New Year Leads to New Travel Cover and Changes From the FSA

The last year saw major catastrophes, occurring in the travelling industry. Several airlines closed down, tens of thousands of travellers were left stranded overseas as a result, and travel agents were found to be using “misleading sales tactics” to sell holiday goers with their travel policies.

As of January 2009, travel agents will need to be regulated by the Financial Services Authority (FSA) or become Introducers or Representatives of an FSA-regulated company in order to sell travel insurance.

Misleading advice
The travel insurance provider, Sainsbury’s has welcomed the change in the law, and also warned that several people are still at present falling victim to underhand and misleading sales tactics used by some unscrupulous travel agents to ensure that their policies are purchased. This has resulted in thousands of people wrongly being sold travel insurance by travel agents every year.

The insurance provider also revealed that five per cent of travellers, who claim to have bought insurance from travel agents in the past 12 months, – as many as 407,000 people – were wrongly told that they could not book their holiday, unless they also took out the cover being offered by their agents at the time.

Sam Marrs, Sainsbury’s Travel Insurance Manager said: “This is an alarming finding, but it will be much more difficult for rogue travel agents to do this once they are regulated by the FSA. Our research shows that up to as many as 8.14 million people could have bought insurance from travel agents over the past 12 months and the new regulation will provide consumers with valuable much needed protection.”

Moreover Sainsbury’s Travel Insurance’s research also reveals that travel insurance policies sold through travel agents could potentially leave thousands of people with inadequate cover. Some 16 per cent of those who have purchased travel cover from travel agents this year claim they were not asked about any pre-existing medical conditions, slightly down from 17 per cent last year. However the problem of travel agents failing to outline what insurance does and does not cover has become worse, affecting 17 per cent of customers purchasing cover from travel agents in the past 12 months, up from 13 per cent last year”.

Rescue plan from Saga
In the light of all the disruption and distress that failed airlines cause to travellers, the travel insurance provider, Saga Insurance, which specialises in insurance policies for older people; has introduced a new policy that provides cover in the event of an airline failure.

A large and increasing number of older people travel independently. Saga Travel Insurance has stated that it has protected around 2 million holidays, since its inception and the breadth of cover has developed over the years in response to holiday trends and customer feedback. It was following such feedback from our intrepid over 50s customers that Saga Travel Insurance has introduced extra protection covering scheduled airline failure.

In the event of the scheduled airline that the traveller is flying with goes into administration, the new cover provides up to £1,500 for each insured person, for the costs of flights paid in advance, or the cost of return flights to the UK.

This cover comes into effect for new Single Trip and Annual policies purchased from the 2nd January 2009, and on Annual Travel renewals from the 25th January 2009.

Paul Green, the Head of Communications at Saga Group said: “In today’s uncertain economic climate the savvy independent traveller needs to check if their insurance covers airline failure if they want to travel with confidence in 2009.”

Why Is It Advantageous to Use a Travel Agent When You Can Book Your Travel Needs Online At Anytime?

It’s easy and simple. It all comes down to “service”. Do you know that most of the tour companies, cruise lines, hotels and car rentals agencies have a buildup fee, that is included in the overall price that you’re paying, even if you deal with them directly. However, there is no benefit to you, the end-user. I mean service wise. When everything works out smoothly with your travel arrangements it might be fine. But, when matters don’t work out in your favor that’s when you will be remiss that you didn’t have a personal travel agent attending to your needs. You will be calling and calling with not much success in terms of immediate resolution. This is, of course, one of the primary reasons. However, there are many other reasons. I would like to discuss with you four other reasons that have also been mentioned in the past by ASTA Travel Sense. Please consider the following:

1. Save you money- Agents have their resources as well as special relationships with suppliers. As a result, they are able to obtain extras, for example, on-board ship credits, free upgrades and other amenities that you cannot obtain on your own. All this creates a better overall value package.

2. Save you time- After all, time is your most valuable asset. It can take several hours of your valuable time surfing the internet, where there will be lots of choices. Afterwards, you will need to make sense of it all. Unfortunately, most of the time you will make choices based on price not value. An experienced travel agent is your expert that will guide you through the process, even if it is as basic as purchasing an airline ticket. It always pays to utilize an expert. An experienced travel agent will save you time and a headache in the long run.

3. Convenience- Agents can offer one stop shopping for all travel arrangements, including choice of the right travel insurance. An experienced travel agent will help you address what documentation you need for international flights and where to get it. That individual will simplify the entire travel process by helping you make the right choices in order for you to get the best return on your investment.

