How Travel Agent Make Money?

When asking how a travel agent can make money, the obvious and simple answer is that they sell travel! But in this article, we want to expand on what a travel agent can sell instead of focusing on high-level thinking of selling flight tickets or booking hotels.

There’s so much more a travel agent can target and sell that the possibilities are almost endless in creating revenue as a travel business.

Travel agents, versatile in their professional capacities, have the option to be employed by a travel agency or to branch out as independent, self-employed agents.

In either scenario, their primary source of income is generated through planning and booking various components of a journey.

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“How do travel agents make money?” This is a question I hear often.

Usually, the people asking are either those who are interested in becoming a travel agent or it’s coming from those who find out I work in the travel industry and they can’t believe travel agencies are even still around!

(Um, they are, and they’re the new darlings of the time-starved, information-overloaded travelers of today!) Learn How To Become a Travel Agent.

How Do The Big Travel Agencies Make Money Online?

Let’s first define what a big travel agency is before we talk about how they make money. When we’re talking about a ‘big player’, we’re talking about an agency that has tens of millions of sales revenue.

There isn’t really a cut-off on when you hit this threshold. The reality is that if you’re in this circle, you’ll know it. They’re the 1% of the travel agency world. 🙂

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While most agencies earn commission based on their sales tiers, these ‘big players’ can earn overrides based on their revenue on top of commissions.

When they meet a pre-determined sales goal or move market share, the vendor compensates them. These overrides can come from any number of vendors including airlines, GDSs, cruise lines, tour operators, car rental companies, and more. Find Travel Agent Remote Jobs

How Do Corporate Travel Agents Make Money?

Corporate travel agencies make money mainly from service fees, net/private fares, and from airline commissions. Airline tickets are the lifeblood of corporate agencies (also known as TMCs or travel management companies).

Were TMCs going to stop selling airline tickets just because airlines stopped commission? No way. They had to get creative to offset lower commissions. What did these corporate agencies do? They implemented a service fee when they booked a ticket.

In addition to air, corporate travel agencies earn commissions from booking cars and hotels for business travelers. Corporate travel agencies make money mainly from service fees, net/private fares, and from airline commissions.

Ways Travel Agents Make Money Online

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How exactly do travel agents generate income? They have a diversified income model, deriving their earnings from a variety of sources.

Whether it’s via commission-based earnings or fixed service fees, they collaborate with travel vendors and utilize numerous strategies to sell travel.

Travel agencies can be small, independent operations or large, nationwide chains responsible for packaging trips to millions of people around the globe.

Helpful, friendly travel agents provide customers with expertise and guidance when booking a trip of any kind at little to no cost to the traveler. Find out how to become an online travel agent.

Let’s explore these diverse income channels:

1. Airline Tickets – online travel agent

Collaborating with an Airline Consolidator, agents can help clients secure the most economical airfare. These consolidators scan a vast network of domestic and international airlines to find the most cost-effective options.

If the travel agency or agent charges a flat fee for this service, the final ticket price can still be considerably lower for the traveler, offering them value for money while ensuring steady income for the agent.

2. Service Fees

A travel agent’s revenue can be significantly supplemented through service fees, charged for distinct elements of the travel planning process. Instead of solely relying on commissions for securing airline or hotel reservations, agents can levy a service fee for each component they book.

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Additionally, their role often extends beyond mere booking; they serve as travel advisors, highlighting popular destinations or lucrative deals, thus enhancing the overall travel experience for clients.

A consultation fee for this advisory service may also be part of their earnings.

3. Custom Itineraries

Custom itineraries for clients with distinct travel desires can be a profitable niche for travel agents.

These clients may wish to eschew traditional bus tours in favor of unique adventures, like hiking in Peru’s Andes Mountains, paddling on the Amazon, or birdwatching in the Everglades before heading off to the Florida Keys.

y catering to the specific desires of these often affluent clients, travel agents can build a robust reputation and a steady stream of income.

4. Specialized Travel – How To Become a Travel Agent

In the realm of specialized travel, agents can carve out unique experiences tailored for specific events, such as the Olympics, or particular demographics, like veterans or disabled persons.

They can also curate travel arrangements for niche groups, such as corporations or hobby-based organizations like gardening or cooking clubs.

Corporate travel arrangements are a lucrative sector that can provide a steady income stream.

By ensuring seamless corporate travel experiences and promptly addressing any issues, agents can enhance their reputation, and consequently, their business prospects. Many travel professionals have started their journey by establishing a stronghold in this area.

