The travel industry has been booming for a very long time now and it continues to thrive due to the fact that people love to travel. Traveling has become a lot more affordable than before, making it easier for more people to partake in it. This has created a wide range of opportunities in the travel sector. The motivating factor here is that if you are someone who loves to travel, this a great way to combine your interests with business. Online travel agencies are the evolution of the travel industry. This has made it very simple for any individual to start their business from scratch.
Online travel agencies allow anyone to make and confirm their travel plans from home itself. A lot of people have started looking into entering this market and becoming an independent travel agent. When a person thinks of joining the travel industry, the first question that comes to their mind is, “How to make money?” There has always been a lot of curiosity about how exactly do travel agents get paid. So, let’s get right to it.
What Does A Travel Agent Do?
It is better to understand what a travel agent actually does before we get into how (s)he gets paid.
Walking into a travel agent’s office or getting onto their website is like walking into a jewelry store. The travel agent will have all kinds of services in store and will give you a customized deal based on your specified requirements. The travel agent would first ask you what is it that you have in mind and will then suggest the best options after looking it up with a different supplier they would quote the best rate considering various factors. They will pick the best deals suitable to your choices. Online travel agents generally have tie-ups with airlines and hotels, that help them get the best deals for their customers.
How Do Travel Agents Get Paid
Now that we have understood what work online travel agents do, we can proceed to find out the ways in which they get paid.
In the past, before the travel industry became a part of the internet, a large amount of a travel agent’s commission came from the airlines. Since tickets were expensive, in demand, and could only be issued by agents or the airlines, they were the livelihood of any agency. The commissions from hotels, cruise lines, etc. were just icing on the cake. However, the airline commissions were cut off in the 1990s; now everyone could access the tickets themselves. The consumers and businesses started relying on the internet that disrupted the traditional travel agency market. Since then commission models in all segments have had a noticeable change.
Commissions form a big part of a travel agent’s income. When a consumer books a flight, through a travel agent, a small percent of the cost of the flight will go to the travel agent as commission. The same applies to hotels and tour bookings. Generally, a travel agent will make around 5% to 15% on a booking. A larger commission is offered to a travel agent who sells products like cruises and vacation packages. These commissions are paid by the tour operators, hotels and cruise operators.
2. Service/Convenience Fee
A service fee is another source of income for a travel agent. Some travel agents charge this service fee which is added to the total price of the service offered. This is similar to a consulting fee that you would pay for getting any kind of advice. Travel agents have connections at airlines for better seating and upgrades, they know hotel managers who can provide the consumers with good rooms at better rates, they know destinations and can make sure that appropriate transportation has been booked in advance. Thus, certain agents tend to charge a service fee, for providing all these services for the consumer’s convenience.
At the same time, there are travel agents that do not charge a service fee and are content with the commissions they receive. After all, today’s travel arrangements are based on flexibility, convenience, and affordability and creating a long-standing client base, which helps the travel agents in acquiring a loyal consumer base.
3. Elite Services
Though this is a lesser-used option, some travel agents tend to offer additional services like VIP Airport Transfers, Lounge Access, and hassle-free baggage clearance. Though the services may seem to be owned by these agents, they usually have contracts with service providers wherein they earn commissions for every referral, and yet the branding remains of the travel agent. These services attract the consumer to get their travels planned by these travel agencies and end up paying a lot more than intended.
These are a few ways an online travel agent gets paid. The travel industry is a large ocean filled with opportunities you decide to take up. So are you ready to start earning as an online travel agent? Opt-in for a free consultation today and one of our customer success advisors will connect with you.