The Airline or The Travel Agency?
Owing to so many questions from friends, colleagues and relatives, let us start the year with my comments about this nagging question: “Where do we go to get the best deal, the airline or the travel agency?”
Hmm, did you actually think there is a definitive answer to that question? In your dreams! Let me share a common prank that I use on my friends (but don’t do this at home):
Friend: Where do I get a ticket going to London, the airline or the travel agency?
My answer: Oh, okay, that’s great! (then I hang up)
Next my friend rings again for me to hear a barrage of curses all day long hehehe!
The more exact reply to that question should be: it depends on where you are headed. So let us discuss the options. Here we go:
For domestic travel and not on a packaged tour, go directly to the airline.
It is cheaper. Unless it is very inconvenient for you to go to an airline’s ticket office, avoid dealing with travel agencies if you just need a ticket. These airliners maintain offices at strategic areas in your community or office vicinity anyway. You will find that there is a disadvantage getting “tickets-only” from travel agencies for domestic travel.
A domestic airline ticket in the Philippines can never be cheaper at any travel agency than if you bought it directly from the airline. This is governed by the laws on Philippine domestic travel. Plus, our government requires that airlines and travel agencies write the exact fare on the ticket!
Travel agencies are given a rebate of three percent (yes, just 3%) for selling a domestic flight ticket. That means, if a MNL-KLO ticket costs P2,899.00 as published by the airline, it will also cost P2,899.00 as sold by any travel agency. Upon remitting the proceeds, the airline will pay this travel agency a measly P86.97 for the effort!
Now the catch! Many of your travel agencies will try to get more than just the P86.97 that is due them from the airline. So they will (usually) add on some extra fees that you will NOT see written anywhere on your ticket but on some kind of a receipt. These fees are usually called “ticketing charge” or “ticketing fees”. If you ask the travel agent what that fee is for, they will readily answer “it is the cost for having to write and produce your airline ticket”! I hear this practice is not at all legal but many travel agencies do it anyway.
Thus, if you only need a ticket to go home to see you mom in the province, buy it from the airline.
For domestic packaged tour, go to the travel agency.
This is actually the only way travel agencies earn enough money doing the domestic travel business. The airfare will still be the same as discussed above. But, travel agencies have special rates with hotels, resorts, shipping, car-hire and many such companies.
If the resort’s published room rate is say P2,000 per night, a travel agency can get that at bigger discounts like say P1,000. Then the travel agency will sell the same room to you at say, P1,500. They earn P500 from your room!
Now don’t try to be a smart ass and think you should get that rate from the resort yourself so you save the P500 that the travel agency earned. YOU WILL NOT GET IT! And, we shall cover this thing a few paragraphs down. Hold on for now.
A rented van could cost you P5,000 a day in many of the Philippine destinations and a tour guide will usually charge you anywhere from five hundred to a thousand pesos. Like the hotels and resorts those are “Published Rates” or more aptly “Public Rates” – meaning those are the rates they sell to walk-in guests and publish in their ads. Again the travel agency (not you, ever) can get that on a discounted basis.
We said a “packaged tour” earlier, right? Via simple mathematics, your travel agency will earn those discounts from the hotel/resort, car rental, guide and so many other things that will be “packaged” into your tour. And being packaged tours, your travel agency also earns more via what your economist would call “economies-of-scale”. That only means, the more people there are availing the same packaged tour, the greater the saves and discounts for the travel agency. Why? Because instead of taking a van, they could probably hire a bus to contain all of you – so that becomes cheaper on gas alone than if there were 5 vans to herd you along! Now the resort owners seeing that your travel agency filled their rooms to capacity will be doubly thankful and will also perhaps add more discounts or rebates or freebies – in fact, like giving out free transfer buses! Get the flow?
Now let us go back to the reason why you can’t get those rates that travel agencies enjoy. This is actually a trick of the travel trade. And, mind you, these are not even formal rules or regulations. These are norms or practices in the industry that everyone abides by or they will lose business.
A resort or hotel business gives discounts to travel agencies for bringing in hoards of people to fill their rooms and their restaurants on a regular basis – in fact frequently. Thus, the “preferential” rates. Now you can debate all your life and say that you can also fill the hotel’s capacity to the ceiling because you can bring the whole barangay with you. Fine! But how often can you do that? Let’s face it, only a privileged few (like me :P ) can even afford to travel around the country every month. How much more your whole barangay na ang iba walang pambili ng asin?!
Therefore, use a travel agency when going on a domestic packaged tour. Its cheaper! And don’t envy why even at such discounted rates given to you, they still earn heftily!
So why can’t the airline do what the travel agencies offer?! The simple answer is: they are in the business of flying airplanes and not selling hotel beds or sight-seeing tours. To each his own really!
For International Travel, buy tickets from a travel agency ONLY
Even the airlines themselves will promote that point-of-view! Talking about international travel, you will have to forget anything domestic. This is an entirely different ball game.
