What is ‘Luxury Air’?
As explained at the end of Chapter 6, travel agents rely on more than just airline commissions to stay in business.
Part 2 will explore the nuances of the growing luxury air niche. Even experienced agents that already know the material in Part 1 will learn important pointers specific to luxury air in Part 2.
You’ve been reading the term ‘luxury air’ throughout this manual. Now let’s explain exactly what we do mean – and don’t mean – by it.
Before we even begin, it’s important to point out that we are addressing agents based in the United States or Canada. Luxury air booking in other parts of the world may work a bit differently.
Three prerequisites for Luxury Air:
- For starters, the term ‘luxury air’ refers to higher end cabin seats on commercial jetliners. It doesn’t refer to private jets.
- It only includes international destinations. This means it originates in the United States or Canada, and includes at least one trans-oceanic leg. Domestic destinations, including Hawaii and the Caribbean, do not qualify. (Even a ‘first class’ seat on a domestic flight is light years away from a first class seat on an international flight. More on that later.)
- Lastly, we are only talking about premium seats – not regular ‘crammed in like sardines’ economy seats. Premium seats include business class, first class, and a new breed called ‘premium economy’ (more on that later).
In summary: For the purposes of this training, luxury air refers to premium seats on international flights on commercial jets, and we’re talking about agents based in the USA.
Why Is It Different?
Bigger expectations = Bigger responsibility
People who purchase ‘luxury air’ expect to be treated with royalty. They are paying a premium, and are definitely entitled to it. The challenge is in delivering that level of service. An agency that chooses to offer cut-rate fares will no doubt need to sacrifice on service.
Consider this: Say you only earn $50 on a ticket. If your client uses up $50 of your resources to get the sale, then you haven’t made a profit.
Agencies that sell luxury air need to understand that their clients have bigger expectations, and along with those expectations come bigger responsibilities: Clients expect to pay more, and you have a responsibility to make sure they get white glove service.
To illustrate this point: Imagine that a flight was cancelled and now your client will miss their connecting flight. The last thing a client who paid thousands of dollars wants to hear is “Sorry, it’s not my fault. It’s the airline. Call them.”
Luxury clients expect to have a direct relationship with their agent, and know that when they call, they get the red carpet rolled out for them.
Most importantly, you must also learn the nuances for such things as seat classes, cabin types, meal types, and ticketing rules. They are different in the luxury air world. Make sure you pay special attention to the details in Chapters 8 and 9.
The good news is that you don’t need to run out today and create a new cutting edge ‘luxury’ department. By partnering with a good air provider or consolidator you can gain instant access to their infrastructure. Their services can even be white-labeled to a point, so that your clients will in most cases not even know that a third party is involved. Even if you belong to a host agency or consortium that is not optimized to handle luxury bookings, you may still be able to use these third-party services.
Your Bottom Line
Let’s be up front here; aside for wanting to make a difference in your clients’ lives, you’re in it for the money. (If you happen to be from another planet and aren’t interested in the big bucks, then by all means, skip this section…)
Simply put, premium seats on international flights cost much more than domestic or economy. And by applying NET fares, the profit margin gets even wider.
So what are the markups, commissions and earning potential of selling luxury air? To give you a rough estimate, we’re talking $100-$500 markups instead of the standard $20-$50 markups on domestic/economy. (Aside for the markups, you will also be passing on significant savings to your clients. More on that in chapter 9)
Whenever there are NET fares available, you will be able to mark up higher, and when there are only published fares the markup will be on the lower end.
So what are the odds? How often are there NETs available?
Good question. The answer depends on the particular destination, and which consolidator you work with. To give you a very rough ballpark idea, you should be able to find NET fares about 40% of the time.
There’s also one other element that makes luxury air so lucrative: Luxury travelers travel often. Once you get a client to love you, they will bring you repeat business again and again throughout the year. Plus they will also be your ambassadors and introduce you to their friends as well.
Are You Really Better Than an OTA or an Airline’s Website?
This is a question that every travel agent asks themselves, and you might even think it’s a good one: With all the beautiful online travel agencies and airline websites out there, what is the need for an old school human agent? Their search engines offer instant results with an insane amount of options. And, you would imagine, they’re obviously the lowest price.
Well as you’ve learned so far, when it comes to domestic and economy you would be pretty much on target.
