how do travel agencies make money

How Do Travel Agencies Make Money?

Believe it or not, travel agencies are still around. Although their look has definitely changed a lot over the last few years.

After a time of crisis, around 2013. Travel agents’ sort of reinvented themselves according to the changes that were happening in the society and traveling market.

Today, you would probably see less storefront travel agencies along the street, but this isn’t because travel agents’ have stopped working. It’s because more and more of them have started working from remote.

That’s right, being a travel agent can be a great online activity. But how do travel agencies – whether they have a storefront or not – make money?

Well, different sectors of the travel agency field makes money in different ways. In this article we’re going to see how the 4 main types of travel agents’ can earn money from their activity.

Leisure Travel Agents

Leisure Travel Agents are the ones you probably think of when you think of a travel agency.

They sell high-ticket products, such as vacation packages and cruises, and receive a commission on the sales they make.

Other than sale commissions, it’s becoming more and more common among leisure travel agents’ to charge their clients consultation and service fees.

While some charge a non-refundable fee for consultations, other agents’ are hesitant to charge fees. Some may get around this problem by applying a fee to the booking when it’s made.

Corporate Travel Agents

Corporate Travel Agents main source of income is airline tickets.

Commissions on sold airline tickets were cut down around 2010, so, to offset the loss. Corporate agencies also implemented a service fee when they book tickets for clients.

Corporate travel agencies also earn commissions from booking cars and hotels for business travelers.

Custom Itineraries

Organizing tours around Europe, cruises or trips through the Dolomites can be complicated.

Travel agencies can build these type of Itineraries for you. They call this a FIT trip (Flexible Independent Travel), and it’s basically a custom itinerary.

Agencies usually charge higher consultation fees for this type of travel. Nevertheless, fees aren’t the only source of income for FIT travel agents’. They may also have the opportunity to make money through commissions from the vendors they are booking for their clients as well.

Big Travel Agencies

We call a big travel agency a company that has tens of millions of dollars of sales in revenue. Travel agencies like these are only 1% of all the travel agencies in the world.

While most agencies earn commissions on their sales. These big agencies earn overrides
based on their revenue. These overrides can come from many types of vendors including airlines, cruise lines, tour operators, car rental companies etc…

Apart from the type of travel agent calls your name.

The steps in which your travel agency works to make money are basically the same:

  1. A traveler gets in touch with you. According to their need and desires, you finalize their itinerary.
  2. You book the various vendors for the traveler (flight, hotel, car, tours…) and give the vendors your accreditation number. When considering affiliate marketing, this can also be accomplished through your affiliate links. As we’ve seen before, you may also charge the traveler a separate consultation or service fee for finding the best vendors for their trip.
  3. Each vendor should then recognize your travel agency through your accreditation number or affiliate link. This way they can acknowledge the commissions owed to you.
  4. The commission is paid. In most cases, you will be paid after the client has completed their travel.

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