International tickets are always cheaper at travel agencies. If you found a travel agency that sells international tickets with the published rates of any airline, think of only two things: either that is a bogus travel agency or people in that travel agency were the only ones present when heavens brought forth the great talent of stupidity!
There are so many terms or practices that you will need to dissect if you really want to learn about how travel agencies are able to give lower rates than what the airlines offer. But if we did that, you and I will become travel agents ourselves and I don’t know with you, but I don’t like the idea!
Anyway, the principle really is nothing different from how we described it with the hotel rates above. An airline ticket can have a published rate of say, USD500. But the same airline who publishes those rates in their fare manuals and websites can actually offer the same ticket at just USD200 to a travel agency. Really? Well, that’s a fact. But it is not just as easy as it looks for the travel agency. There are conditions. At times the travel agency is given such a low fare but it must be able to sell say, 50 tickets in say, a month! Ayan, kinabahan kayo ano?!
And there are problems! Taking the USD500-ticket example, when the airlines do that, they offer these to all travel agencies around. Now, the mad competition ensues. Since Airline A offered the USD200 rate to travel agencies with a published rate of USD500, Travel Agency X will sell those tickets at say USD450. Quite a hefty return right? But Travel Agency Y will offer the same thing at USD300! Obviously, no one will buy from Travel Agency X. Now to complicate things, here comes Travel Agency Z selling the same ticket at just USD250! And so their headaches start!
Oh well, for international travel, rule number one is: buy your tickets from a reputable travel agency and rule number two is: before you buy that ticket, scan your yellow pages and ask each of the reputable travel agencies until you find Travel Agency Z.
Hmm, did you actually think there is a definitive answer to that question? In your dreams! Let me share a common prank that I use on my friends (but don’t do this at home):
Friend: Where do I get a ticket going to London, the airline or the travel agency?
My answer: Oh, okay, that’s great! (then I hang up)
Next my friend rings again for me to hear a barrage of curses all day long hehehe!
The more exact reply to that question should be: it depends on where you are headed. So let us discuss the options. Here we go:
For domestic travel and not on a packaged tour, go directly to the airline.
It is cheaper. Unless it is very inconvenient for you to go to an airline’s ticket office, avoid dealing with travel agencies if you just need a ticket. These airliners maintain offices at strategic areas in your community or office vicinity anyway. You will find that there is a disadvantage getting “tickets-only” from travel agencies for domestic travel.
A domestic airline ticket in the Philippines can never be cheaper at any travel agency than if you bought it directly from the airline. This is governed by the laws on Philippine domestic travel. Plus, our government requires that airlines and travel agencies write the exact fare on the ticket!
Travel agencies are given a rebate of three percent (yes, just 3%) for selling a domestic flight ticket. That means, if a MNL-KLO ticket costs P2,899.00 as published by the airline, it will also cost P2,899.00 as sold by any travel agency. Upon remitting the proceeds, the airline will pay this travel agency a measly P86.97 for the effort!
Now the catch! Many of your travel agencies will try to get more than just the P86.97 that is due them from the airline. So they will (usually) add on some extra fees that you will NOT see written anywhere on your ticket but on some kind of a receipt. These fees are usually called “ticketing charge” or “ticketing fees”. If you ask the travel agent what that fee is for, they will readily answer “it is the cost for having to write and produce your airline ticket”! I hear this practice is not at all legal but many travel agencies do it anyway.
Thus, if you only need a ticket to go home to see you mom in the province, buy it from the airline.
For domestic packaged tour, go to the travel agency.
This is actually the only way travel agencies earn enough money doing the domestic travel business. The airfare will still be the same as discussed above. But, travel agencies have special rates with hotels, resorts, shipping, car-hire and many such companies.
If the resort’s published room rate is say P2,000 per night, a travel agency can get that at bigger discounts like say P1,000. Then the travel agency will sell the same room to you at say, P1,500. They earn P500 from your room!
Now don’t try to be a smart ass and think you should get that rate from the resort yourself so you save the P500 that the travel agency earned. YOU WILL NOT GET IT! And, we shall cover this thing a few paragraphs down. Hold on for now.
A rented van could cost you P5,000 a day in many of the Philippine destinations and a tour guide will usually charge you anywhere from five hundred to a thousand pesos. Like the hotels and resorts those are “Published Rates” or more aptly “Public Rates” – meaning those are the rates they sell to walk-in guests and publish in their ads. Again the travel agency (not you, ever) can get that on a discounted basis.
We said a “packaged tour” earlier, right? Via simple mathematics, your travel agency will earn those discounts from the hotel/resort, car rental, guide and so many other things that will be “packaged” into your tour. And being packaged tours, your travel agency also earns more via what your economist would call “economies-of-scale”. That only means, the more people there are availing the same packaged tour, the greater the saves and discounts for the travel agency. Why? Because instead of taking a van, they could probably hire a bus to contain all of you – so that becomes cheaper on gas alone than if there were 5 vans to herd you along! Now the resort owners seeing that your travel agency filled their rooms to capacity will be doubly thankful and will also perhaps add more discounts or rebates or freebies – in fact, like giving out free transfer buses! Get the flow?
