Let’s start by taking a closer look at what you should sell. Just as important; we’ll also show you what to avoid selling.
Qualifying Potential Sales
Your goal is to identify the potential luxury air sales opportunities with your client base, and handle them with the utmost care as set forth in the rest of this chapter.
Here are the three simple requirements to identify a luxury air request that will be most profitable to you:
- The flight originates in the USA or Canada.
- There is at least one transoceanic leg. This means a destination in Europe, South America, Asia, Africa, or Australia.
- At least one international leg is either business class or first class.
International flights that do not originate in the USA or Canada, even if they meet all the other requirements, are not usually profitable. This is because the airlines do not offer lucrative NET fares on those.
Tip from the Pros: A leg refers to each portion of an itinerary. Each time you take off and land, you have completed one leg. A one way, direct flight would have just one leg. A round trip ticket has two legs, and a multi-city itinerary will have multiple legs.
A leg is not to be confused with a flight segment. A segment is one complete portion of a trip, and ends either when you change flight numbers or when you arrive at the destination city where you want to spend time. So an itinerary from Boston to San Francisco with a stopover in Orlando may be a single segment, but it includes two legs.
But What About Coach/Domestic?
Let’s be clear. We’re not telling you not to sell non-luxury air. We’re simply stating that luxury air will get you far better returns.
There are a few reasons why an agency would offer economy fares:
- It’s all they’ve been doing for years. Even though the profits are low, they haven’t evolved yet. (Hopefully they are reading this training and are ready to make some big changes.)
- They provide a full service for their clients, so clients don’t need to deal with separate agencies for their non-luxury tickets. Even though they don’t earn much on the non-luxury fares, they know that their clients are happy with their one-stop-travel-shop. As long as they keep a healthy balance of luxury air itineraries, they can remain very profitable.
- Similar to reason two, tour operators will also sell non-luxury tickets, since the bulk of their profits do not come from the airfare.
As you can see, reasons two and three are very legitimate reasons to sell non-luxury. But, if you are looking to profit from the sale, it is best to stay away from all economy or domestic flights.
Domestic: We’re not just referring to economy here – we’re including domestic business and first class seats as well, which do not come with the same great commission levels as international flights do. In fact, the luxury level of domestic first class seats may even be less than premium economy seats on long haul flights. The standard of service for domestic flights is very different from what you would find in business or first class seats on long haul flights, which were specifically designed for supreme comfort on those lengthy overseas trips. With domestic first class seats, you get a bit more room and incline, but it is nowhere near the comfort you will find on a first class international flight. Therefore, the profit margins are low as well.
Economy: Airlines also provide extremely small savings on economy flights as well – and this includes international economy. From a travel agent’s perspective, that usually makes them far more hassle than they’re worth.
But Why no Caribbean?
Understandably, any fare within the USA or Canada is considered domestic. But people often ask why places like the Caribbean are not encouraged.
The reason is, like domestic fares, Caribbean itineraries offer very low commission, or are non-commissionable, so you will earn little to no profit on them.
And it’s not just the Caribbean. The following destinations are all non-preferred destinations in regards to luxury air:
- Hawaii and Alaska
To sum it up, When you hear the term “International Luxury Air”, it most often refers to trips originating in North America, and with a transoceanic destination in one of the following: South America, Asia, Australia/Oceania, Europe, and Africa.
Marking up: How? When?
Airlines have rules in place, and usually only allow a certain percent of markup above the base fare. As a general rule of thumb, you can mark up on any fare – both NET and discounted – as long as it is comparable to, or less than, the published fare.
Marking up is all about finding that happy middle ground where you are able to give your clients a discount that will keep them coming back to you for all their airfare needs – all the while giving yourself enough of a markup that makes all your effort worthwhile. Remember – if your clients can find the same fares online, why would they bother coming to you? Give them a reason to stick with you and they will be your clients for life.
Tip from the Pros: A good vendor may be able to provide you with a suggested fare that you should charge your client. Their years of experience will allow you to eliminate the guesswork, and make sure you’re not charging too much or too little. Make sure you find a vendor that can assist you with this.
The following few fictional examples will illustrate what typical business class fares and markups may look like:
|Airline||From>To||Fare type||Published Fare||Your Cost||Your Markup||Suggested Fare||Client Savings|
|Air France||BOS>CDG||NET||$2834|| |
As you may have noticed, the client savings are much smaller on the published fare example. Since you know that no other competitor will be able to offer them much lower, you can charge about as much as the published fare. However, when it comes to NET fares, you need to make sure not to charge too much. Remember that other agencies may also find similar NETs and choose to make less while offering bigger savings.
Tip from the Pros: Some suppliers also offer special bonuses and incentives, especially on NET fares. For instance, you may be eligible for an additional $50 per NET booking.
Fare Rules Overview
These standard rules pertain to most luxury air tickets that are purchased from a bonafide vendor.
- Pricing is only valid as of the time of quoting. They are subject to change and are dependent on availability at the time of booking. No fare can be guaranteed until a ticket is issued.
- Most tickets are changeable and some are refundable with a fee, depending on the particular airline’s rules and regulations. Usually must be cancelled at least 3 hours prior to travel time.
- Changes must be made by your vendor, and you must follow their standard procedures.
- Name changes are not permitted.
- A change on an airline ticket refers to a change in date of travel or flight numbers. It does not refer to change in a route, destination or airline.
- No shows on flights will lose full value of paid ticket. If you cannot reach your vendor, call the airline to cancel & avoid the no show. Sending an email to your vendor to cancel is usually not sufficient. You should always speak to a rep and get confirmation by email that the cancellation was done.
- When quoted a fare, find out if surcharges and fees are included in the quoted fare, or if you have been quoted a base fare only.
If you are booking straight on the GDS, make sure you understand the fare rules well and communicate them clearly to your client. The last thing you want is an “I said – you said” moment.
If you are booking through a consolidator or host etc, they may typically include these terms together with the quote. Make sure that they are agreeable to you, and that you forward them to your client along with the rest of the info.
Reactive vs Proactive Selling
Reactive selling is when your clients come to you with a travel request. When clients ask you for luxury air tickets, you get them good deals and make a commission in the process. But, you would not be making the most out of the discounts you have access to.
To really capitalize on your selling potential, we highly recommend proactive selling.
With proactive selling, you actively seek out clients through research and anticipating client needs. When a client asks you for economy airfare, you can mention that you have luxury discounts as well. By making them aware of the different options you have, they might be interested in your discounts and end up booking luxury tickets instead. At the very least, even if they don’t book luxury this time, they might keep it in mind for another trip.
Luxury air is especially great to offer to clients seeking:
- FIT (fully independent traveler) itineraries
- River or ocean cruises in Europe and Asia
- Exotic honeymoons
- International land-only tours
- Any transoceanic long haul flights (east, west and south)
Give them your sales pitch: “Your special, once in a lifetime occasion will be made so much better by flying in luxury!”
You can also send out email blasts, social media posts, write newsletters or create events geared towards educating your clients about the benefits of luxury travel. When you actively promote your luxury air discounts to clients, you are not only increasing their awareness about the luxury sector and the services you provide but you are also maximizing your current book of business and expanding your audience.
Here’s a sample of what your advertisement may look like:
Chapter 9 Takeaways…
- Luxury air requests meet these three criteria:
- The flight originates in the USA or Canada
- There is at least one transoceanic leg
- Either business class or first class
- Caribbean, Mexico, Hawaii and Alaska are all domestic
- Get to know the average costs by studying the table
- Don’t mark up too much. Ask your supplier for advice
- Get to know the fares rules
- Sell proactively