How do travel agents get paid?
Ever wondered how a travel agent gets paid? Trying to figure out if there’s something secret in your bill, or just if you can afford to have someone help you with the trip you’ve been dreaming about?
While every travel agency has their own business model, by and large agents are rarely paid directly by their clients. Think of it this way- every company has a wholesale price for their product. If they sell it to you directly, they get to keep the margin between the wholesale and rack rate… which is why you always hear hotels saying it’s best to book direct (Hot Tip: Rarely true!). When you work with a travel agent, that margin (or a portion of it) goes to him or her. Generally, the portion of that margin that goes to your agent is based on their company’s relationship with whoever their working with. Whether it’s a resort, a cruise, a train vacation, or anything else, this is tends to be around 10% of the pre-tax amount the customer is paying. These funds are only passed along to your agent after you’ve made a final payment or traveled- which is why many agents choose to charge a planning and/or cancellation fee. If you cancel, we’re not paid no matter how much work we put in!
The grand exception to all of this is airfare-only trips. Many agents opt out of just selling air, as there are all kinds of government regulations and agents cannot be paid by airlines for selling airfare. Agents who do choose to sell air will often charge a service fee for booking- sort of like the call in fee if you book plane tickets over the phone, except most agents will include their in-travel support to those who book air-only with them as well. These aren’t fees that can be snuck into your fare- they’re generally a second transaction all together. Whether you’re booking air-only or air within a vacation package, 9 times out of 10 your agent makes no money beyond a service fee on your plane tickets.
Not everyone likes talking about money, and that’s fine- I get it. But when it comes to being a travel agent in this age, transparency is key. It’s important for clients (and curious types!) to understand how and why agents are getting paid, and what’s packaged into their bill (or not). An agent’s job is more than to simply book your trip- it’s to give you advice, find the perfect extras, build a customized itinerary, and to make sure you have a great time. We’re here to take the hassle out of making your dreams reality.