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How Do Travel Agents Get Paid – “How do travel agents make money?” This is a question I hear often. Usually, the people who ask are either those who are interested in becoming a travel agent or come from those who discover that they work in the travel industry and can’t believe that travel agencies are still around ! (Ahem, they are, and they are the new darlings of today’s time-starved, information-overloaded travelers!)
I’ll go deeper in just a second, here’s a list of steps that show how travel advisors make money:
How Do Travel Agents Get Paid
Now, if you are looking for how travel agents make money that are employees of an agency, that falls more in the territory of the salaries of travel agents. You are on the right site, just the wrong article. 🙂 Here’s our article that deep dives into travel agent salaries.
How Much Money Do Travel Agents Make? (2019)
To give an answer about how travel agents make money, it is important to know a little history. I promise to keep it short – it’s actually quite fascinating how the industry has changed over the years.
In the good days, a large part of the travel agency’s income comes from airline commissions. Since tickets were expensive, in demand, and could only be purchased from agents or airlines, they were the bread and butter of any agency.
They were travel agents in every sense of the word because they were travel sales agents. Their revenue came from commissions earned from the sale of travel products. However, when airline commissions were cut and limited in the 1990s – sad face! – the main revenue base for travel agents has disappeared. It hurt. A lot.
Airlines have cut their commission because they can now reach travelers via the web and online travel agencies (OTAs) like Expedia and Booking.com. Travel agents, who were once dined and dined by the airlines, were left out in the cold. Ouch.
Home Based Travel Agent Expect Income
With this rapidly changing travel landscape, travel agents needed to find a new way to make money. . . and soon And that’s where our modern story of “How do travel agents make money?” it begins
With commission cuts and customers’ ability to book online, agencies needed to adapt to the new travel planning and booking landscape. The travel agency community has been, quite honestly, devastated by this. Many agencies that did not adapt quickly enough had to close their doors.
It’s okay, it’s okay. Before going over a whole box of tissues, I want to make sure that the end is happier. stay with me 🙂 While smaller than in its glory days, the travel agent community has found a balance.
Starting in 2013, travel agents began to see their number grow. Where there was once a concern that there were no travel agents to fill the shoes of those who are retiring, there is an influx of new blood, eager to take advantage of the flexibility and travel opportunities that an agent career brings. of travel provides.
How Do Travel Agents Make Commission?
Did you catch it?!? We went from 70% of the workforce being over 55 in 2013, to 50% of the workforce being younger than 55 in 2022! While ASTA and HAR tend to attract different demographics — ASTA has traditionally been larger, retail stores and HAR is typically smaller, storefront agencies — but even so, the trend is clear. Travel agents are no longer in danger of extinction. (HUZZAH!!!)
A big reason for this new influx? The rise of the remote worker. Call them solopreneurs / home-based / location-independent – whatever hip term you want to use. They may be harder to see without a showcase, but this new industry segment is now a force to be reckoned with!
In general, the most popular agency model has changed from the storefront agencies of the past to the remote agencies of today.
Think it’s too good to be true? Read about a travel agent career prospect, who has the data to back it up!
These Are The Four Types Of Travel Agency Fees You Can Use To Make Money
Along with the loss of airline commissions, travel agents face the challenge of non-commission fares (NCF) from many major cruise lines. Yes, it’s self-explanatory: they are various fees that are not commissions. While a cruise sale may be $2,000, it is possible for only $1,400 to be commissionable. The kicker is that an advisor will always put a lot of elbow grease into booking those NCFs for their client.
Travel agency business models (both corporate and leisure) are moving to become less dependent on commissions alone. Why the change? Not only are commissions from airlines and other vendors lower than in the past, but the industry has experienced huge economic ups and downs including 9/11, recessions and pandemics. (Am I missing something? PHEW, travel agents sure are tough!)
