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AIG Travel Guard Insurance Plan Changes Upset Advisors

AIG Travel Guard Insurance Plan Changes Upset Advisors

AIG Travel has dramatically altered its Travel Guard offerings starting this fall. Photo: Casimiro PT/Shutterstock.com

AIG Travel has dramatically altered its Travel Guard offerings starting this fall, and many travel advisors are concerned about the changes, including the elimination of commission protection provisions.

The company is eliminating its core Silver, Gold and Platinum plans, and replacing them with what it calls Essential, Preferred, and Deluxe plans. In addition, it is introducing a slew of new “bundles,” insurance add-ons for specific types of coverage or events that could happen during the insured’s travels.

“As we ready to market our innovative product enhancements and introduce our Essential, Preferred and Deluxe products, we have simplified and streamlined our compensation plans, and in doing so, will now offer a single compensation amount applicable to all products. This change eliminates the variability in compensation by product and places the appropriate emphasis on the value of the products themselves,” the company said in a late August email received by one agent. Changes took effect in September on policies sold in 38 states.

According to one AIG Travel presentation for a group of agents, that commission rate is 26%.

“In addition, we have discontinued the commission protection program,” AIG said, referring to how agent commissions paid on the travel policy was utilized by “a relatively small population of agents, yet required a dedicated and highly manual administrative process.

“In keeping with our objective to simplify and streamline compensation plans, while at the same time preserve current compensation values for our agency partners, we have increased the new compensation amounts proportionately. This upward adjustment in compensation will apply to all sales.”

Advisors aren’t happy Travel Market Report contacted agents impacted by the changes, and most did not agree with AIG Travel’s assessment on the compensation adjustments. They told TMR that depending on what type of plans you sold prior to the changes, your agency’s average commissions could have been much higher than the current plans allow.

“We were notified, and stopped selling them immediately,” said Jodie Aubut Robichaud, Happy Travels, in Henniker, New Hampshire. “We were already transitioning, and this just pushed us right over completely. Too bad, as we liked them, but these changes are ridiculous.”

Barbara Kahn, of Vista Travel Inc., in Florida, said: “They felt commission protection wasn’t necessary any longer, but when I called my BDM at Travelex, and said this is what’s happening with Travel Guard, they assured me that they were maintaining commission protection.

“I would like to have my commission guaranteed. I used it. You work like crazy to build an itinerary for a client, and if they cancel, the insurance company gets paid, but we aren’t.”

Denise Pascucci, owner, Cape Ann Travel Services, in Gloucester, Massachusetts, also cited the commission protection cancellation, price changes, and the more complex bundling model as significant enough to merit her changing preferred insurance suppliers.

“I am considering looking around. I have used Travel Guard now for over 15 years and have been extremely happy,” Pascucci said. “Not so much now.”

One advisor with 20 years’ experience selling Travel Guard told Travel Market Report they will be looking at other providers as a result of the lower commissions and what he perceived to be higher client premium rates. 

One area that could result in higher compensation is AIG Travel’s eliminating lower commission rates for sales that have to be phoned into the company’s call center. “This means agents will now receive the same (as in higher) compensation amount for all eligible sales, regardless of sales channel,” the company said in its agent email announcement.

States where the changes have not taken effect include: Colorado, Florida, Indiana, Minnesota, Missouri, New York, and Washington. According to one document Travel Market Report obtained, AIG Travel said it was not certain when their new policies will be approved in those states. AIG Travel was contacted for comment, but the company did not reply by press time.

Other changes AIG Travel has introduced other enhancements, including increased medical benefits on their Preferred and Deluxe plans ($50,000 and $100,000 respectively), making those benefits primary insurance rather than secondary; and cancellation coverage if a client purchased their insurance prior to finding out they are pregnant.

On its Preferred and Deluxe plans, travelers will be able to receive reimbursement for costs associated with rescheduling a departure “a few days prior to departure” to avoid a possible cancellation of a trip due to bad weather that might impact flights.

Also, on the Preferred and Deluxe plans, travelers will have the option of rescheduling their trip to another location, if the original destination might be made uninhabitable by a major weather event. “With Trip Exchange, you can exchange that trip and reschedule to another location,” the company’s marketing materials say.

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Complete Guide to Travel Agent Commissions

by Core Commissions | Feb 16, 2023

According to research by Statista , as recently as 2022, the travel industry was reported to be worth as much as two trillion dollars. It is one of the largest industries in the world based on employment, with an average growth of 12% over the past five years specifically among travel agents. 

Travel agents earnings are made up of a mix of salary, commission, and other incentives. Their pay can fluctuate significantly month to month or even annually. Different destinations, seasons, suppliers, affiliates, or even how the booking is made, all factor into the percentage of commission that an agent takes home. All of these variables make the process for calculating and managing commissions for agents ever-changing and very complicated.