4. Solve problems- Agents can keep on top of issues like lost luggage and delays. Because of their ties to the industry, they can typically talk to airline customer service representatives more effectively than you can – they do it all the time. If you’re grounded due to poor weather or some other reason, your travel agent might very well expedite your travel. And as Forbes says: “when your flight is cancelled and you are standing in line waiting to re-book, believe me, you’ll wish you had a travel agent.” A good travel agent is always willing to go the extra mile, and will do everything to meet your travel needs. As the president Obama said, “we need Travel Agents”.

How Can Travel Agents Help You Plan Your Vacation

There are numerous advantages of planning your vacation with the help of a travel agent. Travel agents, or travel consultants have experience not only about the location, but know the important things that one should take care of when traveling to a certain destination. With their expertise and experience, you can obtain access to free travel tips like airline tips, hotel tips, how you can save money on airfare, insurance tips, international traveling tips, budget location tips, and so much more. The travel consultants have links, contacts, and the resources required to plan a holiday within an individual’s budget and provide you the help you need in case of an emergency. They can provide you with the right airline traveling tips and different packages that are within your budget. Many travel agents offer the package that has everything from toll taxes to airfare. You should consider using the following travel tips in order to find the best travel agent.

Airline Traveling Tips

When a travel consultant is helping you organize a trip, then you should keep in mind that you can obtain tickets on a discounted price from numerous airlines. These travel consultants have links with airlines and can help you get a discount on the purchase of tickets.

Hotel Traveling Tips

If you would like to avoid having to face any last minute issues, then you should ask your travel agent to book your hotels in advance. Book hotels at all the places that you are going to visit so you have a place to go to when you get there. Also, it would be wise to book a hotel ahead of time because hotels charge a lot of money when they see a traveler who is desperate for a room.

Tips for Senior Citizens

Travel agents can help you organize a group tour for different vocational and age groups. Group tours are cheaper and safer, especially if you are a traveling senior. The advantage of group tours is that you will not feel alone on the trip. You will make great friends throughout the trip. Travel agents fix a schedule for group tours, so a number of destinations are covered up easily and within your budget.

Historical Visits

Travel agents can employ a guide for the travelers to explain different historical monuments of a destination to the tourists. Your visit will be made memorable if you leave the country knowing about its past heritage visiting monuments around the destination. The best part is that you do not have to pay for the guide all by yourself because the cost is spread over the entire group!

Travel Agents – Are You Being Ripped Off?

Right up there with real estate agents and used car sales people, travel agents are subject to much suspicion when it comes to sales tactics and prices. But are you really being sized up and ripped off every time you walk into an agency or book a holiday?

The answer is yes, you will be sized up and yes, given half the chance many agents will overcharge, some by as much as they can get away with.

With the great resources available on the net most travellers will not walk into an agency until they feel they have a good handle on their destination and current prices. Yet no matter how savvy you are it’s still worth knowing how agents work before you decide to use one.

There are two aspects to the way agents work in Australia that affect the service you are given. The first is the way agents are paid. Second is the pushing of particular agency ‘preferred’ products like tours (with high commission levels) onto the customer without disclosing this conflict of interest.

No real newsflash here: agents are paid on commission. But people might not realise that base pay rates are so low, agents need every dollar they can squeeze out of you. The pay structure generally works like this:

* The agent is paid a base amount, which is a paltry sum at best. The base amount is fairly consistent amongst the major agencies, and will go up slightly the longer the agent stays in the job.

* Extra income is based on commission paid against the revenue agents bring in. Different levels of revenue are made from every product they sell, from very little (say a hotel transfer) to up to 50% revenue for travel insurance. ‘Preferred products’ such as tours or flights will have higher levels of revenue.

* Of this total revenue, agents are paid a monthly percentage, usually on a sliding scale (the more the agents bring in the higher the percentage they get). This pay scale will depend on the agency and some are more generous than others. Without this commission the base amount is barely enough to live on (we are talking burger flipping rates).

* There is massive pressure on agents to hit monthly revenue targets (aside from actually making a living), and thus the job has a very high turnover rate (1-2 years is a fair stint as a travel agent or even store manager).

* But what about the perks? Agents fly all the time right? In short there is no particular savings on flights at present. Some agencies are better than others but the perks of the job are almost non-existent compared to how it used to be. Agents are not always travelling and when they do it’s not as cheap as people think. For that you need a job, or your dad or mum needs a job, with Qantas.

* Some companies overseas pay differently so the focus is on customer service rather than sales. We are not so lucky.

