A travel agent’s job is rewarding – watching families, couples, or friends embark on the adventure of a lifetime. But it takes a lot of hard work and determination to get to where you can live off of your earnings.
How do travel agents actually make money?
Stick with us as we explore how travel agents get paid to do what they love!
How do travel agents get compensated, and who pays them?
Many new travel agents often start out by working for a host agency. Their host is partnered with suppliers like hotels, cruise lines, resorts, airlines, and transportation services.
When you join a host agency, you have the benefit of earning higher commission levels. You’ll be provided with credentials and a list of their preferred suppliers so you can begin planning and booking vacations for your clients.
Once your client has gone on their vacation, the supplier pays your host agency a pre-negotiated commission. Your host then pays you or your business a percentage of this amount, based on the membership plan you have with them.
Before a travel agent can get paid, though, they need to submit documents (like a reservation confirmation) detailing their client’s bookings. This tells the host company the vacation is legitimate, not a fabricated story to earn money.
Sheila’s recommendations: If you are searching for a host agency or would like to make a switch, we recommend checking out Host Agency Reviews. Remember though, that not every host is listed on their site. Some of the smaller and more hands-on host agencies may be better suited for you, such as Trips & Ships Luxury Travel, a boutique agency for the aspiring luxury travel agent, and Pickles Travel Network, whose founder built her business under the guidance of renowned travel training coach, Cyndi Williams of Careers On Vacation.
Some travel agents decide to venture out on their own. They apply for Seller of Travel credentials, an IATA, CLIA, or TRUE number. The downside of not being under a host agency when starting your travel business is that you must negotiate your commission levels with each supplier. Oftentimes, your commission is lower since you do not have the volume of business a long-standing agency or a host may have. However, there are ways to boost your commission level to 20 and even 30 percent. Tammy Levant of Travel Agent Success Kit (TASK) program teaches her proven methods for maximizing profits throughout the year.
Travel agents also earn money by charging planning or research fees. These fees cover the time you spend on researching or planning an itinerary for a client. It’s a great way for you to make sure your time stays valuable, and you aren’t working for free.
Now that you understand how travel agents get paid and who pays them, let’s explore how much money they make.
How much money do travel agents make?
It varies widely. Some travel agents only make around $10,000 every year while others can make a cool $100,000 on a few bookings alone.
According to the US Bureau of Labor Statistics, a travel agent’s median earnings are around $44,000. Definitely nothing to sneeze at!
As someone who started out small, Travel Industry Solutions’ founder, Sheila Folk, says that she made nearly six figures during her first year. After streamlining her process, focusing on customer service, and attracting her ideal client, she steadily built her personal book of business to millions a year and now realizes a steady six-figure income.
Anything is possible when you put your mind to it!
You may be wondering: How do I actually earn that much? Keep reading to find out!
9 Ways Travel Agents Make Money
Travel agents make money in a variety of ways.
For many, much of their income is from commissions, but there are other ways travel agents can get paid.
Who doesn’t want to earn more money? Let’s find out how you can make more today with just a few tweaks to your business plan:
As we already mentioned, earning money from your commissions is by far the most common strategy for any travel agent. How much will you receive for the different kinds of travel services out there?
One cardinal rule is specialization. The more you can give your client a unique experience by utilizing your resources and area of expertise, the more your services are worth.
- Specialized Travel
If you’re an expert at planning unusual vacations or visits to exotic destinations, you can market your services to clients who are looking for something out of the ordinary. Another possibility is to specialize in a particular type of travel, such as cruises or business travel. By becoming an expert in a specific area, you’ll be able to offer your clients better service and advice.
3. Cruise Lines
Some cruise lines offer some of the highest commission rates, particularly if you are under a host agency or book a large volume of trips with one or two cruise lines. These types of vacations are popular among groups, couples, or families and require less time to book than a multi-component land package, making this an important earning machine. And, when you focus on luxury cruising, you often have customers who become brand loyal. These customers tend to sail with their preferred cruise line multiple times per year.
- Airline tickets
While airline tickets don’t pay as much, and sometimes not at all, they are in high demand right now as travelers aren’t sure where, when, and how to book flights. Crazy price fluctuations, canceled flights, and lack of staff have made the process even more difficult. That’s why offering flight-planning services can be another source of income, particularly if you charge ticketing and change fees.
This leads to our next point: fees for your services.
- Service Fees
With travel becoming more confusing and complex, travelers are searching for a travel agent who can manage their plans for them. Charging service fees or “planning fees” can help offset the extra time you spend on a customized itinerary. Just remember this isn’t the time to get greedy. You’re here to help travelers while you make money. Make sure your service fees are reasonable for the time you spend on creating an itinerary or putting together flight price comparisons. Also, it’s important not to set your fees too low or base them on what others are charging. Remember, what you bring to the table is different from the travel advisor down the street.
- Custom Itineraries
An adventurous couple wants to trek through Peru’s Andes Mountains to see Machu Picchu. A family would like to bike through the tulip festivals in Holland. An elderly couple dreams of birdwatching in the Amazon. These customized itineraries are excellent ways to earn a little extra commission. Going out of your way to organize a custom journey not only earns you more money but also helps build trust and loyalty among your clients.
- Travel Insurance
Travelers have learned to appreciate the safety net of travel insurance after the onslaught of a massive global pandemic. With canceled vacations everywhere, travelers lost millions of dollars. Travel insurance gives your clients (and yourself) the added peace of mind that their vacation is safe. Most travel insurance companies offer 20 percent or higher commission levels for any insurance purchased, making this another way to bolster your earnings.
- Car rental
The family looking to go on a self-guided tour of Italy wants to make sure they get a nice car for driving around. You help them find the perfect sedan – an automatic, not a manual! You can earn money from packaging car rentals with your clients’ vacations.
- Group Travel
Multigenerational families want to get away during the summer and escape the hustle of school activities and everyday life to spend time with each other. A group of couples would like to experience a romantic river cruise among the medieval cities of Europe. Friends are looking for a weekend getaway to the beach to deepen their tans as well as their friendships.
After reading about all the amazing things a travel agent can do, are you still wondering if becoming a travel agent is worth it?
- Corporate Travel and Incentive Travel
Corporate travel advisors provide a valuable service to businesses by helping them plan and book corporate travel. They work with businesses to understand their travel needs and preferences, and then help them find the best deals on flights, hotels, and rental cars. Corporate travel advisors also help businesses manage their travel budgets and keep track of their expenses.
Incentive travel is when a company offers a travel incentive for when the business meets certain goals. It could be a corporate sponsored meeting or a short trip to reward certain goals. Your travel agency can take advantage of these business retreats by booking the employees hotel rooms and everything they’ll need.
Is it worth it to become a travel agent?
Travel agents make a huge difference in the travel world. They make people happy – from booking unforgettable vacation packages to giving travelers peace of mind.
It feels good to make people happy, but you DO have to pay the rent and get groceries.
Asking how much travel agents get paid is a great question and one every potential business owner needs to ask.
Will this business venture be worth it for me?
The answer lies with you.
Are you ready to put in the time, energy, money, and forethought into “making it” as a travel agent?
The industry is lucrative, but you’ll need to consider if it’s worth it for YOU.
As the only online hub with everything a travel agent could ever need, Travel Industry Solutions is happy to help you find answers to all of your questions.
Are you a travel agent hoping to scale your agency like Sheila did? Join our membership program where you’ll have access to our travel agent training, live Q&A webinars with Sheila, templates for literally everything, and legal documents to protect you from lawsuits.
Don’t wait to begin your journey toward becoming a travel agent – take advantage of our free blog resources or contact us with questions.
We’re here for you!