Similar to other commission-based industries such as insurance and finance , an agent’s pay will vary depending on whether they are employed by an agency or if they are self-employed. Typically, agents employed by an agency have a salary and receive commissions and incentive pay as an additional source of income. Whereas, a self-employed agent is not paid a salary and is only paid commissions earned from suppliers and fees paid by customers.

Core Commissions is a leader in sales compensation software. Founded in 2005, Core Commissions provides an affordable web-based commission management solution that automates the calculation of complex sales commission and incentive pay plans. Core’s powerful and robust application is capable of managing complex data relationships and commission rule scenarios while providing an intuitive online portal for salespeople to view their pay statements and performance dashboards.

In this guide, we’ll cover vocabulary, types of commissions, commissionable revenue, and commission payment schedules that are common for US-based travel agents. 

Travel Agent Vocabulary

Supplier: The vendor or business that provides travel services. Suppliers could be airlines, hotels, rental car companies, tour guides, cruise lines, etc.  

Host Agency: Many independent agents may prefer to work under the umbrella of a larger organization to earn higher commissions and benefit from better contracts, relations, and marketing assets. These organizations are referred to as host agencies.

Accreditation Number: The identification number that suppliers use to keep track of sales made by each agency is known as the accreditation number. Suppliers group all bookings made under the same accreditation number together, meaning that host agencies, or agencies with multiple reps, can more easily generate enough sales to place them into higher commission tiers.

Non-Commissionable Fees (NCF): There are some aspects to the cost of travel that are not commissionable, meaning agents cannot accrue any commissions from them. Non-commissionable fees typically include any services fees and taxes added on to a booking, though there are some cases where both fees and taxes can be fair game for commissions.

Travel agents look at world map to plan travel arrangements for clients.

Types of Commissions for Travel Agents

There are three main commission types for travel agents: flat commission rates, tiered commission rates, and airline commissions.

Flat commission rates

With flat rate commissions, every travel agent gets the same commission rate no matter how much they book. Flat commission rates are standard and predictable.

Tiered Commission Rates

For larger suppliers, they may utilize a commission tier structure as a way to incentivize agents to book more with them. Suppliers may base their tiers off of two variables: annual sales revenue or passenger count. In either case, the supplier establishes a commission structure that rewards agents or agencies who meet certain thresholds. Once an agent reaches a threshold, they receive a higher commission rate.

How many levels each supplier includes in their tier structure can vary, but generally they have three to four tiers for agents to reach. As mentioned above, suppliers keep track of all bookings made by agents through use of an accreditation number.

Annual Sales Revenue: In most cases, suppliers opt to build their commission tiers around overall sales volume achieved by an agent or agency. Once a certain threshold for annual sales is met, an agent’s commission rate increases.

Passenger Count: Alternatively, some vendors may choose to use passenger count as a way of structuring their commission. This can be a common route for suppliers such as cruise lines as they have several vacancies to fill on each cruise.

Either way, agencies have an advantage with tiered commissions because they have multiple agents working under the same accreditation number, all of whom will benefit from the commission rate increase. Because of this, they are able to reach the tiers with higher commission rates quicker and easier.

Airline Commissions

Airline commissions are unique from flat rate commissions and tiered commissions because they vary completely based on the contract that is negotiated with each agency. Agencies with better contracts earn a higher percentage rate. Even with a well-negotiated contract, an agent’s compensation will be impacted by domestic vs. international flights, city pairings (where they are flying to and from), class of service, the carrier, and the time of year.

Not all airlines pay commissions to travel agents, but airlines that do will have their own policies and commission rates. For specific commission rates, you will need to inquire with each individual airline. 

Commissionable Revenue

Almost any travel services booked by a travel agent can be eligible for commissions or other incentives, some examples include:

  • Car Rentals
  • Travel Insurance
  • Service Fees
  • Custom itineraries

Other Variables

Aside from the variables mentioned above, there are additional factors that contribute to how an agent gets compensated.

Commission Confidentiality: Many suppliers choose to keep their commission rates private. You will only learn the commission rate when you sign on with a host.

Net Commission vs Gross Commission: As mentioned above, for some aspects of travel, there are non-commissionable fees. This can play a role in whether the commission accrued for each agent is based on the gross cost of the booking or the net, which is gross less any taxes.

Phone vs. Online Bookings: In some cases, suppliers may base their commission percentages on how the booking is made. This won’t have a huge impact on the rate of commission paid out, but it can alter the rate a little bit.

Price Matches: Many suppliers will offer price matching for customers, which can result in a lower commission rate for agents.

Travel Type: Leisure and business involve different methods for planning and agents will earn different rates depending on the type of travel being arranged.