Now let us go back to the reason why you can’t get those rates that travel agencies enjoy. This is actually a trick of the travel trade. And, mind you, these are not even formal rules or regulations. These are norms or practices in the industry that everyone abides by or they will lose business.
A resort or hotel business gives discounts to travel agencies for bringing in hoards of people to fill their rooms and their restaurants on a regular basis – in fact frequently. Thus, the “preferential” rates. Now you can debate all your life and say that you can also fill the hotel’s capacity to the ceiling because you can bring the whole barangay with you. Fine! But how often can you do that? Let’s face it, only a privileged few (like me :P ) can even afford to travel around the country every month. How much more your whole barangay na ang iba walang pambili ng asin?!
Therefore, use a travel agency when going on a domestic packaged tour. Its cheaper! And don’t envy why even at such discounted rates given to you, they still earn heftily!
So why can’t the airline do what the travel agencies offer?! The simple answer is: they are in the business of flying airplanes and not selling hotel beds or sight-seeing tours. To each his own really!
For International Travel, buy tickets from a travel agency ONLY
Even the airlines themselves will promote that point-of-view! Talking about international travel, you will have to forget anything domestic. This is an entirely different ball game.
International tickets are always cheaper at travel agencies. If you found a travel agency that sells international tickets with the published rates of any airline, think of only two things: either that is a bogus travel agency or people in that travel agency were the only ones present when heavens brought forth the great talent of stupidity!
There are so many terms or practices that you will need to dissect if you really want to learn about how travel agencies are able to give lower rates than what the airlines offer. But if we did that, you and I will become travel agents ourselves and I don’t know with you, but I don’t like the idea!
Anyway, the principle really is nothing different from how we described it with the hotel rates above. An airline ticket can have a published rate of say, USD500. But the same airline who publishes those rates in their fare manuals and websites can actually offer the same ticket at just USD200 to a travel agency. Really? Well, that’s a fact. But it is not just as easy as it looks for the travel agency. There are conditions. At times the travel agency is given such a low fare but it must be able to sell say, 50 tickets in say, a month! Ayan, kinabahan kayo ano?!
And there are problems! Taking the USD500-ticket example, when the airlines do that, they offer these to all travel agencies around. Now, the mad competition ensues. Since Airline A offered the USD200 rate to travel agencies with a published rate of USD500, Travel Agency X will sell those tickets at say USD450. Quite a hefty return right? But Travel Agency Y will offer the same thing at USD300! Obviously, no one will buy from Travel Agency X. Now to complicate things, here comes Travel Agency Z selling the same ticket at just USD250! And so their headaches start!
Oh well, for international travel, rule number one is: buy your tickets from a reputable travel agency and rule number two is: before you buy that ticket, scan your yellow pages and ask each of the reputable travel agencies until you find Travel Agency Z.
Enjoy your flight!
05041000
What this person posted is TRUE, but there is one area that is a little off. If you buy a domestic ticket there are travel agencies that sell the ticket at the exact same price as the airline. THIS IS TRUE! However, there are local travel agencies that deliver the ticket to your door for FREE. SAME Price and FREE delivery. What is the benefit? I don’t have to fight Philippines Traffic. Yes, they are strategically placed, but still what a pain. I have tried many agencies and I hate to advertise Travel agencies or anyone but I did use an agency called TravelOnline and all I did was swing by my bank and deposit into there account and the ticket showed up at my door 24 hours after I paid. I thought that was pretty cool! They also said if I wanted I could pick my ticket up at the airlines counter at no charge when I flew SeAir. Ticket less, but I said no. I want my ticket in hand if you have an option to send to my house for FREE. It came FedX. I used other agencies like asia Travel and had to pay surcharge.
ReplyDeleteI don’t like going to the ticket office of airlines. You have to get a number and wait forever just to get your ticket. It’s like waiting at the LTO! Ay Naku! Of course the free delivery was for metro manila only and it was not free too go to a hotel. I think hotel delivery was Php300 which is cool. No line ! PAL, I have to say is the worse place to wait for a ticket. Takes FOREVER! It’s worse that LTO more like PLDT waiting to pay a bill or get a new phone line.
The story is not "a little bit off" since what you found is an exception rather than a norm. That makes pinoytraveler's story indeed on track and truthful! But let us rejoice and tell the world about your find. At least there is one such travel agency! Are you sure travel online sells just airline tickets (without the resorts)? I can't see it on the site but did try to ask them a quotation online (no reply yet).
ReplyDeleteAnyway, as to my experience, yes, i agree with the writer that majority do add a charge for domestic tickets.
And yes, I agree with both of you that it takes forever on a PAL ticket office so I pay the extra charge at little uncrowded travel agencies like those in the malls!