Travel agencies charge commissions to both clients and themselves to cover the cost of booking non-commissioned travel products and performing research. Some travel providers do not pay commissions, so agents charge fees to clients. Complex travel services may also require fees to cover the time spent planning. Agencies may also pay fees to host agencies or professional organizations.
Travel agency commissions include commissions paid by both consumers and travel agencies themselves. Many travel agencies charge clients commissions to offset the cost of booking travel products that do not pay a commission, as well as for the time and expense of performing travel research or communicating with suppliers to arrange for special accommodations. In addition to consumer commissions, travel agencies themselves may pay commissions in the form of split commissions with host agencies, host agency membership fees, or franchise fees. Agencies may also pay application and credit card processing fees to professional travel organizations.
In most cases, a travel agent will earn the majority of their income through commissions paid by travel service providers such as hotels and cruise lines. Some travel providers, however, do not pay a travel agent a commission if they book travel on behalf of their client. Because this represents a potential loss to the agent, many charge travel agent fees to consumers for each non-commissioned booking the travel agent has to make. For example, most commercial airlines no longer pay travel agents commissions, so many travel agencies now charge a small courtesy fee for each air ticket booked.
Many consumers are required to pay travel agent fees when booking highly complex travel services, particularly if the arrangements require significant research by the travel agent. Some travelers choose to visit exotic destinations or plan long trips to different places. This type of travel may require the efforts of a professional travel agent to determine visa requirements, book quality accommodations, and arrange local transportation. Since this can take several hours of work, some travel agents will require consumers to pay travel agent fees to cover the time spent planning the trip. Additionally, clients may also be required to cover any expenses incurred by the travel agent during the search and booking process.
Travel agents and travel agencies may also be required to pay various types of commissions. Independent travel agents often work with a host agency that provides technology support, access to travel suppliers, and liability coverage to individual agents. Agents can pay a variety of fees to their host agency to cover the cost of the services they receive. These agents may also be required to split their commissions with the host agency. The agencies themselves may choose to participate in various professional certificate programs or take advantage of the credit card processing services offered by industry associations. In both cases, the agency will pay one or more types of fees to the organization providing these services.
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