How do Travel Agents get paid?

September 20, 20223 min read

Easy, we don’t! Just kidding, we do. But not enough. Here’s the quick back story:

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I come from a lineage of travel agents and I love hearing stories from my father and late grandfather about travel agents in days past. Currently, in the city of Akron, Ohio there are less than a handful of travel agencies. But back in the ’70s and 80’s, there were dozens! To travel you had to use a travel agent! Even for things such as a weekend hotel in Pittsburgh or a flight to Palm Springs you had to use a travel agent! The travel agent made a commission on whatever they sold you. Flights, hotels, tours, and cruises were all commissionable and a travel agent was the only way to book it. This is because travel agencies have an IATA number (International Air Transport Association) which allows agencies to sell travel while also tracking your agency's sales for commission reimbursement.

The year 2000:

If you haven’t noticed there is a lack of travel agencies in the world today. This is because around the year 2000 one airline (who shall remain nameless) decided to stop paying travel agencies commission. This was also during the internet boom so they transitioned into selling directly to customers on their own website. From here the other airlines followed and for travel agencies the 10% commission on every ticket sold dwindled as well to 8% then 5% and so on and so forth until 0.

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Selling travel in the 21st century:

If you’re a travel agent today I must say congratulations. It’s not easy! Your competition is no longer the travel agency around the corner. It’s now the internet which is full of online booking platforms that will sell you travel and they make it as easy as can be.

So how do travel agents make money today?

We still make money from selling hotel nights, group tours, private tours, rental cars, some international plane tickets, travel insurance, and cruises. The commission percentage varies based on the number of sales you make and the contract you have with the supplier. But don’t get too jealous of your local travel agent. In all likelihood, they’re making somewhere between 5% and 12% for your vacation.

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Travel agents must charge fees when necessary. At my travel agency, our goal is to book you a vacation package. For example: if you book a flight + resort package through me I will not charge you a fee because I make a commission on the package. Yet, if you want a flight from New York to Fort Lauderdale then I charge a $30 fee to help you book your flight (which is more than fair for a professional’s help).

Another example of when a travel agent should charge a fee would be if a client wants to pick your brain about day trips which they could do from their beach house in the Carolinas or they want a complicated customized itinerary around Europe or Asia. If your travel agent says they’re going to charge you a fee then good for them. You should pay it (assuming you feel it’s reasonable) because a good travel agent is worth their weight in gold. They’re the one who will go to bat for you should something go wrong and they’re the one who is going to do all the tedious work of confirming and reconfirming everything.

In summary:

If you need a flight to Florida or California then it’s best to hop online. But if you’re ready to plan that trip to Europe, the Caribbean, Cancun, Asia, or a cruise, then call a travel agent. Explain to the agent what you want and ask if they’re going to charge a fee or not and if so how much. If you’re not comfortable with their fee then shop around. But remember, you get what you pay for.

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