When I decided to start Las Tres Marias, I knew I wanted to use consulting fees and not base my business on commission earnings. A fee-based model benefits clients and supports the type and quality of work I want to produce.
There are two significant benefits to clients from this business model —
- The fee model supports detailed and time-consuming research for non-commission producing activities;
- The fee model allows for total transparency and ensures no conflicts of interest
Because of this, I like to call myself a travel fiduciary.
What does this this mean? And how does the fee model benefit clients as outlined above? To explain this, I think it’s helpful to keep in mind the travel agent model.
Traditional Travel Agents
Traditionally, travel agents earned commissions from the provider when they booked for clients. This used to come from mostly from fees that airlines would pay travel agents when they booked flights for their clients. It may be hard to remember, but there was a time before the internet when the only way to book a flight was to through a travel agency. Crazy, I know!
The internet changed this completely. Even if you hire a travel agent to research or book your flight, the ability of any consumer to see flight prices and comparisons across airlines and dates easily and quickly changes everything.
Travel Agent Model Today
There are many different ways travel agents today earn money through commissions and it varies widely depending on the target audience, like corporate or leisure travel, for example. Agents may still make a booking commission from certain providers, like some hotels or cruises. Many travel agents roll their own commissions into a travel package. They may mark up the final package a certain percentage, maybe 15-20%, or have different percentage mark ups for different booking services, like hotels, rental cars, or guided tours. Their time is logically driven by what produces commissions. If they didn’t focus on commission-producing items, they wouldn’t be able to say in business.
Las Tres Marias Travel Fiduciary Model
I want to spend the majority of my time creating products of value for clients in the form of highly individualized and meticulously researched and planned trips to Spain.
I want to be able to do extensive research based on clients’ interests and focus on items that don’t produce commissions, like restaurant research, creating self-guided driving tours, and supporting logistical details like getting from point A to point B efficiently throughout clients’ trips.
I also value transparency highly and wanted to make sure that clients had all the information available, not just a price for an opaque final package. This means being transparent about my fees and the value of every service I recommend and we discuss.
The consulting fees that Las Tres Marias uses allow me to spend time on the detailed and time intensive research I mentioned above. If a client is interested in a self-guided walking tour of Barcelona with a focus on vintage stores and local bars, for example, I can spend the time necessary to produce this. It does not matter to me that there is no ability to earn a commission from this sort of activity because my fees are entirely independent of clients’ activities.
This also means that it is not in my best interest to recommend services or activities that produce higher commission. It’s all the same to me because my fees are independent of a client’s itinerary. What matters to me is creating an incredibly detailed, thoroughly researched trip plan and itinerary that is customized to your interests needs.