How Travel Agents Get Paid

If you’re planning a vacation and wondering how travel agents get paid, look no further. To begin, we will go over why you may want to consider a travel agent in the first place. Next, we’ll talk about the various ways that travel agents make money. The end goal is to help you decide if booking through a travel agent will be the best fit for your next trip. While also explaining how travel agents make money.

Booking with a Travel Agent

There are many different reasons why people still decide to book through a travel agent. Though, with the growth of online booking systems, they are less popular.

Convenience

People who continue to book their trips with a travel agent do so typically because they want convenience. A travel agent will save you the time of having to research the destination and all of the best itinerary possibilities. You can simply give them a time frame, budget, and the type of vacation you are looking for and they put together your travel plan. By picking a knowledgeable travel agent, you will save yourself a lot of time from just the researching aspect.

Another point for convenience is that if there are any hiccups in your travel plans, your travel agent will be on hand to help fix it. It’s never fun to show up to a tour or hotel and they can’t find your reservation. If your travel agent helped book your trip, they will also be on standby if anything goes wrong. So in this case you would just need to give them a call, or reference the provided booking details to resolve the situation quickly.

Perks

Travel agents are also well connected in the travel industry and can often times give you more perks and upgrades for less money (or free). They often have developed relationships with various companies. From hotels, cruise lines, air lines and tour companies, they are well known because of referring business to them. And in turn, those companies offer discounts and add-ons that the normal online booking site wouldn’t give you.

Niche Travel Needs

Booking through a travel agent is still very popular in niche markets. Such as, if you are wanting to book a Disneyland vacation of a lifetime, there are Disney travel agents ready to help. These specialized travel agents know the park, activities, and accommodations better than anyone. This means they can book the most optimized Disney trip possible.

Work or company travel trips are also a popular niche to book through travel agencies. Booking a larger amount of people with a specific conference or business purpose in mind is usually more efficient to book with an agent. Travel agents will often be able to juggle multiple itineraries easier, and get bulk discounts as well. Also, if anybody has trouble with their travel plans, they can contact the travel agent to resolve more easily.

Lastly, luxury travel is often best booked through a travel agent. Upgrades and perks are a common reason to book your luxury travel through a travel agent. They not only have the insight of the best places to stay, but the best rooms and services to book during your stay.

How Travel Agents Get Paid

There are a variety of ways that travel agents can get paid. We’ll go over the top ways how travel agents get paid, but it is always best to clarify with your specific travel agent or travel agency. Here are the ways how travel agents make money:

Commissions

A main way that travel agents get paid is through commissions. The airline, hotel, tour companies, car rental agencies, etc. will pay a percentage of the total booking to the agent. Or some do a flat rate commission. This is their way of incentivizing travel agents to refer more customers to book with their hotel or tour company.

It’s important to keep in mind that even though travel agents are receiving a commission, it does not mean that your price will necessarily be higher than booking directly. Travel agents send more traffic to these companies and if anything will get you a discount if available. The travel company paying your travel agent a commission just means that they are splitting the profits.

Typically, travel agents will receive a commission of 10%-20% of retail price of travel bookings. Commissions will not increase your overall price, and you will not see it on your final invoice. They are all worked into the brochure prices you are shown.

Service Fees

Many travel agents charge clients a service fee, especially if they will only be creating an itinerary for the trip. This is a popular way how travel agents make money. If a travel agent is only making the overall plan of the trip and not booking a service fee is likely going to be charged. That is because they will not receive a commission from booking and need to be compensated for their time. There are also agencies that will charge a service fee even if they booking the travel for you and receiving commissions that way. This is why it’s always good to clarify any service fees ahead of time.

Typically, a travel agent service fee will be $100 – $250+, depending on the type of trip you’re needing help planning. If your travel agent charges a service fee, this will typically be displayed on your final invoice as a separate item. This will be on top of any advertised travel pricing you’re shown.

How a Travel Agency Makes Money