Commission Pay Schedule

Another complicating factor to travel agent commissions is the schedule in which they receive their incentive pay. Here are the two most common ways agents are compensated:

Payment upon booking: Agents will receive payments upfront when the client buys travel insurance, if the agency requires any type of deposit prior to planning, or when they submit their final bill to the customer. The fees incurred from completing bookings for the customer are received as incentive payments for the agent.

Payment after client has traveled: Suppliers will not usually issue payment to agents until the client has concluded their travel, which means that in most cases agents will go long periods before seeing their commission hit their paycheck.

Ensure Accurate Payments to Your Agents

There are a lot of moving pieces involved in managing sales compensation for travel agents and ensuring that the commissions received from suppliers are accurate with your records. Core’s customizable sales compensation solution has all of the tools you need to reconcile payments from suppliers, track commissions tiers, and accurately calculate your agents’ pay.

Single-button processing allows you to process commission cycles at any point once payment is received from your suppliers and our customized dashboards give you a real-time view into which suppliers are your biggest revenue generators.

Contact us or set up a free demo and we’ll show you how Core can automate the entire compensation process for your agency.

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Customers rank core as gold medalist in softwarereviews’ emotional footprint report, tips for mapping a successful sales territory, core is an incredible asset to associates insurance group’s commission management processes.

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Travel Agent Commissions, Explained. [Infographic]

There’s no two ways about it, travel agent commissions are complicated—the numbers are not black and white numbers and there is no set way of doing things. Simply put, there is no "average" travel agent commission. Heck, if that were the case we'd be wrapping up this article by now!

We’re going to try to simplify things but since the system is complex, explaining it can be tough. As you read this, just remember that commission levels vary by a travel agency's sales, an agency's consortium , franchise or host agency affiliation, vendor, destination, how the booking is made, and more (and that's just to name a few).

This article is a rough guide to travel agent commissions. It will give you a thorough, yet general, idea of travel agent commissions and what to expect. If you're a sucker for details, don't worry. Once you join a host, franchise, or consortium, their commission guides will have all sorts of juicy details on specific commission levels.

Now, let's start breaking this stuff down, shall we?

⭐️ har's Travel agent commissions article highlights ⭐️

  • Travel Agent Commissions, Big Picture : Curious about the average commission rate for different travel products? You can check out our infographic in this section!
  • How Do Travel Agent Commissions Work? Commissions are typically tiered according to annual sales and/or passenger sales.
  • Host Agencies and Travel Agent Commissions : A host agency can help travel agents receive higher commission levels due to substantially higher sales thresholds among their independently contracted (IC) travel agents.
  • Types of Travel Agent Commissions: There are 2 primary kinds of commissions for travel agents, flat commissions and tiered commissions.
  • Airline Commissions: Airline commissions are a different beast altogether because their commission range depends on a variety of different factors! (Read this section to find out why)
  • Negotiated Contracts: Going with a host or consortia can help you leverage their contracts with suppliers.
  • Commission Confidentiality: You might not know the exact commission rate you'll receive until you sign on with a host. This section is where we tell you why.

Travel Agent Commissions: The Big Picture

Let's start with a visual to give you the 40,000-foot view of travel agent commissions. You can see some hard numbers and how things are broken down in an easy-to-digest infographic. After you've checked that out, we'll deep dive into how travel agent commissions work to make sure you know all the ins and outs!

How Do Travel Agent Commissions Work?

First things first: where do travel agent commissions come from? How do they get from supplier to host to travel agent? How does a supplier know who gets what?

At its simplest, a supplier/vendor recognizes a travel agent from any Joe Blow on the street because travel agencies have an accreditation number .

These magic accreditation numbers are how travel agents get commissions! When you call/login to make a booking, the supplier asks for your travel agency's accreditation number. This is how they know who to send the commissions to. It's like when you call any doctor's office and they always ask for your name and date of birth to identify you. Travel suppliers ask for an agency's accreditation number to pull the agency up in their system.

Host Agencies and Travel Agent Commissions

Host Agencies and Travel Agent Commissions

In the case of a host agency, all of the travel agencies in the host's network use the same accreditation number (the host's). The supplier/vendor will recognize all of the host's independent contractors (ICs) as "one" large agency since all of their ICs are using the host's accreditation number.

Consortia and some franchises are a little different from hosted advisors in that each individual agency needs its own accreditation number.

If that's a little confusing, let's try to give a similar example in the real world . . .

I like to think of the host agency model being like the relationship between a general contractor and a homeowner. A homeowner paying a general contractor is like a supplier paying a host agency.

Instead of paying the electrician, plumber, and architect separately, homeowners pay the general contractor who in turn pays the individual companies (that's the agents!). Likewise, the supplier pays the host agency commission for their aggregate sales, who in turn pays the individual independent contractor (IC) travel agencies their commission.

