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Travel Agent Resources

How Do Travel Agents Make Money?

By Courtney Eisen

February 22, 2024

So, you're considering a career as a travel agent and wondering how you can actually make money. What are the options available to you for maximizing your revenue? In this article, I will delve into the good, the bad, and the ugly of how travel agents earn their income. Please note that this article does not cover travel agents in salaried positions, as that is a completely different scenario. If you are seeking information on that topic, I recommend consulting resources like Glass Door for location and company-specific data. Furthermore, this article offers a unique perspective on earnings compared to what you might find elsewhere online. Our agents, in particular, earn exponentially more than the average, so this is not your typical or "average" perspective. Now that we have clarified these points let's dive in!

A Brief History Lesson

If you have been researching this topic, you have likely come across various resources discussing the milestones and challenges faced by travel agents, which eventually led to the introduction of charging fees. These challenging times for travel agents began in the 90s when airlines became less supportive of the travel agent community. With the emergence of Online Travel Agencies (OTAs) like Expedia and Priceline, airlines relied less on travel agents and significantly reduced or even eliminated commission-earning opportunities. The struggles continued with major world events such as 9/11 and the COVID-19 pandemic, which caused turmoil among travelers. However, it is worth noting that agencies like ours have chosen not to adhere to outdated philosophies, further disrupting the industry for standard agents and agencies. These difficulties prompted agents to seek additional compensation for their time and explore ways to diversify their earnings. The most common solution that emerged was the introduction of fees. In fact, if you read other articles on this topic, you will find that fees are often mentioned and encouraged. However, at our agency, we take a different approach. We not only discourage charging fees but actually have a company-wide ban on them. Any agent caught charging a fee to a client is promptly removed from our agency. Why is that?

First and foremost, we prioritize training our agents to be efficient. We teach them how to create well-thought-out, high-quality itineraries quickly, typically within 15-45 minutes. Instead of recreating the hotel's website in the form of a PDF, we utilize a more concise bullet-point format with links to the different properties. We also provide training on lead qualification. While it is true that some "tire kickers" may still approach us, the minimal time investment allows our agents to avoid losing sleep over potential "wasted time."

So why are we so strongly against charging fees? Many agents become upset when I explain this crucial point. In fact, we have been banned from numerous agent groups for expressing our views. Here's the truth: charging fees will ultimately result in lower earnings. To illustrate this, let's look at the numbers. Most agents do not earn substantial amounts of money, even when considering the highest estimates for experienced full-time agents, which still fall below six figures. On the other hand, our founder earns seven figures without charging fees. Perhaps we are onto something? While we do not accept existing travel agents, our founder, David, mentored a peer during his time at Andavo Travel. Under David's guidance, they stopped charging fees and made a few other process changes, resulting in a tenfold increase in earnings—from $25,000 to $250,000 per year. Why is that? Well, let's use common sense for a moment. Charging a fee makes you less desirable, less accessible, and more likely to lose clients to agencies like ours or booking sites. This brings us to the core of how travel agents truly make money—commissions.

Commissions: The Real Path to Earning

Yes, commissions are the primary source of income for agents. On average, agents earn between 10% and 20%, with the average commission rate hovering around 13%, on what they sell to clients. Consider a small booking of $5,000, for example. This would result in a minimum commission of $500. Completing such a booking within 15-30 minutes translates to an hourly income of $1,000 to $2,000. How is that not enough? Why would you risk losing that income by charging a fee? The issue lies in being a slow agent, which significantly reduces your earnings per hour. Now, imagine handling an ultra-luxury booking where the client spends $10,000 or more per night or a group booking with hundreds of rooms. In these cases, you have the potential to earn tens of thousands of dollars per hour, propelling you to six or seven figures in earnings much faster. While speed is important, here are some additional tips for increasing your income as an agent.

Suggested Article: Travel Agent Commissions

Be Available 24/7/365

You might be surprised to learn that many travel agents, even those who position themselves as industry insiders and experts, adhere to strict office hours. Remember the OTAs I mentioned earlier, such as Expedia? They offer immediate satisfaction to customers. Agents with limited availability cannot provide the same level of instant gratification and are, therefore, less desirable. I have encountered agents on forums who schedule new clients a week after their initial contact. During that week, clients may decide to handle the booking themselves as they witness flight prices fluctuating, usually increasing.