5. Consulting Fees

Many other industries charge consulting fees, so why should travel be any different?

By marketing yourself as a travel consultant you are sharing your expertise and should charge accordingly. Creating itineraries requires time and research, so a consultant fee will be applied.

Group bookings can be a logistical nightmare so having someone manage the process for a fee will also be welcomed.

6. Niche Travel

Another popular income source for travel agents is focusing on a niche so that they can create group trips or become a go-to source when a traveler is looking for a particular travel experience.

Many agents even have two businesses under one umbrella where they will sell travel to anywhere in the world but also have a side that is dedicated to a niche.

As an example, a travel agent might sell a lot of resort packages and cruises but then have a second business just for wine and food travel.

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Even though there are hundreds of different niche travel options, here are a few to give you an idea of what niche travel can look like:

• “Surprise” Travel: This has been a growing sensation for many travelers. Surprise Travel is when a travel agent books an entire trip for someone but the traveler doesn’t know where they are going until the day before or when they get to the airport!
• Sports Travel: An agent might rent a charter bus and find 50 people who are interested in traveling to a sports game and book hotels, activities, and transportation for the group.
• Destination Weddings and Honeymoons: If weddings and honeymoons are your jam, this is a great option for you!
• Disney: Many agents focus solely on Disney experiences and these agents live and breathe it. They know all the in’s and out’s of each park and can help customize your trip to fit your families needs.
• Special Needs: Focusing on a demographic can help when choosing a niche. Someone who focuses on special needs travel will be a pro at knowing what to look for when booking, what types of accommodation might need to be made, where to rent equipment, and so much more. For more information on this type of niche, check out webinar here.

7. Mode of Travel

Travel isn’t always about planes, trains, and automobiles. Some vacationers desire unique modes of travel—bicycling from one New England Inn to another, journeying down a river on a houseboat, or canoeing in northern Maine’s rivers.

Savvy travel agents cater to these desires, meticulously managing the details and logistics of such unique travel experiences.

By doing so, they create unforgettable memories for their clients while expanding their range of services and income potential.

8. Travel Insurance

For many travel agents, selling travel insurance is a significant part of their revenue. Not only does this service offer lucrative commission rates, but it also fulfills a critical need of travelers, providing financial protection against unforeseen events during their journey.

By offering insurance, agents can enhance their service portfolio, ensuring a comprehensive travel experience for their clients, while also boosting their own earnings.

 9. Premium Listings

Promoting premium listings is another avenue that travel agents leverage. Companies in the travel industry, such as cruise lines, airlines, or car rental businesses, pay for their services to be highlighted on a host agency website.

This prominent feature attracts potential customers to the premium services. The travel agent gets assigned an accreditation number by the vendor, which helps in keeping track of their sales.

By showcasing premium listings, the agent not only facilitates the client’s search for high-quality services but also secures a payment from vendors for the marketing service.

10. Vacation Packages

Travel agents understand the essence of leisure travel – a carefree experience devoid of hassle for the traveler.

Thus, all-inclusive vacation packages, including resorts, are extremely popular. These packages often comprise of airfare, accommodation, and rental cars, eliminating the need for travelers to worry about separate bookings.

Destination weddings, a trend that has gained significant traction over the years, is another variant of such packages.

Agents, by offering these comprehensive packages, can cater to clients’ needs while securing their earnings.

11. Tours

Tour operators curate unique experiences, from a week-long fly fishing adventure in Montana’s pristine rivers to a wine tour in California’s top vineyards or a journey through Route 66.

Travel agents play a vital role in promoting and booking these exclusive trips, providing their clients with memorable experiences while gaining a part of their income from this segment.

12. Car Rental

Facilitating car rental bookings presents another avenue for income for travel agents. Agents can secure a commission of approximately 8%, or opt for a flat fee model that could range between $25-40 per booking.

By collaborating with rental companies, they ensure convenience for their clients and augment their income stream.

13. Commissions

Prior to the digital revolution in the 1990s, commissions from airline tickets and hotel reservations served as the primary income source for travel agents.

When online platforms enabled easy self-booking, these traditionally high commission avenues began to wane. Today, although these commissions still constitute a part of an agent’s earnings, the rates have lowered considerably.

Domestic flights typically fetch around a 5% commission, whereas international bookings can secure between 10-20%.

A roundtrip within the US coupled with a $200 hotel room would thus generate a modest $20 commission. With this shift, many travel agencies and self-employed agents have pivoted towards a flat fee model to ensure a steady stream of income.