Using a host's accreditation is one of the major benefits of using a host agency . . . not only does it spare you the hassle of getting your own accreditation, but a host agency is able to negotiate better commission levels than an individual agent because of their higher sales. The general rule is, that the more your agency sells of a vendor, the higher the commissions.

This is a great segue into our next section! (PS: Did you know it's segue and not segway? I just found out and want to make sure you appreciate my newfound knowledge by pointing it out.)

Two Kinds of Travel Agent Commissions

1. flat commission rates.

A flat-rate travel agent commission is the simplest type of commission. The flat rate is just what it sounds like every travel agent gets the same no matter how much they book, what consortium they belong to, or how cute their dog is. Flat-rate commissions are actually standard and predictable! Hooray!

Here are a few types of vendors with a flat rate commission:

→ Hotel-only bookings and car rental companies: These types of bookings typically pay travel agents 10% commission and that’s that. There are small variances but car and hotel-only bookings are probably the most predictable commission level in this whole mess.

travel agent commission levels for car rentals

→ Boutique tour operators: Smaller or boutique vendors will typically pay a 10% commission or give agents net rates. They won’t have sales tiers (more on that soon). If you’re sending a boutique hotel or small tour operator tons of business, there may be room to negotiate a higher commission.

→ Disney: Okay, so they're not exactly a boutique vendor! But Disneyland and Disney World have a flat rate commission of 10% for all agents. No matter how special you, your consortia, or host agency are, you're not going to be able to negotiate a better commission.

Same with the Disney Cruise Line and Adventures by Disney products. Their commissions are tiered (we'll talk about tiered commissions in-depth in just a sec) but the sale thresholds for those are the same for every. single. agency. out there.

Disney commission levels for travel agents

2. Tiered COMMISSION RATES

It only seems fair that if you sell more of something, then you get a higher commission, right? Well, a lot of vendors think so too! Tiered commissions essentially mean that the more you sell, the higher the commission you get. Sounds simple?

I hate to burst your bubble, but tiered commissions are so complex so I'm going to put them in the spotlight after our intermission . . .

Rigel Break!

Ugh. My mind is wandering too. Let's take a break and look at a cute picture of my dog, Rigel .  This is his "business dog" look.

Rigel takes a break from travel agent commissions

Sigh. Handsome lil' devil, isn't he? Sorry, that's all the cuteness for now; back to work!

Tiered Commission Rates. How Are They Determined?

So why would travel agent #1 receive a 12% commission for selling vendor X, while travel agent #2 receives a 16% commission for selling the same product?

There are two major factors that will determine travel agent commission tiers:

1. Aggregate/ Annual Sales Volume

For some vendors, the commission level (or tier) they pay an agency is determined by the sales volume under that agency's accreditation number. A vendor may increase commission based on annual sales of an agency (or their host agency).

Here's an example (numbers are hypothetical)

Annual Sales Commission Level:

  • 10% . . . $0-$49,999
  • 13% . . . $50,000-$249,999
  • 14% . . . $250,000-$499,999
  • 15% . . . $500,000+

From the numbers above, you can see that as a solo travel agent, it's a heckuva lot easier to reach 15% when you belong to a host agency! So even though you may have a commission split with your host agency, in the end, many agents stand to rake in more dough with a host because they are earning more commission.

When you look at the big picture, it's also worth noting that nearly all host agencies also belong to a travel consortium (such as Travel Leaders Network, Signature, Virtuoso, or Ensemble). With a host agency's aggregate sales among ICs and their consortia relationships, host agencies are able to bring in higher commission tiers with vendors than an individual travel agent.

2. Passenger Count

While many vendors use sales numbers to determine an agency's commission level, there are a handful of vendors that use a different marker. Instead of looking at the total sales coming from an agency, a vendor will look at how many passengers you're sending their way.

You’d see something like this (these are hypothetical numbers):

Annual PASSENGER Count Commission Level:

  • 10%: 0-20 passengers
  • 11%: 21-49 passengers
  • 13%: 50-199 passengers
  • 15%: 200+ passengers

A Note on Airline Commissions

Airline commissions for travel agents

I always say airlines are another animal and honestly, they're not my forte. So I’ll say this. Don't expect to become a millionaire by selling domestic tickets from JFK to LAX.

In August 2017, American Airlines announced they would pay travel agents a $2/segment for airline ticket commission — which is the first time airlines have offered all agents commission on all air tickets since the 1990s.

Kinda huge. But really, is it just me, or is the $2/segment airline commission incentive not really doing it for anyone else? Well, don't worry, because going through a host agency and/or travel consortium can give you access to private air contracts that are quite a bit more attractive.

Airlines offer travel agent commissions through two routes:

1. Consolidators:

These are wholesalers. They specialize in air and have private contracts with the airlines. Travel agents can make money with these contracts in one of two ways: commission and marking up net rates.

