How Do Travel Advisors Make Money?
Managing our time is a life-long pursuit. In our professional lives, it’s a necessity. Especially in sales. Long ago someone coined the phrase “time is money” for a reason. That underlying truism is the key to understanding the two ways advisors get paid.
#1 Commissions
Most travel suppliers (hotels, cruises, car rentals, tour companies, etc.) pay commission. If an advisor books them for you, they receive 10% commission. (That’s a bargain considering online travel agencies like Booking.com receive 25%. See more about that here.). So if an advisor just handles your bookings, no fee is involved. The time they spend on research is compensated by the suppliers, not you. It is worth noting commission is earned on base rates only (ie. they don’t include the beverage package added to your cruise).
The exception to the suppliers mentioned above? Airlines. After decades of declining commission rates, they stopped paying in the 90’s (long haul business/first class flights are the exception). To compensate, advisors may charge a flat fee to book airfare. Ok…I can practically hear some of you shouting “WHAT??”. Well if time is money, consider this: researching airfares takes time. Factors to consider include travel dates & times, choice of airline, price, seating preference, client frequent flyer status, # of people traveling, airports (in NYC we have 3 options), layover times and the ongoing communication required to ensure clients get their preferred flight. That takes time. And time is money.
#2 Planning Fees
Most of the work advisors do is before a trip. Creating custom itineraries requires research, thoughtful planning, gathering quotes, creating sample itineraries, numerous revisions and constant contact with clients & suppliers. Implementing upfront fees ensures advisors receive compensation for their work, especially when no salary is involved. Fees also offer protection against the unfortunate reality that some people will request detailed information, only to look for a better deal or book the trip themselves.
Travel advisors “work hard for the money” (thanks Donna Summer!). Their expertise, access to information and ability to deliver a VIP experience can be the difference between an outstanding vacation and an average one. So when you need to plan your next getaway, consider using an advisor. The benefits of working with one far exceed the cost.