How Do Travel Agents Get Paid? A question I hear almost every day.
Posted by Carlanne on November 26, 2008
Through the summer I read about first the airlines, then the cruiselines and finally resorts charging their guests and customers “fuel surcharges”. Now every day I read where airlines, cruise lines and other suppliers of hospitality services are (with some guidelines) reducing, or eliminating all together, the fuel surcharges they initiated during the summer of historically high fuel prices.
Travel agents were the front line recipients of consumer complaints about these charges. And travel agents were equally chargrined about the charges. No one was exempt from paying them, including travel agents. And, in the case of the cruise lines, while we had to tell our clients about the fuel surcharges, collect the fuel surcharges and take some heat for the fuel surcharges, we did not get paid a commission on any of the surcharges. Fuel surcharges and non-commissionable fees & taxes often caused the price of a cruise to more than double from the advertised “cabin” price. And the cabin price is what travel agents earn their living from. Those surcharges, along with non-commissionable fees and taxes, moneys spent on excursions and activities, and money spent on goods and services while onboard a ship, are all non-commissionable moneys the cruise lines keep in their own coffers.
EXAMPLE: So imagine that in a 40 hour work week, you were working 20 hours for free so that the company you worked for could show more profit, or have a higher stockholder return or make more money to take home to the family. How good would you feel about that?
This pretty much describes the situation for a travel agent. Roughly half the prices a client pays for their cruise is non-commissionable. When agents ask the cruise lines to pay commissions on more of the charges, the cruise lines say that those additional moneys collected are profit centers for them and they are not going to give up any of that money to their front line sales force (travel agents).
Just as people would not want to work for free 20 hours each week for their employers, travel agents do not much appreciate the cruise lines asking them to work for free when helping people choose a cruise. Today’s itineraries are more complicated, the choices for cabins more varied and the excursion choices downright confusing. There are pre-and post-cruise hotel rooms needed as well as air reservations, shore excursions and good advice. That is why people go to a travel agent or consultant to begin with, for the expertise, the knowledge, the assurance of having someone who cares about you and looks after your best interests.
So people ask me, how are you being paid? The best way I can be paid is by word of mouth referrals. In my business, it takes volume…and I mean lots of volume…to earn a living wage. So the greatest compliment my clients can give me is a referral to family, friends, clients, co-workers, just about anyone you talk to. And when you are planning that vacation or cruise, any travel that involves leaving home for a night, call your travel agent. Do whatever research you want on the internet, but call a travel agent to do the actual booking. It will cost you exactly the same (or possibly less) as going direct and doing it yourself. And you will receive valuable advice, have an advocate and someone to turn to if things go south on you. Your travel agent is just like me: trying to earn a living wage, while performing customer service and loving what they do.