2. Airline Contracts:  

Your host agency or consortium/franchise/co-op will most likely have private air contracts that allow for travel agent commissions on certain airlines. Not every domestic or international ticket is going to be commissionable, it depends on things like city pairs, class of service, the carrier, time of year, etc.

The commission percentage agencies earn depends on numerous factors, the most important one being which private contracts you have access to.

Here's a general rule of thumb on the airline ticket commission range you can expect as a travel advisor:

  • Domestic: 0-5%
  • International: 10-22%

In Feb. 2018, Delta announced cuts in commissions on international flights to travel agencies . The cuts vary depending on routes and ticket class, with the deepest cuts impacting travel agencies that sell luxury and business travel. We haven't seen cuts since then and numerous heads of airlines have said leisure travel, not corporate travel, is leading the airline's recovery from COVID (estimates are that corporate travel will rebound by July 2024 . . . so close!). This leads me to believe that agencies won't see any airline commission cuts in the near future.

For most leisure agents, airline ticketing alone is not a large source of commission. That's why the most common fee travel agencies charge is a service fee for airline tickets. It helps stabilize an agent's income and ensures they're being compensated for their work.

Travel agents can book air-only reservations in a variety of ways, most notably through consolidators (often used by leisure agents) and for corporate agents, through a Global Distribution System (GDS) .

Now, let's chat about how companies like host agencies, consortia, and franchises help secure better commission deals for their agency members . . . 

Negotiated Contracts: Host Agencies, Consortia, and Travel Agent Commission Agreements

Alright, you've probably figured out that the travel industry is all about economies of scale. The more you bring to the table, the more leverage you have. So it's no surprise that hosts (a group of independent agencies using the same accreditation number) and consortia (independent agencies with their own accreditations that band together for more buying power and access to marketing/tech tools) are able to negotiate better commission tiers.

For you, as an independent agency, these negotiated commission tiers are a big benefit of aligning with a host agency or consortium. When you (or your host agency) are affiliated with a travel consortium, the consortium will negotiate lower sales tiers/passenger thresholds with their preferred suppliers .  

Let me break it down in real terms. Most vendors will have commissions broken down into tiers. Maybe they say an agency has to sell $75,000 of their product to get a 12% commission. But if a host, franchise, or consortia has a negotiated commission agreement, their agents may only need to sell $50,000 to reach the same 12% commission tier. A deal!

Since many of the readers of this site align with host agencies at some point in their careers, we’ll mention again that for hosted agents, your tier is not dependent on your individual agency’s sales, but the cumulative sales of all of the agencies under the host’s umbrella .

The value in this becomes a little more clear if we compare two agencies: one is a hosted agency that belongs to a $100M host agency, the other is a smaller agency that has $2M in sales. Both of our agencies belong to the same travel consortium. Both agencies have access to the same negotiated commission tiers because they're members of the same consortium. But, who is going to have a harder time of meeting the $50,000 commission tier the consortium worked out? You got it. The $2M agency because they have to rely on only their sales, whereas the hosted agency — regardless of how much of the vendor they actually sell — reaps the benefits of the sales of all of the other agencies in their host agency's network.

Host agencies and consortia will have the strongest travel agent commission agreements with their preferred suppliers. When a vendor is on a "preferred supplier list," it means that the host or consortium will have better contracts with them and likely sell a higher volume with that vendor.

Understanding Commission Confidentiality

As you can imagine, commission contracts between travel agencies and vendors, as well as those between consortia and vendors, are confidential. They’re like trade secrets that can give one travel agency/consortium an advantage over the other.

Top Secret - Understanding Travel Agent Commission Confidentiality

Knowing that, don’t be surprised if a consortium or host is tight-lipped when you ask for their commission guides. Sadly, they're not going to hand over a detailed pamphlet listing all their trade secrets. If you made it to this point, you can understand why :)

Or maybe they're tight-lipped because they're spies? I dunno. I say follow your gut on that one.

All that said, if you do sell a lot of a certain vendor(s), it’s perfectly acceptable to ask about commission info for your top vendors. Even if a host/franchise/consortium doesn't spell out the commissions you'd get in detail, you can A). Ask for a list of the preferred suppliers and B.) ask for an idea of the sales volume with your favorite vendors.

More Ways to Earn . . .

Believe it or not, there are multiple ways an agent can earn money beside travel agent commissions! A few other income streams agents indicated in our last income survey included service fees, consultation or planning fees, markups from net rates, and selling insurance (which is technically still a commission, but worth a note!).

Here's a few resources to check out:

So, What's Your Take?

Like I said, this is some complex stuff to explain because there is no industry standard. For those new to the industry, are there things still confusing you? For you experienced agents, does your experience jive with this account of travel agent commissions? Or did Rigel distract me so much with his cute business casual attire that I missed something or got it wrong? Let me know in the comments!

