How do you guys get paid?
This is among the top of the list that people ask us on a regular basis. So here, in a Travel Tales exclusive, I will fill you in on the deep dark mystery of how a travel agent creates revenue.
Once upon a time, any travel supplier worth their salt paid travel agent commission. Airlines, hotels, car rental agencies, tour operators, cruise lines...really anyone who could look themselves in the mirror and refer to themselves as a part of the travel industry paid a travel agent a commission to bring them business.
Then, in about 1991, those bluebirds of happiness otherwise known as The Airlines decided that they needed to reduce costs. The brains of the operation decided that the best way to do that was to cut the commissions paid to travel agents. There are those who would say that the airlines decided this in a secret closed door meeting involving several of them. In fact, there were lawsuits that alleged just such a meeting.
Long story short, the airlines no longer pay commissions to travel agents. When a travel agency (or even a website owned by an entity other than an airline) issues an airline ticket they must now charge a service fee. Heck, the airlines themselves are even charging pretty hefty service fees for talking to a human agent. (American Airlines was at $15.00 last time I checked.)
Tour operators and cruiselines do still pay agent commission. This is where the bulk of our revenue comes from. Each agency operates differently though, so there are wide variations. We made the conscious choice to shift entirely to vacation travel, away from corporate travel.
Service charges are a growing part of our revenue, however. We offer a service that not many agents are qualified to provide. More and more people are traveling in Europe independently. By independent, I mean that they are not going on the bus tours that have been so popular for so long. They want to fly over, stay in hotels and travel between cities by various means. They want to have someone with the knowledge and expertise to help them navigate planning such a trip. I have that knowledge and experience. I charge $50.00 per hour for consulting on such a trip. I can do as much or as little as someone needs. I can plan everything from soup to nuts...or I can just fill in the parts that the client needs help with.
So there you go. Mostly we make commission from cruiselines and tour operators. For some types of work, we may also charge the client directly.
Now you have the inside scoop.
Once upon a time, any travel supplier worth their salt paid travel agent commission. Airlines, hotels, car rental agencies, tour operators, cruise lines...really anyone who could look themselves in the mirror and refer to themselves as a part of the travel industry paid a travel agent a commission to bring them business.
Then, in about 1991, those bluebirds of happiness otherwise known as The Airlines decided that they needed to reduce costs. The brains of the operation decided that the best way to do that was to cut the commissions paid to travel agents. There are those who would say that the airlines decided this in a secret closed door meeting involving several of them. In fact, there were lawsuits that alleged just such a meeting.
Long story short, the airlines no longer pay commissions to travel agents. When a travel agency (or even a website owned by an entity other than an airline) issues an airline ticket they must now charge a service fee. Heck, the airlines themselves are even charging pretty hefty service fees for talking to a human agent. (American Airlines was at $15.00 last time I checked.)
Tour operators and cruiselines do still pay agent commission. This is where the bulk of our revenue comes from. Each agency operates differently though, so there are wide variations. We made the conscious choice to shift entirely to vacation travel, away from corporate travel.
Service charges are a growing part of our revenue, however. We offer a service that not many agents are qualified to provide. More and more people are traveling in Europe independently. By independent, I mean that they are not going on the bus tours that have been so popular for so long. They want to fly over, stay in hotels and travel between cities by various means. They want to have someone with the knowledge and expertise to help them navigate planning such a trip. I have that knowledge and experience. I charge $50.00 per hour for consulting on such a trip. I can do as much or as little as someone needs. I can plan everything from soup to nuts...or I can just fill in the parts that the client needs help with.
So there you go. Mostly we make commission from cruiselines and tour operators. For some types of work, we may also charge the client directly.
Now you have the inside scoop.
posted by Catherine Banks at 9:19 PM
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