How Much Money Can I Earn as a Home Based Travel Advisor in 2023?
How Much Money Can a Travel Professional Make in 2023?
Written By: Tom Ogg, Co-Founder and Co-Owner – FindaHostTravelAgency.com
Being a travel agent in 2023 offers numerous benefits and opportunities. The travel industry is expected to recover and grow in the coming years after being affected by the COVID pandemic. As a travel agent, you will have the opportunity to help people plan their dream vacations and provide them with unique travel experiences. Additionally, you can earn an excellent income, as travel suppliers are offering attractive compensation for business generated by agents. Furthermore, being a travel agent allows for flexibility and creativity in your career, as you can specialize in specific types of travel or destinations. With the growing demand for travel, this year is an excellent time to consider a career as a travel agent.
In 2023, the earnings of a home-based travel agent in the United States can vary greatly based on factors such as experience, market demand, and the amount of sales made. Some home-based travel agents earn a small amount of commission from each booking, while others earn a base salary with commission. On average, home-based travel agents can earn an average of $37,000 or more per year, with the potential to earn more if they have a high volume of sales and repeat clients.
To explain this in the most basic terms, profits for a home-based travel agent are earned through commissions paid by suppliers for handling sales on their behalf. Each supplier offers different remuneration programs. Additionally, some suppliers may pay overrides or extra commission based on the total productivity of the agent. Many suppliers have override programs that are based on the volume of business that the agent books with them. For instance, a supplier may pay a 10% commission to an agent for the first booking, and then provide a sliding scale of overrides ranging from 1% to as much as 6 or 8% on top of the base commission.
Also, suppliers may have additional funds available for promotions and promotional materials, on top of the commissions and overrides paid to the agent. The important part is to tap into these base commissions, overrides, and promotional funds to maximize revenue. You can achieve this by specializing in a high-yielding and specific niche that offers significant returns.
Let’s Talk About Salaries of a Travel Agent
In most businesses employees are paid a salary and they are easily measured to find the average, high and low salaries.. However, the travel agent business is primarily independent contractors who are not paid a salary, but run their operation as a business. This makes it much more difficult to ascertain the average, high and low income for travel agents. To do so, one would have to inspect the financial statements of the business to discern its profitability. This can be done by adding back in the benefits received by the business and owners.
Since no one wants to pay more taxes, it is a safe bet that the agency’s accountant will take advantage of of every allowable deduction to save their client money. To make it more difficult to determine the average salary, many travel agencies operate as Subchapter S Corps or C Corps and pay themselves a low salary and then take the rest of the profit as a distribution. This saves the 15.3% self employment tax on the distribution amount which is quite meaningful.
The bottom line is that you can makes as much or as little as you would like from your business. Having a well thought out business plan, a niche market with high yields and effective marketing will yield you spectacular results. A great example is Cruise Planner’s top agent who sold $24 million in sales for 2023 with only 3 associates. While this example is exceptional, it is an illustration of what can be accomplished.
15 Types of Travel That You Can Sell to Generate a Meaningful Income
Cruises
Going on a cruise can be a fantastic vacation option for many reasons. First and foremost, cruises offer the convenience of having multiple destinations included in one vacation. This allows travelers to visit several ports without the hassle of packing and unpacking multiple times. Cruises also often offer a wide range of on-board activities, entertainment, and dining options, providing guests with a one-stop-shop for all their vacation needs. Mass-market cruise lines, such as Carnival, Royal Caribbean, and NCL, usually offer a 10% commission based on the base fare but not on the non commissionable fares (NCFs), but rising NCFs have lowered the overall commission.. For higher earnings, consider selling luxury or niche cruise markets with a true 10% base commission. The highly competitive river cruise market offers great margins as well. Productive travel agents can benefit from override programs and promotions by cruise lines. As the industry recovers from pandemic losses, Cruise lines are offering generous commission and incentives. If selling cruises is going to be your focus, be sure to read the Ogg’s books “Selling Cruises, Don’t Miss the Boat” and “Selling River Cruises”.