Curious to Start Earning Commissions Like a Bona Fide Travel Advisor?

Wwe happen to have oodles of those on our site. But I have to say, that at this stage in the game our  7 Day Setup LITE  takes the cake. Why? Because it connects you to all the resources you need to launch your agency in one week.

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Editor's Note: This article was originally published in Oct. 2021. We occasionally update it with the latest data, indicated by the publish date listed on the article.

About the Author

Steph Lee - Host Agency Reviews

Steph grew up in the travel industry. She worked with thousands of agents in her role as a former host agency director before leaving in 2012 to start HAR. She's insatiably curious, loves her pups Fennec and Orion, and -- in case you haven't noticed -- is pretty quirky and free-spirited.

If you’re looking for Steph, she leaves a trace where ever she goes! You can find her on Facebook, Instagram, LinkedIn and Pinterest as 'iamstephly'. 🙂 She doesn't do TikTok as no one would ever see her again.

Steph Lee - Host Agency Reviews

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THE JOURNAL

Travel Advisor Resources

Travel Agent Commission: How Does it Work?

Fora Author Fora Travel

The Modern Travel Agency

Fora Travel

https://www.foratravel.com/the-journal/travel-agent-commission

A handful of beachgoers relax on the sand, looking out over calm waters and flanked by historic structrures

Not sure how a travel agent commission works? Is it the only way travel agents and advisors earn income? Here, we break it down for you.

Want to start earning income for your passion? Apply to become a Fora Advisor and kick off the ultimate career in travel.

How do travel agent commissions work?

A supplier — hotels, rental car agencies and so on — pays a travel agent commission for making a reservation on behalf of a client (or group of clients; here’s why group bookings are great ). The amount is typically a percentage of whatever the service costs, and can vary widely depending on the type of booking. 

(Curious about how to become a travel agent in the first place? Our guide has all the intel you need.)

Who pays a travel agent commission?

Hotels are the most common suppliers travel agents work with. But there are also rental car agencies, airlines, tour operators and much more. 

Many businesses recognize the value in paying a facilitator to book their services for a client and treat travel agent commissions the same way they might advertising costs. You’ll sometimes even find that event venues, especially in places like Las Vegas, and businesses that are adjacent to travel also offer commissions to travel agents.

What’s a typical travel agent commission?

A minimalist style with slight Japanese influences permeates a private dining table a luxe German hotel

For hotels, five to 10 percent is about average. For other suppliers, it changes with the service and brand. Broadly, travel agent commission percentages run anywhere from one to twenty percent.

(P.S. Wondering how much travel agents make per booking ? Check out our guide.)

Do travel agents charge more on top of a commission?

Travel agent commission rates are typically set in stone. That being said, commissions are not the only way travel agents make money. Most remote travel agents offer custom itinerary building and other planning services as well. The exact amount varies by travel agent, but many Fora Advisors charge a fee per week of travel planned. 

Intrigued by the idea of building custom travel itineraries and getting paid for it? Apply to become a Fora Advisor .

( How much do travel agents make ? What’s the typical Fora travel advisor salary ? Our guides have help answer these questions.)

Do travel agents get paid for things like selling travel insurance, too? What else counts as commissionable revenue?

Absolutely. Selling travel insurance not only makes sense for the client (especially for more expensive trips), but it can also be a great way to boost your commissionable income.

As for other sources of travel agent commissions, our guide to all the types of bookings you can make as a Fora Advisor has more details.

Are there different types of travel agent commissions?

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Technically, there are three different types of commissions travel agents encounter, although only two are common.

Standard commissions

Standard commissions are what we’ve covered thus far. They represent a small percentage, usually between five and 10 percent of the total sale (before tax, if applicable). 

With few exceptions, standard commissions are most favored by travel agents because they usually offer the most value, and come at no additional cost to the client.

Flat commission rates

Flat commission rates are set amounts that hotels and other suppliers pay travel agents for bookings. These rates are independent of the total cost the client is paying, so regardless of when the service is provided, the agent is earning the same amount. This essentially negates any potential boost to the commission if the client is staying during a popular period, when hotels usually raise prices.

There can be some nuance to flat rates, though. For example, a hotel may pay per hotel room so the agent at least earns more for a larger booking. 

These types of rates are most common in Europe, particularly among older hotels, and you won’t often encounter them with domestic travel.

Tiered commission rates

Tiered commission rates are fairly uncommon for travel agents to encounter; they’re much more popular among other careers in travel and tourism and are typically paid by wholesalers rather than individual suppliers. 

With tiered rates, t he commission rate changes with the number of tickets sold for a service, which might be a group tour, cruise or hotel block. 

On the flip side, travel agents at the top of their game may be more likely to encounter these types of commissions, usually in the context of large group bookings or corporate events (learn how to master the art of group bookings ). 

