How do travel agents make profit?

score:5

Accepted answer

Having consulted for a few travel agencies, here is some insight:

  1. The bigger the agency, the more discounts they get on tickets. This means that the more the agency is popular, the more the airlines are willing to give them a rate because they sell out their allocation.

  2. Some agencies reserve (block) slots in advance which gives them a discounted price. This is usually done during the busy summer travel season. Then it is upon the agency to sell of their allocation. Note that if they don't sell off their allocation, they are stuck with the seats - they can't be used on other dates (the block is for a date range).

Agents partner with travel networks (Galileo, Sabre, etc.) to which airlines feed their availability.

Agents then have partnerships with particular airlines to be able to issue tickets on their behalf. Agents can have partnerships with multiple airlines and cruise/hotel networks.

If you are looking for a cheap fare, here is what you need to watch out for:

  1. Timing (how quickly do you want to fly).
  2. Route (a city pair will have multiple flights).
  3. Season (during travel seasons, seats fill up quick so prices shoot up).
  4. The agent. In this respect, the cheapest option is the airline direct (either through their website, or their own offices), then you can look at online travel aggregator websites like Expedia and Travelocity, and then finally a travel agent.

Upvote:3

Some travel agents have negotiated fares with airlines, which means that they get specific prices at which they sell the tickets, these prices can be much lower than the prices online. As for your questions as to how flight agents make profit - there are two common ways. Firstly the airline gives flight agents commission on the tickets you sell, which is usually very low (0.1%) if anything at all, however some airlines do give more (5%). These percentages are calculated on the base fare of the ticket, thus excluding the vat. The other way that flight agent make profit is they add an amount of money on to the negotiated fare from the airline, which is then the commission they make on the sale. Usually flight agents will check online to see what flight prices are and adjust their commission accordingly, so that they are not more expensive than online prices.

More post

Search Posts

Related post