How Do Travel Agents Make Money?

How Do Travel Agents Make Money

Service Fees — A travel agent makes money by charging fees for separate elements of travel. For example, instead of charging a commission for booking tickets with airlines or hotel rooms, travel agents earn money by charging a service fee for each booked part.

Can you make a living as a travel agent?

Katelyn O’Shaughnessy was a luxury travel agent before founding travel agent platform TripScope and, later, medical tourism company Doctours. Erina Pindar has worked as a travel agent for 13 years, and she’s currently the managing director of SmartFlyer, a travel agency based in the U.

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How profitable is a travel agency?

When travel agents close out their books for 2014, they expect to net their highest profit margins in more than a half dozen years. That’s one of the key findings in a new report released jointly this week by ASTA and Travel Market Report. The exclusive report––Making Tough Business Decisions: Indispensable Research for Measuring Travel Agency Success––provides an indepth look at key metrics in the agency industry, giving retail travel sellers a yardstick against which to measure their own businesses.

  • The report represents the first time ASTA has consolidated the most significant findings from the benchmarking surveys it conducts throughout the year with a panel of members
  • (See sidebar
  • ) More than 80% of all travel agency sales are made through ASTA members, according to the association

Profits are upMaking Tough Business Decisions paints a comprehensive picture of the health of the travel agency industry. This year the industry is the strongest it’s been in years. Nearly nine in 10 agents (88%) expect to end 2014 in the black. ASTA agents project an average profit margin of 9% this year, up from 7% in 2013 and from a recent low of 6% in 2010.

  • Retail leisure agencies anticipate the healthiest margins this year, at 10%
  • ASTA defines retail leisure agencies as companies with employees that do more than 70% of their volume in leisure sales
  • Independent agents, including one-person agencies and independent contractors, expect to net average profits of 8% in 2014

Corporate agencies, those reporting 70% or more of their sales in business travel, project 7% profit margins. HighlightsOther highlights from the report include:Agent productivityAmong other findings are data on the sales and revenue productivity of frontline agents, a critical factor in agency profitability.

In 2013 full time frontline travel sellers in leisure agencies booked an average $714,077, yielding per person revenues of $90,717, or 12. 7% of sales. Revenues include commissions, overrides, markups, service and transaction fees, and GDS incentives.

Full time independent agents and independent contractors sold less than half as much travel, an average $388,684, yielding revenues of $47,502, or 12. 2%. Corporate agents booked much higher volume, an average $1. 11 million per agent, but the percent yield on those sales was much lower, an average $90,713, or 8.

1%. Corporate challengesCorporate travel’s lower sales-to-revenue ratio can be explained by several factors including higher agency costs, especially for technology, and a business model based on transaction fees rather than supplier commissions, according to Melissa Teates, ASTA director of research.

Teates pointed out that corporate-focused agents serve clients for whom cutting costs is a top priority. By contrast, leisure agents «are dealing with people who are hoping for a good experience, and they’re probably generating more overrides and commissions because they’re upselling.

» Whatever their sales focus, «agencies of all sizes need to be aware that even if sales are going up, they need to make sure revenues and the bottom line are going up,» Teates said. Cruise commissionsMost leisure agents rely on a combination of supplier commissions and service fees to generate revenue.

In 2014 agents’ median commission earnings on cruise and tour sales are 12%, ASTA found. In all segments, commission levels have remained relatively stable in recent years, except during the recession years of 2009 and 2010, when cruise and tour commission levels dropped slightly, according to Teates.

Commissions on cruise sales are more likely to fluctuate than in any other segment. «Cruise seems to be the most volatile. If they have a factor go against them, like fuel costs go up, they try to pull money from distribution, not from the price,» Teates said.

Although agents are lately seeing healthier cruise revenues, many are hedging their bets by charging clients a fee for cruise bookings, she added. Today, 21% of ASTA agents charge an average fee of $41 on cruise sales. Highest service feesAgents charge their highest fees for FIT trip planning, the most labor-intensive part of the business.

More than six in 10 agents (61%) charge an average $118 fee for trip-planning services. That’s more than twice what agents charge for their next most-expensive services, booking tour packages and air-inclusive packages.