Usually this type of travel agent commission isn’t something new agents need to worry about.

Travel agent commission FAQs

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Have more questions about travel agent commissions or adjacent topics? We have answers.

How else do travel agents make money?

As mentioned earlier, travel agents can also charge fees for planning itineraries. It’s also not unheard of for agents to charge extra fees for large group bookings since these require more time to orchestrate — which brings up an important point: the best travel agents don’t charge their clients arbitrary fees; there should be justification for the extra costs.

Between commissions and planning fees, you can see why travel agents are among the more lucrative jobs in the travel industry .

What percentage of a commission do travel agents usually get? Is Fora different?

Five to 10 percent is a normal travel agent commission. Fora Advisors do occasionally earn a higher commission for booking certain partner hotels because of our supplier relationships. 

Sound intriguing? Apply to become a Fora Advisor .

How much can you charge as a travel agent to use your services?

This varies by advisor and the exact service provided. People in some travel agent jobs or travel agent niches charge higher fees. For example, luxury travel advisors may have higher fees because they’re offering an elevated degree of service. Essentially, discerning clients pay more for the white-glove treatment. The same can also be said for corporate travel agents .

(Learn how to become a luxury travel agent .)

Does a vacation cost more if someone books through a travel agent?

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One of the myths about booking through a travel agent is that they always upsell the price of the trip. In reality, advisors are paid by the hotel, so having an advisor book your accommodations comes at no extra cost to the client.

(BTW: check out the myths about becoming a travel advisor .)

Can you make a living off commissions as a travel agent? Do all travel agents rely on commissions?

You can certainly turn travel advising into a full-time career, as many of our advisors have.

(Looking for tips for how to be a successful travel advisor ? Read our guide.)

Do all host agencies take a percentage of a travel agent’s commission?

This is standard practice in the industry, and typically helps fund the host agency’s services. In Fora’s case, this percentage goes toward maintaining Fora profiles, our proprietary booking platform, supplier partnerships and so much more. Fora takes a 30% slice, then 20% once advisors have reached a certain bookings threshold (which is a far lower percentage than industry standard).

Our guide to how much it costs to become a travel agent has more details.

How does a commission pay schedule work at most host agencies? How does Fora handle this?

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Travel agent commissions are typically paid by the supplier after the client uses their service (e.g., after they stay at the hotel or return a rental car). Across the industry, it’s unfortunately common for some hotels and other suppliers to drag their feet when it comes to paying out commissions (check out how travel agents get paid to learn more).

At Fora, we support our advisors and invoice hotels for you, allowing you to focus on the fun parts of the job. In other words, we worry about chasing commissions and getting you paid, so you don't have to.

(Curious about other reasons to become a Fora Advisor ? Hear it from our existing travel advisors.)

How is the commission rate usually determined for travel agents?

Travel agent commissions are usually set long before the agent ever enters the picture. This often comes down to a private agreement between a host agency (like Fora) and the supplier. 

In rare cases, usually involving independent or new hotels that don’t have an existing commission policy, a travel advisor may be able to negotiate a commission rate.

Are commissions calculated before or after taxes?

Travel agent commissions are calculated before taxes, as the latter is money the supplier doesn’t actually see.

Can suppliers’ commission rates change?

A flat grassland populated by wooly horses stops before a tight river. On the opposite shore, massive, snowy mountains jut out of the ground

Certainly, though existing bookings typically aren’t affected, perhaps unless they’re part of a promotion. 

Do online travel agencies (OTAs) charge suppliers commissions?

Yes, like you wouldn’t believe. Whereas travel advisors charge hotels between five and 10 percent commission on average, online travel agencies like Expedia and Booking.com charge suppliers as much as 30 percent commission. 

It’s one of the reasons suppliers much prefer their bookings come from travel advisors — and why Fora Advisors can offer awesome perks at the coolest hotels around the world.

Ready to start earning travel agent commission? Become a Fora Advisor

Can’t wait to earn your first travel agent commission? Apply to become a Fora Advisor today and get your travel career rolling.

Alternatively, check out these travel advisor resources if you’re still testing the waters:

How Long Does It Take to Become a Travel Agent?  

How to Become a Travel Agent Online: Fora's Full Guide  

How Do Travel Agents Get Clients? Fora's Top 5 Tips  

How to Become a Disney Travel Agent  

Travel Agent Training Guide: What are Your Options?  

Book a Cruise With a Virgin Voyages Travel Agent  

Is Being a Travel Agent Worth It? Fora Discuses the Pros & Cons

Are you the go-to person for travel tips?

Transform your passion for travel into your dream job. We'll set you up with everything you need to succeed as a travel advisor. From training to top-notch tech, marketing assets, community, commission tracking & payments (and more), we've got you.

