THE TRAVEL INDUSTRY’S BIGGEST DIRTY ‘LITTLE’ SECRET

Every time you book a hotel, book a cruise or any travel tour,  on the supplier’s 800 number, you are considered to have made a “direct” booking. No travel advisor/agent/consultant was involved in the transaction. You did it yourself.  So how/why are they charging you the built-in travel agent commission anyway? Since they are not paying any travel agent, these hotels, cruise lines, and tour operators get to pocket the extra cash you have paid them. They simply take out the travel agent commission and add it to the profit they have already created in their pricing – doubling their profit!

But wait – is this legal? In some states, it is likely illegal, a violation of state consumer protection laws. You cannot be charged for services you neither requested or received. If no agent was involved, how can you be charged as much as 15% of the total cost to pay an agent commission when you’re the “agent”?

No one in the travel industry talks about this. Travel writers who work for publications heavily dependent on travel industry advertising dollars never mention it. This is the travel industry’s big “dirty little secret” worth many billions in additional annual revenue. 

Sure you are entitled to get the money back -but since you’ve never asked ………..

Here is a summary of how it works in each of the major industry sectors:

Airlines stopped paying commissions to travel agents many years ago. Most agents survive by charging fees to process airline tickets. Pursuing a commission refund with the airlines would be both inappropriate and a waste of your time. 

Rental car firms have intricate contractual arrangements with travel providers and often commissions are not included. Again, many agents simply tack on fees for this type of transaction. Again, likely a waste of your time.

Hotels are a different story. All hotel pricing includes a travel agent commission of from 8-10%. If you are not using a travel agent, you should be entitled to a refund of the agent commission. Savvy guests always request a return of the agent commission at check-out. Do note however that refund on a direct booking will be lower for a hotel booking than it would be for the cruise or escorted tour refund which can run as high as 17%.

Cruise lines and tour firms follow the same general policies. They always include the travel agent commission in the price charged to those who book direct. That commission will normally range from 12-17%. These are funds, theoretically,  set aside for payment to travel agents for the services they provide.

All direct booking pricing always includes the travel agent commission. When you do not use a travel agent, common sense would dictate that you are entitled to have the commission taken off your invoice.

In States with strong consumer protection laws like California, New York, and Massachusetts, for instance, it is our opinion that retaining the travel agent commission when none was used, is likely a violation of consumer rights provisions in the law. But, to our knowledge, no one has ever questioned this practice legally.

That may change as consumers and the consumer press starts revealing this major industry secret and rather extensive consumer rip-off.