Forty-two percent charge an average $53 to book air-inclusive packages, and 23% charge an average $54 when booking tour packages. Those fees are significant when you consider that tour and package sales comprise the largest share of agents’ business, outpacing cruise sales as a share of volume by eight percentage points for both retail leisure agencies and independent agents.

Can you make 100k as a travel agent?

Want to travel the world but you’re stuck in a 9-to-5 with two weeks of vacation? There are jobs for which you can travel on your employer’s dime that pay over $100,000 a year. Travel publicist (VP or higher)Average salary: $116,000A publicist establishes and maintains positive relationships with the media, getting their clients placement in various outlets, from TV to magazines.

A travel publicist works for a hotel (or hotel chain), cruise line, airline or with an agency that represents travel-related clients. The longer you stay with an agency, the more you can make. The median salary for a senior level vice president is about $116,000 a year, according to jobs website Payscale.

com. Most travel publicists are required to travel for their job to pitch new clients, familiarize themselves with properties they represent, take journalists on press trips or to participate travel trade shows and conferences. Luxury travel advisorAverage salary: $100,000Before the internet, travel agents (as they used to be known) could do as little as book someone an airline ticket.

  • Now, travel advisors not only put together your trip, but they also provide a high level of service and advice, and manage your vacation time
  • Travel advisors are constantly on the road, especially those who specialize in luxury travel, where clients with big budgets want the advisors to really know the product via first-hand experiences
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A travel agent’s salary is about $36,654 a year, with an extra $6,000 for bonuses and commission. However, a luxury travel advisor (someone who only works with five-star travel and affluent clients) gets commissions for bookings by most every company in the industry, from airlines and tour operators to hotels and often restaurants.

They can make $100,000 annually after working for about two years, according to Jim Bendt, CEO of Pique Travel Design, especially if they have already traveled extensively and know luxury and have a personal network of high-paying travelers.

Hotel managerAverage salary: $105,000The hotel manager ensures everything about the hotel is running smoothly. They manage all aspects of the property including operations, staffing and customer satisfaction, and they’re mostly responsible for operational efficiency and profitability.

While the median salary for a hotel manager is about $105,000, those who work at a large, high-end hotel, especially in large, metropolitan cities, can make close to $200,000 a year. Jobs website Glassdoor shows a manager position at Rosewood Hotels & Resorts, a five-star hotel chain, has an average salary of $114,000 from $95,000 to $129,000.

Hotel managers are traveling often for meetings and conferences, hotel openings within the same brand and various events. With bigger companies, general managers are given the flexibility to change properties every few years, which can include international relocation.

  1. Director of salesAverage salary: $108,737A sales manager at a hotel is responsible for developing business through direct sales, marketing, direct mail and tours of the hotel, also driving sales revenue, which can be booking large-scale events and conventions at the hotel

They travel with the hotel by representing them in various events and exhibitions across the globe. Eventually, they can get promoted to director of sales, which manages the sales staff and works with revenue management while spearheading marketing strategies.

The average salary of a director of sales at a hotel is $88,116, with the additional cash compensation (including bonus and/or commission) of $20,621 per year, which comes to $108,737. If you’re managing business sales for an entire region, like all the hotel company’s hotels in one city or region (ie: all the Marriott hotels in New England), you can expect a higher salary averaging $117,440 a year with $56,729 additional compensation.

Airline pilotAverage salary: $137,330If you’ve ever dreamed about being the pilot of a plane, know it comes with a great salary: over $100,000 a year (up to $208,000 a year for major airlines). The median annual wage is a nice $137,330, according to the Bureau of Labor Statistics.

  1. Clearly, pilots get to travel, and they have opportunities to explore the places they fly into
  2. The airline they work for provides the pilot hotel accommodations, transportation to the airport and an allowance for meals and other expenses when they’re on assignment

Creative or art directorAverage salary: $133,000The medium annual salary for a creative director in the U. is $133,839, but it can go up to $200,000 on the higher end for those who have more experience and nab jobs at large companies. Directors who work in travel, like a hotel chain, for example, get the perk of traveling for their job, traveling to new hotel openings to determine the overall vision, working with designers, artists, copywriters and marketers.

