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Travel agents can work for a travel agency or work as self-employed travel agents.
Either way, travel agents make money by booking segments of travel – such as airline, rental car and/or hotel reservations – for a client or group. You’re not paid until the final payment is made.
Travel agents make money by a salary if they work for big travel agencies. Travel agencies may also pay their employees an additional commission or extra pay, based on how much business the travel agent books.
Self-employed travel agents make money primarily by earning commissions or by charging certain fees for planning services.
With the ease of the internet age, you’d think that the travel industry would be turning away from using travel agents or travel agencies. But many travelers find the over-abundance of choices and time to research those choices overwhelming. And this highlights the benefits of using a travel agency or travel agents.
That’s why the travel industry is thriving.
12 Ways Travel Agents Make Money
How do travel agents make money? Travel agents make money from multiple sources. Whether they’re earning a commission or charging flat fees, they are working with travel vendors and other sources to sell travel.
Here are some ideas for you to consider:
1. Service Fees
A travel agent makes money by charging fees for separate elements of travel. For example, instead of charging a commission for booking tickets with airlines or hotel rooms, travel agents earn money by charging a service fee for each booked part.
Agents can also function as travel advisors, letting customers know of popular destinations or great deals on trips. For this service, an agent can charge a consultation fee for trip planning.
2. Cruise Incentives
The cruise industry, given the large number of passengers needed to fill a ship, may offer travel agents a high commission or bonus based on number of rooms booked by clients. A common commission rate is about 12% for cruises.
But a great part of the clients’ bills are the taxes paid. For example, for cruise berth bookings which cost $3,000, $1,000 of that may be taxes. When booking cruises, agents only earn a commission on the amount of cost that is untaxed.
First, a little history. Before the 1990s, a large portion of travel agent income came by earning commissions on booked tickets with airlines and reservations with hotels. When it became easy for a traveler to book flights or hotels using the internet, the days of earning big commissions for airline tickets and lodging dwindled.
Travel agents commissions used to be the bulk of their income but that has shifted. Most travel agents who earn commission booking tickets on airlines earn 5% on domestic flights and 10-20% on international flights. The commission rates are similar for booking hotels.
What if airfare for a roundtrip within the US is $200? With a $200 hotel room? You would earn $20 for booking both elements. Many travel agencies and self-employed agents choose to charge a flat fee for services instead.
4. Travel Insurance
Selling this type of insurance is the biggest chunk of revenue that a travel agent can earn. You earn commissions on selling this type of insurance.
Yes, it’s a money maker but also a valuable service to provide to travelers.
5. Car Rental
An agent can earn an 8% commission, or a $25-40 flat fee for making reservations with car rental companies.
6. Airline Tickets
There’s a business called an Airline Consolidator. The consolidator will often be able to search airlines to find the lowest price ticket for travelers. The consolidators work with international and domestic air travel.
The, if the travel agency or agent charges a flat fee, the travelers end result is still a lower priced ticket.
Tour operators develop awesome trips. They may organize a week-long fly fishing excursion to the best rivers in Montana. They may visit the top vineyards in California. They may visit key stops on Route 66.
8. Premium Listings
Travel vendors pay to have their cruise lines or destination lodging featured on a host agency website. Other travel vendors who pay for premium listings include rental car companies and airlines. The vendor assigns you an accreditation number to track what you sell.
9. Specialized Travel
For this an agency or agent may develop a tour for a specific event, such as the Olympics or professional sports championship. Or, the travel may be a certain segment of the population, such as Veterans or disabled persons.
Specialized travel can also be arranged for specific groups, such as corporations or organizations (garden or cooking clubs for example).
Arranging corporate travel can provide steady income. Make corporate travel smooth, and be responsive to any snags, and your reputation will build. Many in the business cut their teeth by making inroads here, which help them expand their business.
10. Vacation Packages
Leisure travel should be just that – no worries or headaches for the traveler. This is why vacation packages such as all inclusive resorts are so popular.
The destination wedding has also steadily gained in popularity as a vacation package with airfare, lodging and rental cars included in the price.
11. Mode of Travel
It’s not all Planes, Trains and Automobiles. Vacationers may want to bicycle from one New England Inn to another, take a houseboat down a river, or canoe/kayak a river in northern Maine.
The savvy agent takes care of the details, getting the vacationer to and from the destination, and setting up the adventure.
12. Custom Itineraries
There are clients who want to travel all over the world. They don’t want a bus tour. They want to hike in the Andes Mountains of Peru, followed by a canoe paddle on the Amazon.
They want to do some bird watching in the Everglades, then travel the Florida Keys.
Earn a good reputation with one of these (wealthy) clients, and you’ll make money.
How Much Money do Travel Agents Make?
According to stated national figures, the average income is $39,000. But it’s important to remember that this average salary statistic doesn’t differentiate between someone working for an agency, and someone who is self-employed.
Many agents in the industry earn six figures.
Types of Travel Agent
There are different modes of work in the travel agent community. How do travel agents make money? They can work from home or from an office:
Home-Based Travel Agents
You’re self-employed and work from a home office.
Your work for online travel agencies.
You work for large agencies.
How to Maximize Your Earnings
Your revenue streams should come from several different sources.
Sell Add ons
Especially travel insurance. Also seek to sell “side tours” with hotel bookings.
Work for a Corporation
Cha-ching. It’s not only a great way to make money. It’s a great way to bolster your reputation.
Make Arrangements for Group Travel
This can be a headache. At the same time, it’s a way to prove your organization talents.
This type of organized travel is increasingly popular. Specialized travel includes honeymoons and anniversaries, retirements and other milestones.
How do travel agents get paid?
Commissions – you are paid a percentage of the cost.
Service fees – you charge a fee for arranging each segment of travel.
Salaries – you work for a large travel company.
Net price overages – the vendor gives a price break, for example, for a number of hotel rooms (100). You add to the per room fee by a chosen dollar amount.
Travel perks – This isn’t a dollar figure, but vendors may give you a price breaks on things like hotel rooms or airline seat upgrades.