How do travel agents get paid?
Ok… I’ll be honest. Most people don’t actually ask, but I KNOW you want to know! Money may be seen as a “taboo” subject, but I always strive to operate with transparency, and one thing I have learned over the years is that most people don’t understand how travel agents get paid. I always wondered that myself before I became one!
In truth, there are a few different answers:
1. They may receive a commission from a supplier.
If a travel agent is using a tour operator/supplier to package together your itinerary, that supplier may pay them a small commission, depending upon their relationship with the travel agent and the annual revenue the agency does with that supplier. For this reason, “small business” travel agencies like my own often operate within a larger host agency that is essentially like a union of travel advisors working together. This way, we get access to the best suppliers for you!
That does NOT mean that if YOU were to book with that supplier, you would pay less. Nope – often, the supplier/travel company just keeps the “commission” they would otherwise pay that agent, even though you are then stuck planning your own vacation! (Think cruise ships, group tours, theme park packages, and the like.)
2. They may charge a service or planning fee.
Especially if a travel agent is putting in the research, time and expertise to piece together different components of your travel themselves (what we call a “FIT” or Flexible Independent Travel itinerary), they may charge a service fee, and many have published service fee structures. That fee can be dependent upon the complexity of your trip, how many different cities / destinations you are visiting, and how many excursions / components there are to consider.
For example, I often build FIT itineraries for my clients who want to go to Italy because I know the country really well, I LOVE traveling there, and I can typically save them money (even considering the service fee) than if they booked on their own or I used a supplier.
When you pay a service / planning fee, it is because you are working with a professional! That service fee honors the time, money, research, experience and training that the travel agent has put into growing their expertise for you.
3. It is often a combination of both.
For a variety of reasons – including lower commissions, degree of niche expertise, and high-touch service, among others – travel agents often charge a service fee and may also receive a small commission from the supplier(s) they are booking. Otherwise, it may not be a wise business decision to take on your trip. As with every business profession, time = money.
In short, a travel agent has to evaluate the expected time, expertise, research, and development that your itinerary will require; determine how to best serve you and with what suppliers / components; and, if agreed upon, be willing to serve you and manage your trip before, during, and after travel. When you are paying a service fee, your travel agent has a responsibility to make decisions in YOUR best interest.
Ready to start planning your Next Adventure? Click the button below to get started!
animal kingdom Cancun Caribbean Disney Disney Cruise Line Disney Springs Disney Wish EPCOT Europe Fastpass fast passes Florence germany grandparents hawaii hollywood studios honolulu ireland Italy kansas city Magic Kingdom maui mediterranean Mexico missouri molokai Oahu packing tips planning restaurants Riviera Maya Romance Travel Rome Scotland teenagers travel tips travel with children travel with teens tropical vacation United Kingdom universal orlando Universal Resort Venice Walt Disney World Yucatan