Based on their knowledge of trends, design and advertising, they plan the advertising, oversee the creative process and, in most cases, they dictate the general ambiance and look of a hotel’s public spaces, like lobby and hallways, and often the guest rooms.

Creative directors can also work for cruise ships, airlines, bus companies and more. Traditionally, an art director executes on a hotel’s strategy, concept or idea that the creative director implemented. An art director can earn up to $104,000 (average base salary is $69,665), according to Salary.

com. Cruise ship directorAverage salary: $136,000Being the cruise director onboard a cruise ship is not only fun, you can rake in about $136,000 a year on a large cruise ship, like Royal Caribbean. The cruise director takes charge of activities, entertainment, recreations and events for all ages of a cruise ship, for both kids and adults, whether it’s games and scavenger hunts or happy hours and themed nightclub events.

They help produce performances, live bands, lecturers, deck parties and more. They’re also the «face» of the cruise ship, and quite literally as most guests get to see them emcee events, meet them at functions and they often make public announcements. Like passengers and crew, cruise line directors can hop off the ship when it’s docked.

Cruises are known to travel to many destinations in one itinerary, so directors will get to visit plenty of places. Many assistant directors work their way up to director. Experience depends on the cruise line.

Some require a bachelor’s degree and proven history working in hospitality; others may want two or more years working in a luxury hotel or resort. Don’t miss:7 amazing American restaurants worth road-tripping for — that all have meals under $12The 6 best cities in America for geeks9 places in America you have to see in your lifetime.

Do travel agents travel for free?

Do Travel Agents Get Discounts for Themselves? — Most often than not, travel agents encounter numerous questions like, «do travel agents travel for free, or do travel agents get discounts on flights?» People asking these questions are mostly interested in joining the travel industry and want to know the benefits that come with it.

The truth of the matter is, travel agents are not offered free flights or tours. However, they often get discounted trips from travel destinations and hotels that seek recommendations from such agents. These discounted trips are mostly research-based for the travel agent as they try to get the best places to recommend for their clients.

Also, since travel agents are always up to date with the trends in the industry, they can easily spot trips offered at the lowest prices and book for themselves. Better still, they sometimes get to earn commissions on their personal trips. See Related: How to Start an Online Ticketing Business.

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How do travel agents get clients?

Travel agencies need clients, so attracting new customers all the time is very important to grow your business. Some agents will rely on calling potential prospects – called cold calling – while others place ads online or in newspapers and magazines or use social media to attract travelers.

  1. Jacob Marek, founder and chief explorer of IntroverTravels, said that his customers find him through the Facebook ads that he places
  2. «They also find me in the online groups and social media platforms that I participate in,» he said

ADVERTISINGIf social media is a marketing tool that an agent is interested in using, Marek advises them to go slow. «Growing a following on social media is a slower process and not really a sales tool,» he said. Marek understand the importance of cross-marketing and said that he is also reaching out to travel bloggers for opportunities to write blogs on their sites.

  1. «I’m also reaching out to professional photographers for joint venture partnerships with their existing clientele,» he said
  2. Trish Mercer of Georgia Travel Experts, an affiliate of Travel Experts, said that the best way to build her great client base is to offer something that the guest cannot do for themselves so they feel like they have to send their friends and family to you

«I offer an incentive,» she said. «I give referral gifts and my business cards and I ask for referrals. I even have discount parking to offer at the largest airport near me. This adds to my bottom line because customers are surprised I would go to that trouble for them and that makes them want to talk about me and give referrals.

«Steve Griswold, owner of PixieHoneymoons. com, says that he uses theme nights in his community to attract new customers. «We meet new clients all the time from many different places,» he said. «For honeymoons, we have set up Caribbean Nights in our community at local restaurants and invite existing clients and new clients to those events.

Caribbean Nights are a nice way to share all-inclusive resorts with clients over some drinks and appetizers. «He also relies on using social media to attract new clients and with good reason. According to Ambassador, 71 percent of consumers who have had a good social media service experience with a brand are likely to recommend it to others.

  • If you follow Griswold on Twitter at @pixiehoneymoons, you will see that Griswold posts travel tips and reasons to honeymoon in a new destination as well as what’s new at various venues
  • «Social media, of course, is very important and a great way to share vacation destinations with new clients,» he said

«Pinterest, Twitter, and Facebook work well for sharing beautiful vacation and destination photos with new clients and generating interest. If you can share your vacation experiences on social media as it happens, with applications like Facebook Live and Periscope, you can connect with new clients instantly.

