Increase your add-on sales with experts' tips. Emily Ashwell reports
Savvy agents have long known that booking add-ons is a good source of income at a time of squeezed margins, discounting and commission cuts.
Ancillary products can make up as much as 40% of the profit margin on some dynamically packaged holidays, according to Melissa Kane, business development manager at Holiday Taxis.
So are you maximising your earning potential? By assessing the market, analysing whether you are selling as much as you can and upselling products, you could increase your earnings. Here are some tips from the experts.
Size of the market: A decade ago up to 90% of holiday insurance was booked through the trade, according to Rock Insurance managing director Antony Martin. Since then, a big influx of direct competitors means the trade now accounts for only 15%-20%. Martin adds: “Most of the competition is coming from aggregators, such as Moneysupermarket or Confused.”
Who’s booking: According to Martin, agents tend to sell insurance for single trips and the dynamically packaged market. “Agents sell very little annual insurance. However, they have knowledge of where the customer travels and how often, so are often in a better position to sell it.”
Earning potential: The insurance market is worth £600 million per year. Martin says: “The average selling price for Europe for two weeks is £15, but agents can make £4 per person. Although marginal, it can build it up.”
How can agents sell more: “Give clients access to a wide range of products and be competitive. Price-match if necessary,” says Martin.
“The biggest thing that agents can do that aggregators can’t is sell specific products – cruise insurance, for example.Insurance should be offered at all the touchpoints at which the holiday is offered; if you put it in customers’ sight enough times they buy it.”
Size of the market: Angela Day, chief executive of Affordable Car Hire, says there are potential sales in all sectors, but it’s essential to match the right product to the customer and holiday. All-inclusive holidaymakers may go for a shorter duration, and many sun and spade holidaymakers will book. The company rents cars via several operators, including Avis.
Who’s booking: Day says Florida is the most popular destination for car hire this year, but Dalaman in Turkey has been the most-searched destination recently. Day adds: “It depends on the location and the length of the transfers. We have a large percentage of families for sun and spade destinations, the Americas and long-haul. They like the convenience.”
Earning potential: Agents can earn up to 15% commission on Affordable Car Hire bookings. A typical booking value is around £300 for a four-door compact car over a 10-day period.
How can agents sell more: Day says: “If they have got the client in front of them, say they’ve got good rates. We work mostly with trade and affiliate partnerships and trade clients have a better offering than consumers.”
AIRPORT HOTELS and PARKING
Size of the market: Andrea Clayton, head of travel trade partnerships at Holiday Extras, says: “There are 32 million outbound trips per year. To us that’s the size of the market. Somebody has the opportunity to ask the customer how they are getting to and from the airports. The fact we have three million direct customers, is three million missed opportunities from agents. It’s a simple customer service question.”
Who’s booking: Clayton says customers who have to be at any of the main London airports before 10am are ideal candidates to be offered an airport hotel for the night before.
Earning potential: “We pay 15% typically on hotel bookings and 11% on parking bookings,” says Clayton. “The average value would be £65 for parking, a hotel would be £95, but more when you add meals.”
How can agents sell more: Airport hotels have family rooms and a selling point is that booking one helps start the holiday early. Find out about any breakfast or dinner offers. Also, take advantage of any products offered by operators, such as Virgin Holidays’ Check In Chill Out. Don’t forget hotels on the return leg of the trip. Clayton adds: “Offer hotels and parking again in pre-departure emails or when the balance is paid.”
Size of the market: Melissa Kane, business development manager at Holiday Taxis, says: “Three-quarters of business is for shuttles, 25% for private taxis. For dynamic packages, we would expect an uptake of 80% or more. The most important thing is for agents to offer all possibilities.”
Who’s booking: The core is the Mediterranean market. Where agents are selling tour operator packages, there’s the opportunity to upsell to a taxi transfer.
Earning potential: Kane says: “We give net rates to agents, so they do their own mark-up. Typically you would be looking at 15% minimum commission. Agents in not such a price driven market could mark up by 20%-25%.”
How can agents sell more: As transfers are seen as part of the package, Kane says: “It’s the norm now to include it in the initial sales process.”
Shuttles cost less, but selling points for private transfers are no stops at other hotels and, if pre-booked, child seats. On arrival clients have a designated driver waiting, and don’t have to worry about price haggling or tipping.
Size of the market: Tony Seaman, sales and marketing director at Attraction World, says: “What we sell is what people do on holiday. The only people who might not book are all-inclusive customers who won’t leave the resort or people who just want to sit on a beach.”
Who’s booking: According to Seaman, the biggest booking group through agents is families and the best-selling product is theme park attractions. However, he adds: “You also have empty-nesters and people who don’t have children yet, they might do a city tour.”
Earning potential: “Agents on minimum commission would find it difficult not to earn about £200 for theme park tickets in commission for a family of four going to Florida. Elsewhere, agents could easily earn £50 selling a family of four a couple of activities,” says Seaman.
How can agents sell more: “If someone doesn’t want it, they won’t book, but if you don’t ask you don’t get,” Seaman adds. Selling points include advance booking and budgeting and e-tickets that don’t get lost or need to be queued for. Plus, customers don’t waste time in resort finding out what to do.
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