Travel agent commissions are the primary way agents earn income from bookings. Suppliers like hotels, tour operators, cruises, and rental car agencies pay agents a percentage of each booking made on behalf of clients. This doesn't mean the clients pay more. Because travel agents and host agencies have a strong network of clients, suppliers pay commission on the same rates clients see.
Here's everything you need to know about how commissions work, typical commission rates, and how to maximize your earning potential.
How do travel agent commissions work?
A supplier pays a travel agent commission for making a reservation on behalf of a client or group. These suppliers and or partners can be any travel-related business that offers commissionable products, like hotels, cruises, rental cars, travel insurance, vacation packages, flights, concerts, and tour activities.
The commission amount is typically a percentage of whatever the service costs and can vary depending on the type of booking and contracted commission rates. Suppliers generally pay out commissions to the travel advisor or their host agency after a client has completed their trip.
Who pays travel agents commission?
Hotels are the most common suppliers that pay commission. But there are also rental car agencies, airlines, tour operators, travel insurance providers, and many other tourism businesses that offer commissions to travel agents.
Many businesses recognize the value in paying a facilitator to book their services for a client and treat travel agent commissions the same as advertising and marketing costs. You’ll sometimes even find that travel-related businesses and event venues, especially in places like Las Vegas, also offer commissions to travel agents.
How much is a typical travel agent commission?
For hotels, 5%–10% of the total booking is about average. (Fora Advisors average 12% per booking). For other suppliers, the commission rate changes with the service and brand, ranging anywhere from 1% to 20%.
Do travel agents only earn money from commissions?
Commissions are just one way that travel advisors get paid. Most 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 trip-planning fee.
What kind of trips do Fora Advisors book?
Every hotel, cruise, or commissionable activity you book as a Fora Advisor earns you money. Whether it's a single hotel booking or a completely customized itinerary, you determine the level of service for each client. New advisors usually get started by doing training and booking trips for people they already know.
Your colleague’s spring break
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Average commission
Your split
Your friend’s hotel stay
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Your neighbor’s safari
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Your parents' cruise
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Your colleague’s spring break
Trip price
Average commission
Your split
Your friend’s hotel stay
Trip price
Average commission
Your split
Your neighbor’s safari
Trip price
Average commission
Your split
Your parents' cruise
Trip price
Average commission
Your split
What are the different types of travel agent commission rates?
There are three different types of commissions travel agents encounter, although standard and flat commissions are the most common.
Standard commission
Standard commissions represent a small percentage of the total booking, usually 5%–10% of the total sale (before tax, if applicable).
With few exceptions, standard commissions are most favored by travel agents because this type of commission usually offers the most value and come at no additional cost to the client.
Flat commission
Flat commission rates are set dollar amounts that hotels and other suppliers pay travel agents per booking. 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 multiple rooms. These types of commission rates are most common in Europe, particularly among older hotels, and you won’t often encounter them with domestic travel.
Tiered commission
With tiered rates, the commission rate changes with the number sold for a service, which might be a group tour, cruise, or hotel block.
Tiered commission rates are less common for travel agents. They’re much more popular among other careers in travel and tourism and are typically paid by wholesalers rather than individual suppliers.
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.
How do host agencies affect travel agent commissions?
Host agencies generally have agreements or contracts with suppliers. For example, Fora has partnerships with 7,000+ suppliers, including hotels, cruise lines, tour operators, and other providers. The commission rates for these partners are set between Fora and the specific partner, so travel agents don’t have to negotiate rates themselves.
In exchange for access to these negotiated commission rates, host agencies gets a percentage of the agent’s commission. For example, advisors who start at Fora with the standard 70/30 commission split receive 70% of their commission, while Fora gets 30%. When advisors reach a certain sales volume, the advisor will get 80% and Fora 20% of the commission earned. These portions help fund the host agency’s services, such as training, invoicing suppliers, and collecting commission.
Do online booking platforms receive commissions from suppliers?
Yes, online travel agencies (OTAs) also receive commissions, often at a higher rate than travel advisors. Rather than charging hotels 5%–10% commission on average, OTAs like Booking.com charge suppliers as much as 30% commission.
This inflated commission for OTAs is one of many reasons suppliers prefer working with travel advisors. Host agencies develop close relationships with hotel brands and gain access to certain perks that aren't available through OTAs. These partnerships are the reason why Fora Advisors can offer their clients perks at the best hotels around the world.
