How to get the biggest bang for your buck
- Chasing cheap deal ghosts
- How is travel priced?
- How and why do prices vary?
- What do I need to know?
- What's the real value of a travel agent?
- How to get the biggest bang for your buck
- Be realistic and don't ask for discounts
Published by Simon Mustoe
Webjet's latest advert (in case you haven't seen it) portrays travel agents as a bad deal. It's a bit rich considering Webjet sells packages on its own website and is in fact, yes you've guessed it, a travel agent!
Since about 2005, the internet has changed the way most industries work and travel is no different. Believe it or not, there are only three or four big wholesalers that monopolise most of the inbound and outbound travel market in Australia.
CHASING CHEAP DEAL GHOSTS
Like every industry, big-business margins are being gradually squeezed our, by the emergence of lots of small companies through the fog of hyperspace. The result is a gradual race to the bottom on price and value coupled with a breakdown of business relationships ... between, for example, online behemoths like Webjet and travel agents.
We're increasingly brainwashed into thinking that we can find better (and cheaper) products online. We're told that booking early or ourselves, is the way to get the best deal possible.
How many hours have you wasted going round and around in circles online, chasing ghosts? How often do you see something like 'return fare to Los Angeles just $300' ... to find this only applies to 10 tickets, that were sold earlier that day, only on seats travelling via Buenos Aires, departing at 3am on a Wednesday morning outside normal holiday times?
If a deal looks that good, the chances are, it's too good to be true.
So how do we get the biggest bang for a our buck?
HOW IS TRAVEL PRICED?
To start with, it’s useful to understand how travel products are priced, so here we will give you a glimpse into behind the untruths to discover how it all works.
When we price a package for you, we start by adding together a daily itinerary of accommodation, food, transport, guides and activities.
The businesses that own these components usually cost them at a standard rate and they pay a little bit to us so we can deliver the experience to you - you can’t get this discount, because you are a customer (in the same way as you can’t get those rates knocked off the food you buy at the supermarket). That's how we make our money.
So the first thing to note is, that pretty much all the standard components (accommodation, transport etc) are sold to everyone at the same price. It should come as no surprise, that there isn't a huge variation in price on trips of a similar nature.
HOW AND WHY DO PRICES VARY?
As a customer, you should be looking at the quality of the offering:
- guide expertise;
- quality of service; and
- what the tour promises to deliver.
This varies enormously from tour to tour and it affects the price.
In our view, there are only two legitimate ways to substantially reduce the cost of trips:
- Use lower-priced service (accommodation, food, transport and guides)
- Increase the number of people on your tour.
You'll also find a lot of companies excluding significant components of a tour in the effort to appear inexpensive.Budget airlines do this. The fare may appear good but it increases by the time you add a seat, buy baggage allowance etc. Again, if a price looks too good to be true, the chances are it is. Check the exclusions and factor these in by asking your travel agent for advice.
WHAT DO I NEED TO KNOW?
It all comes down to knowing what you want and asking the right questions.
Are you looking for a small group tour? What’s your indicative budget? Do you have a particular area of interest? Are you confident to drive yourself?
These are all questions we ask you when you call us. If you're booking online and no-one has asked you these questions, can you be sure you're getting what you need?
This is where a travel agent is particularly important.
There is an almost infinite way to diversify products, despite the limited components, and every customer is different, so our time is spent matching your requirements to the tour that best suits you, or tailoring it to your needs.
To be fair, there are very good inexpensive organised group tours out there too.Budget is always a consideration and when we have clients on a tight budget looking for something less specialist, we refer them to our preferred travel agent who knows the product specifically. They can point them to the best and most highly recommended tour on the market. This is one of the key benefits of an agent - a good agent will either attend, or have colleagues who have attended, trade familiarisations so they can give personal knowledge and assurances.
WHAT'S THE REAL VALUE OF A TRAVEL AGENT?
Travel agents are experts. They are trained to spot the weaknesses in deals and resolve them. If they're good, they will get to know what you need and will help you find just the right trip for you.
We can assure you, you’ve no reason not to use the services of an agent. At the most it may cost you a tiny fraction more but it evens out.
A proportion of clients come to us after having booked online and sometimes we can’t retrofit experiences. We had a group enquire about Kakadu recently who had booked cheap accommodation and this meant they couldn’t do the tour we recommended - they didn't realise it takes 4 hours to get there from Darwin and would have ended up spending far more time in a car than having the experience!
Incidentally, travel agents make next to nothing on your flights but they happily provide this as part of the service and can also match almost any price you can find on the web.
So don’t believe online companies when they say you should book through them to save money on flights. It’s a lie. It’s also not necessarily better to book early. The flight you need may not be the cheapest … or even the right connection for a tour (that you may not have booked yet). If you’re booking an ‘experience’ this should be a holistic process, or else it can jeopardise various elements and lead to a worse outcome.
HOW TO GET THE BIGGEST BANG FOR YOUR BUCK
The biggest recommendation we can make is to give your travel consultant plenty of time to work out what you need.
Don’t throw your hands in the air when the first option isn’t perfect - it takes time to understand what you want. Also be prepared for the possibility that what you want, can’t be done.
You can’t, for example, expect to pay $250 a day for a couple to be fully escorted with vehicle and guide, accommodated and fed. We had an enquiry about cycling and whale sharks in WA - but this is mid-winter and the destination and season for cycling is wet and cold and there are no operators. We had to say so.
There are plenty of tours that offer trips that you won't be happy with and perhaps only one or two that would be perfect for you. There's always an element of risk but that can be managed by taking advice. If you want trips at the budget end, we know the operators we trust.
But we also know the risks and complications that can arise if you don’t fully understand what you’re buying, as well as the travel and flight connections, insurance needs and other factors that you need to know.
BE REALISTIC AND DON'T ASK FOR DISCOUNTS
Travel products are priced on very slim margins - a few percent in many cases. So you shouldn’t ask for discounts, as they are rarely there. If you can’t afford a trip that's listed, ask about alternatives at a lower price, or to look at variations to reduce the cost.
The other option is to save a up a bit more.
If you accept agents are not out to screw you on price, it’s more important to make sure you’re getting what you want, and if you can’t afford it, either alter your criteria or leave it a bit longer to find the money.
The price put on a trip is effectively what it costs, plus a small margin, sufficient to deliver it to you with the right professional assurances.