If you truly want to maximize your earnings as a travel agent, take this advice to heart: do not follow the path of other agents. Be modern, be smart, and be available. You may need to step out of a movie theater to assist a client, but the inconvenience can result in hundreds or even thousands of dollars. Do not keep your clients waiting. Be there for them when they want or need you, and you will become an important and reliable figure in their lives, ensuring their return time and time again.

Know the Markets

To understand how much agents earn per hour, we must consider efficiency. Familiarize yourself with your network and identify the markets that are important to both potential and existing clients. If you frequently handle trips to Mexico, for instance, you should have a solid understanding of the best properties for families, budget-seekers, luxury travelers, and adults only, among others. Having a general knowledge of hotels in popular markets will not only save you time but also provide your clients with a better and faster experience. The ability to quickly match clients with suitable properties is crucial for increasing client satisfaction and earnings per hour. However, you cannot achieve this without the next item on our list—listening to your clients!

Listen to Your Clients

Allowing your clients to express themselves will ultimately lead to higher earnings. How? Well, people will tell you exactly what they want if you give them the chance. The more you let your clients speak, the better you will understand their priorities and true desires. This understanding enables you to transform their vision into reality—a rare and beautiful achievement in the realm of travel. Once clients realize that you have turned their dreams into reality, they will return to you for their next trip. In a world filled with an overwhelming amount of information, where travelers grow weary of sifting through fake reviews, doctored images, and endless listings, you become a human-computer of sorts. You listen to your clients and swiftly match them with the perfect property in a matter of minutes. Recognizing this as your ultimate goal will significantly increase your income.

Ask for Referrals

This brings us back to the beginning. Travel agents attempted to diversify their income streams by charging fees, but this approach does not make sense in reality. To earn more money and better weather unexpected global events, it is more logical to diversify your client base. Achieving this requires actively seeking referrals. The travel industry thrives on word-of-mouth marketing, so gaining 2-3 new clients from existing satisfied clients is the most effective way to rapidly increase your earnings. Eventually, if you consistently deliver excellent service, you will be referred to ultra-high-net-worth individuals, where substantial profits can be made. We have witnessed bookings as high as $600,000 for leisure trips, resulting in a $60,000 commission from a single booking. I hope you see where I am going with this. When you have a diverse set of clients, you will be able to weather any storm. Guess who still travels during a financial crisis? Wealthy people. Need a boost in April? Your middle-class clients will be booking trips when they get their tax returns. The correct response to keeping earnings steady is not "diversifying" your income through fees but diversifying the markets you serve, which can also be done through the next step -- sell everything.

Sell Anything and Everything

You would be surprised how many agents limit their earnings by keeping their services in a niche. Some agents only sell Disney, Royal Caribbean, and Sandals. I have personally met agents who only sell international bookings. There are so many odd niche agents out there, and every time I see someone following this strategy, usually encouraged by their host agency, I ask myself, "Why?" Why would you want to pigeonhole yourself into one space? If you have a client, why not be the go to for all of their travel needs? It seems like common sense, but so many hosts encourage specialization. If you really want to maximize your income, you will find yourself booking a Royal Caribbean cruise one day and a Rosewood Hotel the next. Make your name synonymous with travel. Be the go-to for travel. Don't brand yourself as a Disney or Cruise agent. Do it all.

In Conclusion: Ignore the Noise and Make Money

To sum up, if your goal is to earn six or seven figures, joining a host agency like ours that genuinely cares about your ability to earn commissions is crucial. Our travel agent training is free, and we cover your errors and omissions insurance and licensing fees. This means that we actually incur a loss for each new recruit until they start generating sales. We will not teach you outdated and inefficient "best practices," such as charging fees or making 20-page PDFs. Instead, we will provide honest guidance, resources, and mentorship to help you understand how to truly make money as a travel agent. It is not a get-rich-quick scheme; it requires hard work and the ability to ignore advice from agents who do not earn significant incomes each year.

If you do not aspire to earn much, then by all means, follow the resources that advocate for charging fees. However, if you want to maximize your earnings, join a host agency like ours that is willing to invest in your success.

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