Weekend is coming, and it’s a great time to dream of that getaway. I like to tell long stories, so you’ll have to bear with me here 🙂 But hey, by Singaporean, for Singaporeans! You’ve got to admit that such stuff in local context are harder to come by.
Travel Agents and Maldives
Even with the proliferation of the internet, travel agents remain an integral part of Maldivian tourism. It’s all about the distribution channels, and it is a critical one. To the best of my knowledge, travel agents have established agreements with resorts that allows them access to room inventories at hugely discounted rates. These special rates are solely available via agents.
It might be difficult to believe, but resorts themselves either can’t (company policy) or are unwilling to offer you such rates – even if you offer to bypass the agents who are the middlemen and would therefore take a cut. What the .. Huh?
Of course, they do maintain room inventories for sale via their official websites as well as online travel agents (OTAs) for folks who are clueless, though.
One reason for such a phenomenon is that Maldives is quite an unusual case study. You see, people don’t typically go to Expedia or Agoda to book a resort stay in Maldives. What I can say is that the clientele is somewhat different, to say the least.
There is only so much that a resort can do to influence the choices of potential customers. The resorts know this, and would do whatever it takes to ensure their rooms are full. This is where offline travel agents shine. Many people, despite what you think, still go to agents with a budget and a list of requirements, and it is up to agents to nudge their clients to specific resorts.
Thus, a certain level of occupancy is guaranteed at the cost of lower margins. Makes sense to you? This is not too different from hotels who run flash deals, special offers, attractive staycation weekends and flight crew contracts etc. At the end of the day, it’s all about the occupancy levels.
Empty rooms are bad. At the hotel I used to work at, it consistently hit an average of above 80% or 90% (amazing) considering the huge pressure from the increasing rooms supply.
The Best Rate Guarantee That Isn’t
OTAs such as Agoda or Expedia, on the other hand, don’t have any incentives and wouldn’t particularly push to sell one resort ahead of another. They simply regurgitate whatever instructions given by the resorts in terms of pricing or promotion, plus they take a cut.
Resorts (and in fact many major chains not specific to Maldives) are well aware of this and are fighting back in their own ways. This is why you will frequently come across Best Rate Guarantee on official websites. Such trends will continue.
How this works is that if you’re able to find room rates on a per night basis that is cheaper than what resorts are offering on their websites, they will match it. This is a win-win situation. For clients, they get the peace of mind of dealing directly with the resort. For resorts, they cut off the middlemen, don’t have pay them commission, build relationships and loyalty.
Note that such a rate guarantee is on a per night basis only. If you get an attractive package from an agent, then they are not going to match it. Sounds counter-intuitive? Why would they reject the chance to make more money?
Because this would screw their relationship that they have built with agents who ensure that their rooms are filled every single day. An agent isn’t going to be enthusiastic about promoting a resort that is backstabbing them. On the other hand, resort properties have no qualms about showing OTAs the finger.
The Open Secret Of Where The Best Deals Are
So, you want to get the best deal for the Maldives trip of a lifetime? Chances are, the best deals will come from a travel agent.
Ha. Ha. Ha. The irony, right? Those folks that you thought would have been made obsolete by technology and the internet. Now, you have no choice but to take the game to the agents themselves.
If you have had the time to look through online communities e.g. TripAdvisor forum, then it isn’t difficult to find out that travel agents are the talk of the town. All you have to do is to start asking around with a couple of agents and get some quotations!
Here, I will save you the ding-dongs and painful journey. The money saver is in early-bird packaged deals.
Early-bird meaning you make a confirmed reservation that is fully paid for, 60 days or 90 days prior to your arrival date. The logic is simple. Remember what I said earlier about the roles of travel agents? This is it.
Upscale resorts have room nights easily costing upwards of US$1000 per night, and they are not going to accept last minute cancellations. As long as you can help the agent fulfill their role of helping resorts to roll in the dough consistently, the agents will help you get a good price. This is why such attractive deals are almost always on a prepaid basis. Win-win-win situation.
Packaged deal means that the whole experience is 90% predetermined prior to arrival. Instead of charging each individual component (see previous post) separately, it is bundled up and sold at a nett price.
Ask for promo deals or bonus inclusions. If you don’t ask, they may not tell you. Typically you will come across offers such as complimentary half-board if booking is made more than 90 days prior to arrival. Or stay three nights and get the 4th night free. Or free return transfers.
A diplomatic way to start asking is to prompt the agent by saying you’ve come across other agent XXX that offered you an early bird package deal with complimentary nights/meals/transfers and you’re wondering if they have the same thing. If yes, can they provide a quote?
The Art Of Negotiation
You mean I can haggle?! Yup. Should you haggle? Of course! But, please do so in a civilized manner. Travel agents want to make money. You want to save money. Give it a compromise and try to make a deal that both parties are happy with.
Maldives resorts don’t deal directly with all travel agents. They typically deal either with Maldivian agents, or international agents that offers huge volume. So, if you are a Singaporean like me, and you went to a Singapore-based agent, you are in fact talking to a sub-agent. Surprise!
What this means is obvious, right? The two layers of middle-men both take a cut. Boohoo. This is where the crystal clear waters of Maldives start to get murky.
Yes, you will get extremely cheap quotes at times. The question is, are they trustworthy? The safe approach is simple – get in touch with plenty of agents and see how they are quoting and where there are based at. Soon, you’ll have a rough idea of what the average quote is and how low they can go. If something is too good to be true, be wary.
Say, an agent you’re comfortable with is quoting you $3K, which is roughly the median price range. You can always counter the offer by saying that you’re looking at a budget of around $2.8K only. From here on, it is a guessing game.
If they flat out reject you, that means it is probably too low for them. If they immediately agree, probably their margin is way higher than you thought. I like it when an agent sounds like it will be really difficult to make a deal at that price, and it takes some time before they give you an answer – that means we’re probably close to where I would like to be.
If you deal directly with a Maldivian agent or an international agent, chances are you can negotiate for an incredible deal simply because you’re cutting away one layer of fees. On the flip side, there is a certain risk associated with it such as insolvency. The added risk is incurred because the agents are based overseas and I’m not sure if it is easy or even possible to seek compensation via insurance etc if things go bad.
There was a famous case of international travellers (US, Hong Kong, Malaysia, Singapore, Taiwan etc) headed to Maldives who dealt directly with a fraudulent travel agent who used to be great. Things can get ugly really fast. Even years of good reviews could mean absolutely nothing.
We were just returned from Maldives. Everything were great until check-out. The hotel manager told us our travel agency, Atoll Paradise, hadn’t settled our bill and the resort asked us to pay the fee directly to the resort. We rejected the request since Atoll Paradise had collected my full payment two months ahead of our trip.
The alternative option is to go with a Singapore travel agent and incur an additional round of commission paid to them. The obvious benefits is that you can get travel insurance to cover insolvency with the added ease of having all parties based in Singapore. I see it as buying a peace of mind.
Wow, that’s a lot of writing there. I guess there is going to be a part 3 to cover some more stuff such as –
- Playing defensive – credit card charge-back
- Currency games
- Why I would stay an extra night
- Budget, budget, budget
Meanwhile, I’ve updated my Project SQ Suites status. The month of November is a month of sign-up bonuses and expected expenditure which pushed the progress up by a monstrous 26%. Tip of the month – volunteering to pay first for group meals is an excellent way to keep those air miles rolling in!
More Than Index Investing
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