14. Cruise Incentives – How Travel Agent Make Money Online

The cruise industry, aiming to ensure maximum occupancy on their vast ships, often extends attractive commission rates or bonuses to travel agents based on the number of cabins they book.

Commissions could be as high as 12%. However, significant portions of the cruise fares, for example in a $3,000 fare around $1,000 might be attributed to taxes.

Agents only earn commission on the non-taxed portion of the cruise fare.

15. Hotel Suppliers

The standard industry rate is in the 10 percent range, but special promotions such as Las Vegas wedding packages, can offer up to 33 percent commission, according to Hilton Hotels.

This amount is deducted from the supplier’s bottom line after payment is received. It is then sent to the agency in a monthly statement after the traveler has returned from her trip.

How Much Money do Travel Agents Make?

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As per national statistics, the typical income for individuals in the travel industry stands at approximately $39,000.

However, one must bear in mind that this figure is an average that amalgamates the incomes of individuals working for an agency and those who are self-employed.

It doesn’t delve into the nuances that come with these different forms of employment or the variable income patterns associated with each.

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Interestingly, despite this average, many agents in the industry surpass this figure significantly, earning incomes well into the six figures.

These individuals typically have an expansive network of clients, offer highly specialized services, or have carved out a niche for themselves in the industry.

Their success underscores the potential for substantial earning within the travel industry for those who can differentiate themselves and cultivate a robust client base.

Types of Travel Agent

The working environment within the travel agent community can be highly varied. How do travel agents make money in these diverse settings?

They may choose to operate either from a home-based office, offering flexibility and personal convenience, or opt for a traditional office setting, which can provide a more structured work environment and greater opportunities for collaboration with peers and clients.

Regardless of their chosen work setting, the aim remains the same: crafting ideal travel experiences for clients. Learn how to become a travel agent.

Work Setting	Employment Status	Work Environment
Home-Based	Self-Employed	Home office
Online	Employed	Online agencies
In-Store	Employed	Large agencies

Learn How To Maximize Your Earnings

• Diversify – 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.
• Specialized Trips – This type of organized travel is increasingly popular. Specialized travel includes honeymoons and anniversaries, retirements and other milestones.

How Do Travel Agents Get Paid?

• Salaries – you work for a large travel company.
• Commissions – you are paid a percentage of the cost.
• Service Fees – you charge a fee for arranging each segment of travel.
• 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.
• 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.

But How Do Leisure Travel Agents Make Money?

After the commission cuts, many travel agencies shifted to selling high-ticket products that still paid travel agent commissions.

These products were essentially vacation packages and cruises. Nowadays, these are your leisure travel agencies (the ones you probably think of when you think of a travel agent.)

Generally, leisure travel agencies’ main revenue is from commissions vendors pay on vacation packages, cruises, air, and other add-ons. However, consultation fees and service fees are becoming more common as agencies try to diversify income sources to become less dependent on supplier commissions.

If you’re wondering how many travel agents make money by charging a fee, you’ll want to take a peek at HAR’s complete fee survey archive here!

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In 2022, 53% of advisors reported charging fees. Just to compare to the days of yore, only 33% of advisors charged a fee in 2017. Holy smokes, that’s a big increase.

Charging a fee helps agents boost their bottom line and compensates them for their expertise. For agents hesitant to charge fees, some agents implement a ‘look-to-book’ fee or a “plan to go fee.”

This is an up-front fee for research, which is applied to the booking when it’s made. Other agencies charge a straight-up non-refundable fee for consultations.

Air ticketing service fees are typically the most common among advisors. When you focus on non-air ticketing fees, these services ranked in the top 5 for advisors to apply fees:

How Do Travel Agents Make Money With Custom Itineraries?

Mass market trips like cruises, all-inclusive resorts, or group bus tours around Europe aren’t for everyone.

When you want an itinerary built just for you, travel agents call that an F-I-T trip — in plain-speak, you’d call that a custom itinerary. But why be simple like that when you could come up with an acronym, right?! 😉

Custom itineraries are more time intensive and may involve booking places that don’t pay travel agent commissions. Agents that build FITs typically charge higher consultation, trip planning, and/or service fees to compensate.

FIT travel agents make money not only through the fees mentioned above but also through net pricing mark-ups and commissions from the different vendors they’re booking.

There’s no one-size-fits-all fee when it comes to custom itineraries. But if you’re curious about learning more about what kind of fee would make most sense for your niche.