Do travel agents charge a fee?

But doesn’t the cost of using an agent invalidate the savings? — Not at all! The cost of using a travel agent is generally marginal, and oftentimes they won’t charge you at all. Much of their money comes from the hotels and wholesalers they do business with.

Are travel agents still a thing?

Do Travel Agencies Still Exist? — If you’re like many budget travelers, you probably started booking your own trips yourself online in the early 2000s and thought travel agents went extinct. That’s actually the farthest thing from the truth. Sure, travel agents and agencies are not as common as they once were, but, they are still in demand.

In fact, 34% of Millenials used an offline travel agent in 2015 (and many others with some crazy travel requests)! You know, the same generation that can send you a text message or tweet but won’t have a face-to-face conversation with you.

I’m surprised that many know what a travel agency is. You can also perform a quick Google search for «travel agents near me» and you will most likely find at least one private office. Or, you can always look for your local AAA location as well.

What’s the highest paid job in the world?

What Is the Highest Paying Job in the World? — The highest-paying job in the world, in a traditional sense, holds the number one spot in this article: anesthesiologist. They are also the only job listed above $300,000 a year. The list, however, does not take into account mega-CEOs like Warren Buffett and Jeff Bezos, who make considerably more than that.

What is the highest paid job in tourism?

High Paying Tourism Jobs

  • Chef Concierge. Salary range: $36,000-$159,000 per year.
  • Hotel Controller. Salary range: $61,000-$100,000 per year.
  • Guest Relations Manager. Salary range: $34,000-$80,000 per year.
  • Tour Director.
  • Hotel Assistant General Manager.
  • Clubhouse Manager.
  • Curator.
  • Resort Manager.
  • .

    What is the highest-paying travel job?

    15 highest-paying travel jobs

  • Sales Director. Average Annual Salary: $175,376.
  • Airline Pilot. Average Annual Salary: $140,601.
  • Cruise Ship Director. Average Annual Salary: $136,000.
  • Creative Director. Average Annual Salary: $126,297.
  • Travel Publicist.
  • Hotel Manager.
  • Luxury Travel Advisor.
  • Foreign Affairs Analyst.
  • .

    What are the disadvantages of using a travel agent?

    8 Great Reasons NOT to use a travel agent

  • You Know How to Book Your Own Trips.
  • You Have Time to Research and Book Your Own Travel.
  • You Know Exactly What You Want.
  • You Like Non-Traditional Travel Components.
  • You Can Find Better Travel Deals.
  • Quirky or Complicated Trip Planning Scenarios.
  • .

    How do I get started as a travel agent?

    The travel industry offers great career options for entrepreneurs. For those who are just starting out, selling leisure travel can be a rewarding but complex business. According to an August 2020 study from the British-based travel technology company Travelport, travelers are more likely to book through a travel agent than before the COVID-19 crisis, with 33% of all travelers anticipating an increase in their use of travel agent services.

    This trend was particularly evident among the 44% of millennials who said they would up their use of advisors. Overall, 65% of respondents said it’s because they feel travel agents are best placed to provide them with the latest travel safety information.

    The survey polled 5,000 travelers across the United States, United Kingdom, India, Australia, and New Zealand. Here’s where to start: 1. Educate yourself. Work on developing your business, sales, and communication skills. It might seem intimidating all there is to know as an advisor, but the good news is you have plenty of resources available to you.

    It’s important to establish yourself as an expert and know who needs your expertise. Attend programs like the Travel Institute, supplier webinars, and training through your host agency or consortium. Familiarize yourself with the tax and legal requirements in your state, health insurance, and Errors & Omissions Insurance.

    Create a business plan. For any entrepreneur, you want to create a business plan that lays out your costs, fees you plan to charge and commissions you will earn, so you see clearly how much cash you’ll need to cover living. To generate positive cash flow, so that what your business earns exceeds your expenses, estimate the net amount of cash and cash-equivalents transferred into and out of a business.

