The travel agent industry has gone through many significant shifts in recent years. Even before the COVID-19 pandemic, agents had to rethink their revenue streams seriously. In the 1990s, airline companies introduced price caps on the commissions agents could earn from booking flights. The rise of the Internet also reduced the total commission rate for hotel reservations.
Although airfare and hotel commissions are still significant, they aren’t the only way agents make money. Whether agents work independently or as contractors for an existing agency, there are many additional ways travel agents earn money for their services.
How Do Travel Agents Make Money? — A Few Of The Most Common Methods
As mentioned above, many travel agents still rely on hotel and airfare commissions for a portion of their revenue. If a travel agent makes a sale, they will see these commissions enter their account once the client goes on their trip. However, since these prices are capped, agents will often charge extra fees for any services they provide to their customers.
Ever since the COVID-19 pandemic, it has become increasingly common for travel agents to charge planning fees. Since clients have to pay these fees upfront, it ensures a travel agent will get some compensation for their work. Without planning costs, there’s always a risk that travel agents won’t have any revenue if families and groups suddenly cancel their trips en masse. When global travel restrictions ramped up in 2020, countless travel agents who didn’t charge planning fees struggled to survive due to the sharp increase in cancellations. Remember: travel agents can’t collect commissions unless people go on vacation.
Beyond hotel & airfare commissions and planning fees, travel agents could earn more money by organizing special events, premium services, or tours. Travel agents also make a percentage for selling products and services like traveler’s insurance, cruise bookings, and car rentals.
Note: Most travel agents nowadays use host agency services like Outside Agents. Host agencies provide independent travel agents with dozens of services to make their job as simple as possible. In addition to serving as the intermediary between agents and booking portals, hosts like Outside Agents offer sales tracking software, educational resources, and marketing tools. Typically, agents pay a monthly fee and a percentage of total commissions to their host agency.
Building Relationships and Networks
Relationships and networking are essential to succeeding as a travel agent, as they help you create strong connections with customers, suppliers, partners, and other players in the industry. Establishing a good rapport with clients is the first step when it comes to building a successful business. Being attentive to their needs and offering helpful advice can go a long way in creating a sense of trust with your customers. Additionally, responding promptly to inquiries and providing good customer service are all important elements of creating a solid working relationship with customers.
Networking is another crucial part of the travel agent business, as it involves connecting with local tour operators, airlines and other agents who may be able to provide helpful advice or even suggestions for potential trips. Joining tourism associations such as IATA or ASTA can be highly beneficial in providing access to useful information on the latest industry trends as well as tips on how to start out in this quite competitive field.
Benefits of Specializing in Certain Areas
Focusing on a certain type of travel may open up other opportunities as well. Agents who specialize in certain areas can capitalize on their expertise by hosting webinars or seminars, which will further expand their network and reach more potential clients. They can also create blog posts about their respective specialty that could be used as promotional tools for their business. Finally, specialized travel agents can also form partnerships with popular travel companies like Expedia and TripAdvisor to offer discounted packages to their customers.
So, Is It Worth It To Become A Travel Agent? — That’s Up To You!
Many people love the freedom and flexibility of working as an independent travel agent. However, some may not feel comfortable trying this profession since there’s no steady salary to rely on. It often takes months for new travel agents to build up a sizeable clientele and start to see the fruits of their labor.
Taking the first step away from a salaried job into an independent work model can be nerve-wracking. However, travel hosts like Outside Agents have training resources to help people understand whether becoming a travel agent is right for them. Anyone on the fence about becoming a travel agent should take advantage of these resources before deciding their next career move.