How do travel agency work

Where there was once a worry that there wouldn't be any travel agents to fill the shoes of those that were retiring, we now have an influx of new blood, eager to take advantage of the flexibility and travel opportunities a travel agent career provides.

Did you catch that?!? Travel agents are no longer in danger of going extinct. A big reason for this new influx? The rise of the agent that works remotely. They may be harder to see without a storefront, but this new segment of the industry is now a force to be reckoned with! By and large, the most popular agency model has switched from the storefront agencies of the past, to the remote agencies of today.

The travel agency business model both corporate and leisure is moving to become less dependent on commissions. Why the change? The easy answer is that commissions from airlines and other vendors are lower than in the past.

They're not gonna catch agencies off guard again! So how do travel agents make money in a world where their commissions are lower? One travel agency solution to diminishing commissions was to diversify their income and begin charging fees. This helped agencies steer away from complete reliance on vendor commissions, helping them pad a bottom line that was once cushioned by generous airline and vendor commissions.

Along with the loss of airline commissions, travel agents face the challenge of many major cruise lines' non-commissionable fees NCFs. Yup, it's self-explanatory: They're miscellaneous fees that are not commissionable. Okay, before we go into things, it's important to understand that different sectors of the travel agency field make money in different ways.

To make it easier, we've broken down the question of how travel agents make money into 4 main types of travel agencies: corporate, leisure, custom, and 'the big players'. Airline tickets are the lifeblood of corporate agencies.

Not selling airline tickets after commission cuts was out of the question. To offset the lower airline commissions, corporate agencies implemented a service fee when they booked a ticket. In addition to air, corporate travel agencies earn commissions from booking car and hotel for business travelers. So how much are corporate travel agencies charging?

After the commission cuts, many travel agencies shifted to selling high-ticket products that still paid travel agent commissions—essentially, vacation packages and cruises. Nowadays, these are your leisure travel agencies—the ones you probably think of when you think of a travel agent.

Generally, leisure travel agencies' main revenue is from commissions vendors pay on vacation packages, cruises, air and other add-ons. However, consultation fees and service fees are becoming more common as agencies try to diversify income sources to become less dependent on supplier commissions.

If you're wondering how many travel agents make money by charging a fee, you'll want to take a peek at our you can find HAR's complete fee survey archive here! Charging a fee helps agents boost their bottom line and discourage 'tire-kickers' price shoppers. For agents hesitant to charge fees, some agents implement a 'look-to-book' fee—an up-front fee for research, which is applied to the booking when its made.

Some agencies charge a straight up non-refundable fee for consultations. You can see more info on the graph below! Mass market trips like cruises, all-inclusive resorts, or group bus tours around Europe aren't for everyone.

When you want an itinerary built just for you, travel agents call that an FIT trip Flexible Independent Travel — in plain-speak, you'd call that a custom itinerary. But why be simple like that when you could come up with an acronym, right?! Custom itineraries are more time intensive and may involve booking places that don't pay travel agent commissions.

Productive relationships are built on honesty and your relationship with your agent is no different. Before your consultation, you should have a general idea of the maximum outlay you're expecting to pay for your trip, or at the very least, a range. Otherwise, your agent is stabbing in the dark.

I had a young man come into my office once with a vague idea about a private island in the South Pacific for his honeymoon. He proudly proclaimed that "money was no object", which any travel agent knows isn't true for virtually every one of their clients. For his chosen destination, we went through some options for ten-day honeymoons that priced comparably with a mid-range luxury automobile before he sheepishly admitted his budget was closer to the high four figures. That pretty much canceled out his originally planned destination, but the couple ultimately enjoyed a lovely luxury resort on Bora Bora that was well within their means.

A happy ending, but had he been forthright about his budget, it would have saved time and embarrassment. Online airfare searches have become sophisticated to the point to where it's rare an agent can do better searching on their own, and any savings could well be negated by a service fee. While visiting an agent to see if they can do better than an online airfare search is likely a waste of time, there are exceptions.

One would be complex international itineraries involving multiple stops. Some travel agencies have access to consolidator or bulk fares which are not published. Consolidators pay bulk rates to airlines for large blocks of seats at a significant discount, which they sell to travel agents who resell them to consumers at a competitive markup.

They can be hit-or-miss, but they're worth checking. The New York agent who told me about Norwegian Airlines belongs to a competitive consortium of more than 8, agents called Travel Leaders Group , which similarly negotiates collective benefits. Signature Travel Network is another high-end collective of agencies, and Travel Savers is the other major one.

All of these associations have some excellent travel advisors within them. But having covered the luxury travel space for years, it seems that virtually every top advisor and agency I come across, the ones my friends, family and colleagues recommend, belongs to Virtuoso , as do all of the agencies mentioned in this piece besides the one in Travel Leaders. I just visited an amazing new luxury hotel in Italy, and they were quick to boast about having been admitted as preferred Virtuoso property - to them it was a mark of quality like earning a Michelin-star.

They know everyone and totally set up an amazing itinerary and I ran with the bulls. In Italy, Virtuoso has an amazing local company called IC Italian Connection Bellagio that is totally wired into all the kinds of local things travelers say they want these days, special experiences, the best restaurants, art tours of private villas.

It's better in Business or First Class - especially when you get a bargain. But in a couple of other cases, buying your air through an agent can actually save you money, or miles, or both. One case is when you are buying premium class tickets, Business, First or some of the even higher new classes. I have an extremely tech savvy friend in San Francisco who wanted to fly First class to Hawaii for his honeymoon, and even though he could afford it, he was shocked how much the airlines wanted.

I suggested he call McCabe World Travel, and he was mystified how they could purchase the exact same tickets for about two thousand dollars less -each - than the best price he could find online, by calling the airline, or through the American Express Platinum Card travel desk. Not surprisingly, years later he still uses McCabe for all his travel. Consider this: the agency has three advisors in its air travel department who do nothing else, among its roughly 50 affiliated advisors.

When it comes to using miles, or miles and money, or just paying to fly in pricier premium classes, you might have trouble believing the miracles these specialists can work. They wanted to use frequent flyer miles, and I knew that they also had Dubai on their Wanderlist. I was able to change their flights from Business class on Qantas to First Class on Emirates - for half the mileage.

We were also able to add a stopover with a wonderful desert and shopping experience in Dubai, checking two destinations off their list for a fraction of the cost. I use SmartFlyer for tricky tickets. Despite its name, it is a well-known, full-service luxury travel agency that does everything from safaris to cruises, but where they are better than just about everyone else is creative ticketing.

I hear endless complaints from frequent fliers about the difficulty using miles, but I have found that is not the case - if you use a mileage and ticketing expert. This was less than a third of the miles United directly quoted me for the same trip when I called the MileagePlus Elite desk, and I ended up getting more than three times the dollars per mile that most experts value frequent flier miles at.

Sometimes, this means hundreds of dollars in savings per ticket. Better Trips! At the end of the day this is the bottom line, the big win you get with a good travel advisor. They plan a better trip and then provide a safety net. Having a top travel agent can make you an instant VIP, certainly will save you time and hassle, and quite possibly money.

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