Show me the money! Are you getting your fair share of commission?
Wednesday, April 20, 2016
What is the average salary or earnings for a travel agent? Most estimates are set at somewhere between $24,000 and $35,000. There are agents who make more, some of them a lot more, but this is generally agreed to be the average.
Of course many factors are relevant to consider. What type of agency does the agent work for? Is their commission split with the agency owner? What type of product are they selling? Does the agent have commercial accounts? Are they doing a lot of group business? Are they selling FIT and consolidator fares?
As an example, let’s look at an agent who works in a bricks-and-mortar agency selling mostly leisure. If the average agent sells about $750,000 in a year, assuming an average 10% commission rate (which might be high) the agent earns $75,000 on that business. Yet most are only taking home the average $24k to $35k. So where’s the rest of it going?
It is going to the agency, which is only paying the agent 33% to 40% of the commission they are earning. And these agents are in most cases employees, paying taxes with no tax write-offs.
Add to that the requirement to work regular hours, and often on weekends or evenings, and you can begin to understand why a lot of agents are considering looking at the home-based agent model.
There are many business models out there but when I ask around, I have found that some agents are paid as low as 34% of their commissions earned and some home based agents can earn as high as 100% of the commissions earned. The average is probably 70 – 80%.
Many agencies only pay their agencies monthly, and some only pay them after the customer has travelled, making the agent wait months. Some pay twice a month, and by direct deposit.
In other words, it pays to shop around. If you are going to work hard and sell a lot of travel, why not be in a position to maximize your share? Think about going home-based. It can make a big impact on your quality of life, your cash flow and your happiness!
Are you a home-based agent?
This article appears in Sphere, Travelweek’s monthly e-newsletter for home-based agents.
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Jill Wykes is a travel industry veteran who has held a series of senior management portfolios in travel corporations. A former chairman of the Travel Industry Council of Ontario, she is now an independent communications consultant and writer since retiring in 2011.
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