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    Because you are not going to realize revenue until the time of travel or in some cases after travel, you may want to charge service fees, which are collected at the time a client employs you. Since income is paid at the time of booking, service fees can expand your overall annual income, and supplement commission payments that are seasonal.

    You may also want to become an LLC to protect your personal assets from claims against the business, including lawsuits. There is also the tax benefit. If you’re an independent contractor, you need to pay self-employment tax (which is 15. 3% of your net business income). Having, and sticking to, the correct business plan is the difference between a lot of successful and unsuccessful travel agencies. Photo: takasu/Shutterstock. com. Focus on a specialty. By specializing in a product you differentiate yourself from the competition and can hone in on a target audience. Find something you are passionate about to specialize in and develop solid relationships with suppliers in their chosen niche.

    • Most importantly, experience the product you are selling
    • Take advantage of travel agent rates, fam trips (once they’re available again), and more
    • The best way to sell a product is to experience it firsthand and share those experiences with your customers

    Two of the fastest-growing niches in the industry, according to research from TMR, are wellness and expedition travel. TMR’s Wellness Travel Outlook, which was released last year and was sponsored by Cunard, found that over 70% of advisors believe their annual sales for wellness travel are likely to increase in 2021.

    1. And TMR’s 2020 Expedition Cruise Outlook found that advisors believe there is going to be at least a 10% to 25% increase in their sales for expedition cruises in 2021, 4
    2. Consider joining a host agency, consortium, or franchise association

    Host agencies, consortia, and franchise associations offer training and programs that are dedicated to growing your business, like free social media programs and business development managers who provide local marketing support. Not only will they educate you on how to sell cruises and tours, but to also run a business and become a super salesperson.

    They also provide a community, from veteran advisors to personal relationships with suppliers to a team of experts available to help you along the way. Take advantage of the technology, business resources, back-office support, and other opportunities provided for you.

    If you want to be an independent contractor, it likely means you’re working as part of a larger host agency, where you’re building your own business from the ground up, with basic support from the host. There is a commission split between the host and the independent agent.

    When you buy a franchise, you are buying a recognizable brand and a business model set up to include everything you need to get started. Franchisees get 100% of the commissions. In turn, the franchisee (agency) pays a royalty or a monthly/annual fee to their franchisor.

    A consortium is a collection of host agencies, travel agencies, and/or travel agents that act on behalf of its agency members including buying potential, benefits, and commission levels. If you decide on a consortia, be aware that you will be responsible for your own accreditation number to be recognized by suppliers as a travel agency (for example, ARC, CLIA, IATA, and IATAN). Expedition cruising is one of the fastest-growing niches for travel advisors. Photo: Tetyana Dotsenko/Shutterstock. com. Develop and market your brand. The first step to building a loyal clientele is to choose a brand that differentiates you. From your website to social media accounts, create an online presence that reflects your unique personality and expertise.

    1. Research which business model and organization is right for you
    2. Check out FindAHostAgency
    3. com and HostAgencyReviews
    4. com
    5. Check this during your research to be sure that your brand is available and will be consistent across as many channels as possible

    Then, promote yourself through family, friends, and in your community. Join clubs, volunteer, go to local events — you want to be the first person that everyone thinks of when they want to go on a vacation. Become an ACTA or ASTA member. The American Society of Travel Advisors (ASTA) and the Association of Canadian Travel Agencies (ACTA) are your advocates, leveraging their strength as national associations before their respective government agencies.

    • Their efforts on behalf of the advisor community have been integral to securing advisors with much-needed relief during the coronavirus pandemic
    • They also signal to the traveling public that travel advisors are an instrumental conduit in the industry

    Subscribe to Travel Market ReportAs the voice of the travel advisor, Travel Market Report brings you the news that directly affects you. Our daily newsletters provide in-depth coverage and analysis of news and trends affecting leisure travel agents, along with practical business advice and insights into key growth markets.

    What are the perks of being a travel agent?

    The Perks of Being a Travel Agent

  • You get to share your passion.
  • You travel and experience amazing cultures.
  • You can be your own boss and work at home.
  • You make lifelong connections.
  • You’re selling a dream.
  • It’s never boring.
  • You’re connected with like-minded people.
  • You get to share your expertise.
  • .

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