The fact that the job is commission based seems to be missed by many customers who think agents are free to give advice all day as that’s what they get paid for. The reality is that they make very little unless they actually sell you something; it’s a sales job pure and simple.

This pressure on agents can lead to some very dubious practice.

So what could be loosely defined as a situation where somebody is being ripped off? There’s a big difference between paying extra for the agents time and them overcharging you by hundreds, or even thousands, on your holiday.

Standard booking fees at most agencies are $50.00 – $100.00, depending on the product being sold (less for domestic travel). These fees can be waived at some agencies rather than losing a sale if you are price matching or bargaining hard with the agent.

These fees are not a huge price to pay for what might be hours of the agents time (and remember the agent only gets a small percentage of that fee – most goes to the agency), but if you are paying any more than the standard fees, you are paying too much.

The most likely chance you have of being ripped off is if you have failed to shop around, and get caught up in the agent’s enthusiastic sales tactics (always beware the most upbeat and enthusiastic agent).

Agents will size up how much you know about your destination, the current price of flights and accommodation before quoting you a price. If you tell the agent “it’s my first time away” your chances of paying way too much increase dramatically.

Travelling to an out of the way destination might fall into this category as well, or when navigating the maze of round the world tickets. While it’s easy enough to book RTW trips on the net many people still stick with an agent, and leave themselves vulnerable to overcharging in the process.

Also, and unfortunately so, times of grief or any urgent need to get yourself on a flight are also seen by many agents as a time to cash in on vulnerable customers.

In terms of flights, agents will usually have minimum or net rates that they are free to add whatever extra they can get away with. This is where you can be overcharged if you haven’t shopped around. There is only a minimum, not a standard or maximum price for flights.

Consider as well that some agents are better than others at finding cheap flights. A high quote might just be a lack of knowledge of the destination/airlines. Many agents will have spent less than a year in the job and it can take time to learn how to get the better deals for customers, especially on out of the way routes. Another reason to check online first.

Yet another area in which to be careful is with refunds. It is not uncommon for some angents to overcharge you to cancel flights or tours. This can be done simply by the agent changing the terms of the agreement between you and the agency when you first pay a deposit or in full (as you have no direct contact with the airline). So what might have been a $350.00 cancellation fee on flights can be easily be turned into a non refundable ticket without the knowledge of the airline or tour company. Importantly this is not a standard practice (some agancies have measures in place to stop this) but it does happen. Be really careful and check elsewhere before you commit to a non refundable airfare!

The second and perhaps most dodgy aspect of travel agency practice is the pushing of preferred products onto customers.

This is not technically a rip off, but if you’re after unbiased product advice steer clear of most travel agents. The major agencies will have certain tour companies and even airlines from which they will get higher commissions (which can be double that of other tour companies they might sell).

So you’re booking a tour in South America and want some advice on a tour company? Chances are you will be pushed into using the agencies preferred supplier as they make more money out of you that way. As yet there is no legal requirement for agencies to declare this conflict of interest. Just look around the shelves of the major agencies and it will be clear from the uniform brochures who their preferred suppliers are.

This is not to say these companies are not a decent choice, just be aware any advice is not without considerable bias. You need to make sure the tour company suits your needs and don’t rely solely on an agent’s advice on this (contact the company direct if you have any queries).

This conflict of interest can be applied to many products they sell. The major agencies will have preferred hotels and car hire companies. For almost every product travel agent dirty tricks, travel agent rip offs, travel advice, travel tips there will be a preference they give you that makes them more money. Agents will themselves often have little goals in mind when selling you a holiday.

There are always incentives from different travel companies for agents to sell their product. The incentive might be ‘sell five tours get one free’ or something similar. This is another reason agents can give you highly biased advice.

Smaller more independent agencies are more likely to give you unbiased advice as they may not have the same deals with tour operators as the major players.

If you are unsure about the charges attached to any products, simply ask what exactly you are being charged for as agents should disclose any booking fees involved (sometimes these fees can be hidden). If you are suspicious don’t fall for any pressure tactics, just walk away and check another agency or online before you book (there’s always another agency close enough).

So the bottom line really is just to make yourself as aware as possible of current pricing before you see an agent. You can still get great deals through a good agent (booking online is not always cheaper) and there is no need to be ripped off if you are savvy about your planning. Advice from a good agent on your destination can be invaluable, just take product advice with a grain of salt.

I left the job in part due to the pressure to overcharge and BS on which company customers should travel with. Most people get into the job because they love to travel, but may end up finding, like I did, that the job is not worth the stress.