However, when it comes to luxury, there are two very important things that make you the agent more important than ever.
- OTAs are not cheaper: Even if a client books directly on a website or OTA, they still pay the ‘travel agent’ commissions. This is because they build it into their price. Just because there is technically no ‘agent’, they still mark it up and pocket the extra profit. So, clients are really not getting a ‘better deal’ by doing it themselves.
- You offer better options: The human touch that an agent can provide cannot be matched by an OTA. Travel agents have so much more to offer than booking online, because you save your clients a considerable amount of time and money. When it comes to economy, a seat is pretty much a seat – with little variation from airline to airline. It’s completely different with luxury air. Each airline has its own standards, and sometimes even the same airline will have variances in amenities on different aircraft. Travelers can easily end up purchasing the wrong options.
In 2017, American travelers spent 8.7 billion minutes on travel sites (Expedia’s 2017 “The American Traveler’s Path to Purchase”). That is a lot of time and effort that could be delegated to an expert who knows how to get clients the best bang for their buck.
Since we’re on the topic of the big bucks, OTAs promise consumers that they’ll find them the best deals, but their inventory is extremely limited. Remember: no NET fares… This mean they aren’t offering their clients the wide range of possibilities that a savvy travel agent can.
On top of that, with the boom of OTAs, vendors have cut deals with OTAs to make sure that prices are on par with those you would find on the brand site. At the end of the day, the vendors set the prices, not the OTAs, which means you aren’t going to find any earth-shattering deals on OTAs. They can only offer published fares, which are much higher than those available through a travel agent.
Let’s not forget the hidden fees and taxes that magically pop up at the checkout, which would never happen with a travel agent who is transparent about the exact costs.
And, lastly, travel agents can also provide a personal touch that cannot be replicated by a search engine.
Beware the ‘Miles’ Trap
Let’s face it; tickets purchased with miles are often the cheapest option, and luxury air is no different. No matter how great of a deal you offer, clients will sometimes come back to you with a cheaper ‘miles’ ticket they found advertised elsewhere.
Tip from the Pros: To explain how it works, there are ‘miles brokers’ who purchase people’s unwanted miles, and then use them to purchase airfare for their clients. For those that know how to game the system, they can often find very cheap fares.
Even if it doesn’t explicitly say ‘miles ticket’, there are signs that will tip you off that it is. If it’s an advertised price that’s cheaper than any published fare, you can be sure it’s a miles flight.
Although you can’t compete on price, you’re definitely not out of the game. This is because to be fair, they are not comparing apples to apples.
First of all, it’s a gray market. According to wisebread.com: “Buying and selling through a broker violates the policy of most airlines, but it’s not illegal (except in the state of Utah). However, if you’re caught, the airline may confiscate your ticket, cancel your reservation, and wipe out the accumulated miles in your (and the seller’s) frequent flyer account.” Most clients wish to purchase their airfare legitimately. And especially when it comes to corporate travel, the only time a corporation will use points is when they are redeeming their own.
Secondly, there are huge drawbacks to purchasing a flight with miles. Keep in mind that no mileage is earned on these flights, and that’s something that most passengers do not want to sacrifice. More importantly, the airline will never treat these tickets with the same delicate care as a regular ticket. They are the first to get bumped or downgraded. There are countless horror stories told by travelers who saved a few dollars only to end up with a ruined trip.
Airport Lounges Included!
Premium bookings come with many perks that will be elaborated upon in chapter 8 – such as lay-flat seats that convert to full beds and 5-star gourmet meals.
Besides the actual onboard amenities, there are a few additional perks that are included with most international business and first class fares:
- Airport lounge access at all points of departure
- Priority check in
- Extra luggage allowance
- Mileage status
Ask the airline or your supplier for the details each time you book.
Chapter 7 Takeaways…
- Luxury air refers to premium seats on international flights on commercial jets
- Luxury clients expect to have the red carpet rolled out for them
- Partnering with a good air provider or consolidator may give instant access to their infrastructure
- The markup is much higher – especially on NET fares
- You can offer the same prices, and better service than OTAs or the airline’s site
- You can’t compete with miles brokers on price, but your value is much more than theirs
- Business and first class also get lounge access, priority check in, extra luggage, and mileage status