEX will not tip the guy at Carbone for a last-minute reservation on a Friday night, they will just make alternate suggestions. We do all these services depending on the level of client you are, and even the smaller guys can benefit with this, all without an additional fee (the tip though is reimbursable unless you are at a high rate with your other stuff).
I hope this helps you to understand the underpinnings of our industry and how it works, and how travel vendors think of you, and how to find the actual “best deal”. Sometimes the best deal isn’t in price, but in the service and advice. Now you know exactly how the industry works, who gets paid, how, etc… Travel is extremely complicated when you get down into the weeds. It is our job as travel agents to simplify it for you.
PM me to book or if you ever have travel questions, happy to just chat!