How Much Do Travel Agents Make?
By Chad Burt, Co-Owner of OutsideAgents.com
If you’re someone who loves to travel, has thousands of travel rewards points, and knows an impressive amount of travel lingo, then a career in the travel industry might be perfect for you!
Of course, none of these things are required to be a travel agent — except a love for travel. To be a successful travel advisor, though, you must manage your heart’s desire with a business mindset.
Sure, as a travel agent, you will spend your days helping clients book flights, dreaming up exotic and unique itineraries, and finding fun activities for travelers. A career as a travel agent is perfect for any self-motivated person who craves flexibility. You can easily do this job from anywhere in the world. Travel offers a flexible schedule, exceptional earning potential, and the option to spend your days working from your favorite locales around the world. As a matter of fact, I’m working on this article from my balcony overlooking the Caribbean right now.
So, what’s the career outlook for travel agents? The truth is that now is the perfect time to be a travel agent. In fact, according to the New York Times, travel agents have recently seen a surge in business because travelers are ready to see the world again. OutsideAgents.com, a leading national host agency, reports transaction values (the amount clients are paying for a vacation) has jumped 38% compared to 2019. This trend suggests consumers are “getting even” for the vacation they lost by spending more. Further evidence supporting the opportunity for agents to grow and earn more include:
- Less competition and reduced marketing costs
- FOMO (Fear of Missing Out) is fueling market demand
- Higher prices due to reduced inventory
- Vendors need the personal connections agents create and maintain
Agents are extremely valuable as they work to provide a stress-free vacation by helping travelers navigate the constantly changing travel restrictions and rules. Most importantly, they do it in a highly personal, granular way that no supplier or online agency ever could.
How Much Money Can I Make as a Travel Agent?
The big question that most people who are thinking about starting a home-based travel business have is, “How much money does a travel agent make?” The more important question is, “How much can I make as a travel agent?” Before delving into either question, it’s essential to understand how travel agents get paid.
Most travel agents are independent contractors, meaning that they own their own travel business. Travel agents make most of their money from commission, which is money earned on clients’ bookings. Depending on the segment of travel and the supplier they book with, travel agents may make anywhere from 5 to 30 percent commission on bookings. It’s in your best interest to find a good host agency that pays the most. OutsideAgents.com offers some of the highest vendor commissions (as much as 38 percent). You will have a little overhead and your host agency will get a little of the commission. What’s left is your commission payout. Your commission payout varies from agency to agency. OutsideAgents.com offers commission payouts at up to 95 percent.
Example: Here’s an example of how much you might make per booking as a travel agent. If you book a vacation package for a client that totals $5,000, your commission split would be $800 (based on a 16% base vendor commission). If you were with OutsideAgents.com, for example, and your commission payout is 95 percent, you would receive $760 on that single booking.
New agents typically make approximately $350 per booking, while experienced agents net around $870 per transaction. How does this translate into per-year earnings? A 2016 survey by luxury network Virtuoso found that more than half of their top luxury travel advisors earn more than $75,000 a year. A 2020 survey produced by HostAgencyReviews.com show similar earning potential and emphasizes the dramatic jump in earning from your first to 3rd year. Neither report quantifies the additional benefits such as discounted travel, free FAM trips, being your own boss, and loving what you do. That’s priceless.
As a new agent, most of your bookings will come from co-workers, friends, friends of friends, and family. So, initially, your advertising costs will likely be very low, since you can easily advertise your services via social media to friends, family, and neighbors. As a new business, though, marketing costs quickly escalate as you begin advertising to people you don’t know. Luckily, though, with help from a good host or consortium, you can make this costly start-up period relatively brief as you use their tools and experience to build effective campaigns, retain clients, and build referral business. The “gravy,” as they say, comes in your second year as you remarket to existing clients at a fraction of the cost to acquire new ones. A great partner or host can help shorten the time it takes to get to that lucrative point.
How much you earn depends on a variety of factors.
It’s essential to keep in mind that how much you earn as a travel agent depends on several things. Most of them have been covered in the industry pretty comprehensively. They address the importance of your niche, education, service and sales skills, experience, and more. Few, though, look at the numbers. Few look at it strictly from a business perspective. We’ll do that here because it’s critical in understanding how much you will make as a travel agency owner.
A business owner cares about a few important numbers: how much sales cost, how much they can make from a sale, and how much they want to make over time. Let’s break that down before we show you OutsideAgents.com’s nifty travel agent income calculator that will predict your future!
Cost per lead: How good of a marketer are you? That will determine your lead cost. After working with thousands of agents to market to hundreds of thousands of clients over a couple of decades, OutsideAgents.com says lead costs range from $3 to $38 depending on the skill of the marketer and the quality of the lead. On the calculator, just tell us how good of a marketer you think you are, and it will fill in the number.
Leads per sale: How good of a salesperson are you? That will tell you how many leads it should take for you to make a sale. This number is heavily influenced both by experience and your mix of repeat business. Returning clients drives your leads per sale down because they buy about 6 times more often than new clients. The calculator takes what you think of your skills and fills in the numbers.
Commission per booking: How well can you make recommendations? Product knowledge and experience are the strongest influencers of this measurement. Tell us how well you think you can suggest and guide your client on the calculator.
Sales per month: How many sales can you close monthly? For a newbie, 3-5 is common. After that, it’s a guess based on your experience. The lucky thing is that the calculator will tell you the number you actually need to make to hit your goal.
Goal: How much do you want to make each month? Try $1000 or any number that makes sense to you. After all, it is your goal.
To see how much you might make as a travel agent working on your own or with different plans for different hosts, check out this calculator from Host Agency Reviews. As you can see from their calculators, there are several cost centered considerations that will influence your earnings.
Use the calculator as a think space where you can model how you can improve your earnings as a business person selling travel. You can see what happens when you make yourself a better salesperson, change your conversion rate (leads per sale), adjust your goals to reflect your budget, and more. You will quickly discover new ways to improve your bottom line, guaranteed.
Tip To Earn More Money as a Travel Agent
Find the Right Agency Partner
Host agencies are designed to help travel agent businesses grow in scope and size. There is a growing trend for successful agents to sign up with hosts to grow their business. That is because host agencies offer so many benefits to both new and established agents.
There are many benefits of signing up with a leading host agency like OutsideAgents.com. They can quickly train you and bring you up to speed on the latest trends. They can help you marketing or, like Outside Agents.com does, do it for you, saving you time, money, and the cost of boo boos. This allows you to run your business with a very low overhead, which means you can reinvest more now so you make more money tomorrow.
Host agencies vary significantly in what they offer. The most important thing your host can offer you is the benefit of the experience and a rock star, street level understanding of the industry. Can they crunch the numbers? Do they have support for agents staffed with veterans that have been in your shoes? Will the owners work with you one-on-one? Are they staffed with cool people in dirty boots ready to work alongside of you? That’s what you want.
Are you ready to embark on a new career? We’re excited about your interest in becoming a travel agent. We’d love to help you make that happen. Reach out today to learn how we can help.