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Visit Moscow Tours

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Moscow-Saint Peterburg tour package 8 days/7 nights BEST DEAL (15th of MAY-22d of MAY only)

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Moscow - Velikiy Novgorod - Saint Petersburg tour package 9 days/8 nights

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Moscow in 1 Day (Walking tour)

Welcome to visit moscow tours.

We provide authentic, informative and memorable tour packages and city tours, at very competitive prices. Visit Moscow Tours are available not only in Moscow, but also in other cities: Saint Petersburg, Kazan, Suzdal and Sergiev Posad.  We also organise customised individual programs tailored just for you.

Our guests come in large groups, small private groups, as couples or as single travellers. We take care of and treat our guests with respect in a friendly and warm family environment. We show people our beautiful cities with passion and deep knowledge of their history, culture and traditions.

Our guides are extremely hospitable, helpful and well-informed. They are simply the best because only by providing the best services can we make the world fall in love with Russia. And we are very happy when our guests say that they will definitely come back to Russia and that they will tell all their friends how great Russia is! That is what inspires us to put even more dedication and hard work into our tours, knowing that what we do is positive and meaningful.

Our classic tours include tours of Moscow and Saint Petersburg, two main Russian cities.

Moscow is a big and busy  megalopolis and Russia’s capital city, where more than 12 million people live and work. Our capital city is happening place; it is mysterious, elegant, luxurious, fashionable, clean and bright, with its unique legends, traditions and events. It is with great pride that we show the Red Square and the Kremlin, our Underground and Tretyakovskaya Gallery, among other stunning attractions.

Saint Petersburg is our second capital,  the second largest city in the Russian Federation. This wonderful city has a strong and lively aristocratic spirit, uniquely Russian royal architecture, magnificent museums and theatres. Saint Petersburg bears the royal heritage of Russia, which can be felt in its air, its streets, parks, monuments, museums and citizens.  In Saint Petersburg tours, we will take you to the Hermitage, Peter and Paul Fortress, Faberge Museum and Orthodox Cathedrals. We’re sure you will love it!

If you have a few more days to spare, venture into the dreamy Russian countryside in Suzdal or Sergiev Posad. Suzdal is a small town with a population of about ten thousand people, situated on less than 15 square kilometres. This tiny area is home to 53 historic cathedrals, five monasteries and a kremlin. Church domes are visible like mushrooms from anywhere and everywhere in the town like in a fairy tale. No wonder Suzdal is called the ‘Town Museum”.  It is definitely worth visiting!

Just try any of Visit Moscow Tours’ tour packages or any individual city tour, and we promise that you will want to come back to Russia again.  Russia is huge with countless amazing places to visit. There are so many unique experiences to be had and energies to be felt that one tour is definitely not enough to explore this vast land. It is also a very safe destination to travel, and we have a tradition of warm hospitality. Our people adore and take care of visitors as our own guests, and even if they do not know your language very well, they still try to be helpful and hospitable.

Our guides will show you the most interesting attractions and historical places, taking you on a journey to the past to enjoy stories of medieval times, the Romanov monarchy, the Soviet Era. And of course, we will show you the contemporary life of our country through authentic local experiences.

We look forward to meeting you soon!

8 interesting facts about the Hermitage

IMAGES

  1. Explaining Travel Agent Commissions [Infographic + Charts]

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  2. Explaining Travel Agent Commissions [Infographic + Charts] (2022)

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  3. Explaining Travel Agent Commissions [Infographic + Charts]

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  4. Travel Guard: Travel Weekly

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  5. Travel Guard

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  6. Travel Agency Commission Settlement: How to Measure the Effectiveness

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    If you have any questions about your current coverage, call your insurer or insurance agent or broker. Coverage is offered by Travel Guard Group, Inc. (Travel Guard). California lic. no.0B93606, 3300 Business Park Drive, Stevens Point, WI 54482, www.travelguard.com. CA DOI toll free number: 800-927-HELP.

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    Here's a general rule of thumb on the airline ticket commission range you can expect as a travel advisor: Domestic: 0-5%. International: 10-22%. In Feb. 2018, Delta announced cuts in commissions on international flights to travel agencies.

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    The Food Tour by Visit Moscow Tours is a perfect chance to sample all the variety of cuisines of the former Soviet Republics and to understand the Russian customs, traditions and ways of life. You will taste Russian, Ukrainian and Georgian food. Meeting time: from 9 a.m. to 4 p.m. Meeting point:

  23. My trip to Moscow, Russia Dec. 2021

    Moscow, Yaroslavl, Uglich, Kirrilov, Kizhi Is., Mandrogi, St. Petersburg, Pushkin (Tsarskoye Selo). And then on to Helsinki and Talinn. I came of age in the 50's-60's -- the Cold War -- and when I stood in the Moscow Kremlin and Red Square I remarked that I had never believed I would find myself there.