The commission’s engagement went on a roller coaster during these times. During the coronavirus pandemic, for example, advisers have been working overtime canceling trips, bending over backwards to get their clients home safely, spending a lot of time keeping up to date with travel regulations constantly changing, and booking trips despite the fact that commissions have arrived. to an arrest. That’s right, they were working overtime for essentially no pay. These major pitfalls help advisors understand the importance of diversifying income streams to help stabilize income.
So how do travel agents make money in a world where their commissions are lower (and even unpredictable at times)? One solution for advisers to counter the decline in commissions was to diversify their income by charging fees. This has helped agencies move away from complete reliance on salesperson commissions, helping them pad a bottom line that was once cushioned by generous airline and salesperson commissions.
Travel Agents Share Their Best Tips On Common Issues, So You Don’t Make The Same Mistakes
Okay, before we really dig into things, it’s important to understand that different types of travel agencies make money in different ways.
To make it easier, we have divided the question of how travel agents make money into 4 main types of travel agencies: corporate, leisure, personal and “the big players”.
How do Corporate Travel Agencies make money? Corporate travel agencies earn money primarily from service fees, net/private fees, and airline commissions.
Airline tickets are the lifeblood of corporate agencies (also known as TMC or travel management companies). Should TMCs stop selling air tickets just because airlines have stopped commissions? No way. They had to get creative to make up for the lower commissions. What were these corporate agencies doing? They implemented a service fee when booking a ticket.
How To Become A Travel Agent [step By Step]
In addition to air, corporate travel agencies earn commissions from booking cars and hotels for business travelers. Corporate travel agencies earn money primarily from service fees, net/private fees, and airline commissions.
The average service fee for airline tickets in 2022 was $39 for domestic air and $63 for international air for agents who booked corporate travel.
Travel agencies, depending on the airline contracts they have access to, are able to earn commissions both on domestic air (typically 0-5%) and on international air (around 10-22%).
So how much do corporate travel agencies charge? According to our 2022 Travel Agent Fee Report, the average service fee for airline tickets in 2022 was $39 for domestic air and $63 for international air for booking agents a corporate trip.
How Do Travel Agents Make Money?
✈️ Read more about airline fare types here. ✈️Do you want to get into corporate travel? Read how 3 corporate agents broke into the industry.
After the commission cuts, many travel agencies switched to selling high-ticket products that paid travel agent commissions. These products were essentially vacation packages and cruises. Today, these are your favorite travel agencies (the ones you probably think of when you think of a travel agent).
In general, the main income of leisure travel agencies is from the commissions that sellers pay for vacation packages, cruises, air and other add-ons. However, consulting fees and service fees are becoming more common as agencies seek to diversify sources of income to become less dependent on provider commissions.
If you’re wondering how much money travel agents make by charging a fee, you’ll want to take a look at HAR’s complete fee survey archive here!
How Much Money Can A Travel Agent Make In 2021?
In 2022, 53% of advisors reported charging fees. Just to compare with the times of old, only 33% of advisors paid a fee in 2017. Holy smoke, that is a big increase.
Charging a fee helps agents boost their bottom line and compensates them for their expertise. For agents who are hesitant to charge fees, some agents implement a “look-to-book” fee or a “plan to go.” This is an initial fee for the search, which is applied to the reservation when it is made. Other agencies charge a flat non-refundable fee for consultations.
Airline ticket service fees are typically the most common among advisors. When focusing on non-airline ticket fees, these services are ranked in the top 5 for advisors to apply fees:
Learn from an agent who earns 80% of his income from fees. (No, that’s not a typo!)
Why Heyday Disney Travel Agents Make Trips Better
Mass market trips like cruises, all-inclusive resorts, or group bus tours in Europe are not for everyone. When you want an itinerary built just for you, travel agents call this a FIT trip – basically, you’d call this a custom itinerary. But why be so simple when you can come up with an acronym, right?! 😉
Custom itineraries are more time-intensive and may involve booking seats that do not pay travel agent commissions. Agents who build FITs typically charge higher consulting, travel planning and/or service fees to compensate.
FIT travel agents do not make money
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