How Travel Agents Get Paid

Cruise Ship Docked at Ocho Rios
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A generation ago, in the heyday of the travel agent, fees and commissions were plentiful. There was no Internet, so planning a trip was definitely not just a click away. Travel agents could probably get away with charging you a fee and rake in commission as well booking your vacation. And, unlike today, airplane tickets were the big money. But, in the 1990s, airlines dropped commissions to travel agents as technological advances meant people could very easily book their own tickets and trips over the phone or the Internet and actual paper tickets became a thing of the past.

As Internet accessibility became the norm and travelers could shop, book and pay for travel themselves online, the life of the agent became a bit more difficult—to say the least.

But the Internet hasn’t wiped travel agents off the planet just yet—in fact, quite the opposite. The pendulum is swinging back in their favor as a new generation of travelers realizes that the travel agent still provides people with the same thing that they were looking for all those many years ago—value and convenience.

But without their enormous commissions, how do agents get paid? Can travel agents make any money?

Commissions

Commissions are still a large part of an agent’s revenue stream, but they are harder to get these days, and travel agents need to be more creative in how they get them. One of the biggest fears that travelers have—possibly you if you are reading this article—is that your travel agent is going to sell you something based solely on the fact that they will net a large commission. While this could happen if you are dealing with an unscrupulous travel agent, it’s not likely. A big commission is a great score but, today, agents are trying to build clients for life.

They want to book you on your next trip, and your next trip after that and develop a lasting relationship with you. Most travel agents would agree that creating the ideal trip is of the utmost importance rather than creating a bad situation just for a large payout. It’s better to create a constant, if not smaller, revenue stream than just a quick payday.

That being said, it’s much more lucrative for travel agents to sell larger ticket items such as cruises and tour packages with a variety of levels of commissions than it is for travel agents to book you a simple hotel room and an airline ticket.

Service Fees

Another way that travel agents make money is to charge a fee for their services. This is similar to a consulting fee that you would pay just about anyone else who is providing you advice—but somehow, people often expect travel agents to dole out their knowledge for free. This is beginning to change as travelers realize that, when they are booking something more than just a hotel and a plane ticket to a single destination, travel agents can provide some real value. They have connections at airlines for better seating and upgrades, they know hotel managers who can provide better rooms for similar—yet still low—rates, they know destinations and can make sure you have appropriate transportation booked in advance, good seats at the theater and dinner reservations at the best local restaurants.

As the Internet grew in popularity, people thought that they could do all of these things on their own but they realized two things: it takes precious time, and they weren’t always right when they got there. It only takes one volcanic ash cloud, hurricane, flood, or other natural disaster to see the value in having an agent to get you out of a bind, just like it only takes booking one high-end luxury cruise on your own to realize that the couple next to you paid the same amount (or less) with an agent and they receive free canapés, wine, and special invitations during the cruise that you don’t.

What’s an appropriate fee? Ask your travel agent if they have a sliding scale or one based on a percentage of your trip. If there is a lot of detail and special planning and arrangements, a fair price could be anywhere from $500 and up. But sometimes agents will consult with you on a trip for just an additional $50 or charge you a small hourly fee.

If you are concerned about the fee or are not sure you can afford to pay it, don’t be afraid to be upfront with your travel agent. Today’s travel agent is about flexibility, convenience, and affordability and creating a long-term client base and a good agent should be able to discuss these things openly and honestly and explain to you the value that you are getting from their services.