Though this article holds true, the travel industry, like many others, has taken a financial hit due to COVID-19, resulting in less income for travel agents and several other professions.
How do travel agents make money? After all, because of the internet, we can book our tickets at the tap of an icon, research different hotels, and choose the best one depending on the reviews it receives on, say, Tripadvisor or Expedia.
Before we get into the nitty-gritty of how they make money today — and indeed who uses them today — it would be helpful to get some historical context on this career.
A Brief History
The psychology of travel is good for our health and well-being, but before the invention of the internet, planning a trip was burdensome.
A person had to stand in line to buy tickets, and who knew the hotel quality of a booking if a friend recommended it.
How could you even know where to go?
To make things simpler, travel agents appeared on the scene. They had contacts everywhere to book airline tickets, hotel rooms, tours, or cruises.
The most significant commission they received was from airlines. It made a sizeable chunk of their total income.
But after the Dotcom boom and proliferation of the internet, things changed and not for the better for travel agents. Airlines canceled the commissions because travelers could book their own tickets.
Potential tourists could also book hotels online, thanks to online travel agencies cropping up everywhere. Now, they can carefully scrutinize the hotels, compare prices and reviews, and choose the best rate.
All this meant that travel agents would be left in the lurch.
It didn’t take time for experts to predict the demise of travel agencies.
In 2000, an industry survey showed how bad it was: only 14 percent of travel agents said they would encourage their friends and family to get into their profession. It was dying.
But that was not to be.
The travel agent profession made a comeback, but how?
A Forbes article showed how sought after this is as a “hot second career” if you want to “make six figures.”
Why is that?
There are several reasons for it, not least because of the internet.
First, more internet connectivity means that you’re working longer hours.
Work does not end the minute you step out of your office, but instead, follows you home in a little portable device. When both partners are out working long hours, it translates to having less time to relax and plan the vacation. Especially with the information overload today — best offers, best discounts, best rates, cheapest flights, best-rated tours — research can be a daunting task.
Second, there is more emphasis nowadays on experiential travel: you would have to know (a) what’s available, and (b) which experiences you would like to be involved in. It’s not as simple as checking the best rates or the cheapest airline ticket.
Third, today’s social media is all about the visual. If it’s not on social media, it didn’t happen. Therefore, you’d want to show off gorgeous locales and off-the-radar locations that are not very well known.
Who can provide such detailed information? Travel Agents.
Fourth, personal touch. Internet is convenient, yes. But being a travel agent is about eliciting trust and managing relationships. They provide a security net. When things go south, you can be reassured that there’s a real person you can contact. It’s more appealing than being on hold, waiting for a customer rep of a faceless online company to come on call, and having to explain your ordeal to them.
Fifth, it’s an overwhelming task to do all the planning and booking for a big group of people, whether for a large family or corporate outings.
For all these reasons and more, many travelers prefer outsourcing most of the planning to the experts.
How Do Travel Agents Make Money?
Travel agents have reestablished themselves and made a fashionable comeback, but how does a travel agent make money? The most important thing to remember is that they have multiple sources of income.