When you hire a travel agent, you may be surprised with the low cost. Sometimes, you only have to pay a researching fee, so how does a travel agent make their money? It’s much more complicated than your average hourly worker. Here is a look at the breakdown of how travel agents make money.
Commission
A little-known fact about travel agents is that they often get commission off of which companies they book. Hotels, flights, and cruises pay representatives to book people on their cruise. The biggest commission comes from hotels, as flights don’t provide as much as they used to. The lack of commission from flights is due to the fact that it’s so easy for customers to book using a website like Orbitz or simply going to the airline’s website.
Fees
"Fee" is usually a dirty word to the general public, but it’s how the average travel agent makes a living. If commissions don’t make enough to pay the representative, you’ll end up having to pay a fee. Some businesses have a flat fee for basic services, like booking with a basic airline, but if you’re looking for something more complicated, expect to pay more. Other businesses may choose to charge on an hourly basis, as it can take several hours to research a locale or trip adequately.
Specialized Services
It isn’t rare to come across an agency that specializes in a particular type of trip, such as group or corporate travel. These representatives earn money based on the knowledge they’ve gained working in the field. With this up-charge, you’ll get additional benefits that make the trip much easier. Some privileges can include company software and consulting services that assist companies in finding discounts.
Insurance
Most people don’t purchase add-ons for their trip since they’re already spending quite a bit of money. However, some people refuse to go anywhere without travel insurance. Travel insurance is one of the most profitable ways for an agent to make their money. Travel insurance could help you in tough times, like providing you compensation for lost baggage or paying for a missed connection if you didn’t get to the plane in time. Agencies will reward employees who can sell insurance coverage. This commission is often much higher than hotels or cruises. Don’t be surprised if you go into a travel agency and you’re pushed to buy travel insurance.
Mark Up
It’s very much a secret for travel agents, but they have a tendency to buy low and sell high. If there is a popular game or trip coming up, an agent will buy tickets early so that they can sell them again at a higher cost. For example, if a plane ticket costs $800, a travel agent may very well charge their client $900 to $1,000. This practice may seem untrustworthy, but this price may still be lower than what an individual can get on their own through airlines.