Tours
Tours offer the opportunity for clients to visit and experience new destinations in a structured and guided manner. They provide a level of security and ease, as the travel arrangements and itinerary are taken care of by the tour operator. Both packaged and Free Independent Travel (FIT) tours offer a minimum of 10% commission for travel agents. You may find tour companies that serve specific destinations or niches and earn more than 10%. Global tour operators like Globus offer tours to destinations worldwide. Most tour operators offer incentive programs and have funds for cooperative promotions and advertising. Focusing on complex FIT and escorted international tours is a great way to increase earnings, especially as international travel has picked up after the pandemic. Escorted tours are gaining popularity among clients seeking the security of a guided trip while traveling internationally.
All-Inclusive Resorts
All-inclusive resorts can offer several benefits for travelers. One of the main advantages is the convenience of having all expenses included in one upfront payment, eliminating the need to worry about budgeting for meals, drinks, and activities during the trip. This can make for a relaxing vacation experience. All-inclusive resorts also often offer a wide range of on-site activities, entertainment, and dining options, providing travelers with a one-stop-shop for all their vacation needs. The demand for all-inclusive resorts has skyrocketed, making it a lucrative market to specialize in. A travel agent specializing in luxury all-inclusive resorts can earn over 5 million in sales per year, as seen by one agent and his team of three independent agents. By partnering with operators like Apple Leisure Group, who handle all-inclusive resorts, they receive significant incentives and benefits. You can focus on a specific level of all-inclusiveness or a particular destination, but to truly succeed in this market, you must bring expert value to clients booking through you.
Groups
Traveling as a group can offer several benefits, including shared experiences and memories, increased safety and security. Group travel can be a lucrative opportunity, especially if you offer unique and complex international packages that meet clients’ needs. Many agents rely on tour operators to package groups and earn a commission. The real profits come from negotiating directly with suppliers and marking up the group, leading to commissions of 25-40%. The more complex and niche-specific the itinerary, with a significant added value from you, the more profitable it will be. Repeating the same itinerary can generate significant profits. Identifying a niche you have expertise and connections in is a key opportunity. If groups will be your focus be sure to read the Ogg’s book “Selling Group Travel”.
Niche Travel
By specializing in a particular type of travel, travel professionals can become experts in that area and offer a higher level of service and knowledge to clients. This also allows them to develop strong relationships with suppliers and providers, resulting in better deals and a more seamless travel experience for the clients. Additionally, targeting a specific niche can help travel agents differentiate themselves from their competitors and stand out in a crowded market. Advances in social media and internet search make marketing niche travel easier. Some possible travel niches to consider include:
Adventure Travel
Millennials and Gen Z are generations known for their love of adventure travel. They have grown up in a world with increased access to information and technology, allowing them to easily research and plan adventurous trips. They value experiences over material possessions and seek out new and unique destinations that offer the chance for personal growth and challenge. Examples of the activities that they enjoy are: hiking, bungee jumping, and extreme sports, often seeking out destinations that offer these experiences.
Bucket List Travel
Bucket list travel refers to traveling to places or experiencing activities that are on one’s personal “bucket list,” or list of things to do or see before one passes. This type of travel often involves seeking out unique and once-in-a-lifetime experiences, such as visiting exotic destinations, participating in adventure sports, or exploring cultural landmarks. Bucket list travel can also involve fulfilling personal dreams, such as visiting a childhood home, taking a cooking class in Thailand, or seeing the Northern Lights in Iceland. Bucket list travel can appeal to people of all ages, as everyone has unique interests and experiences they hope to achieve in their lifetime. However, the concept of a “bucket list” is most commonly associated with people in their later years who are looking to fulfill their travel goals.
Destination Weddings
A destination wedding can be an attractive option to many millennials. First, it provides a unique and intimate setting for a couple to exchange their vows and celebrate their love. Destination weddings also often offer beautiful locations, such as tropical beaches, historic castles, or scenic vineyards, which can make for breathtaking backdrops and memories that will last a lifetime. Plus, a destination wedding can double as a multi-day celebration and a mini-vacation for the couple and their guests. When selling destination weddings, an all-inclusive resort with a unique variation is the way to go.
Foodie Travel
Foodie travel is a growing trend where people travel to different destinations specifically to indulge in the local cuisine and try new dishes. This type of travel often involves visiting local markets, trying street food, and dining at renowned restaurants to taste the unique flavors and ingredients of a particular region. Foodie travelers are always on the lookout for unique and authentic dining experiences, and are often willing to go the extra mile to try new and exotic foods, so this is a great group to cater to when selling travel, because you can focus on food related activities.
LGBTQI+ Travel
LGBTQI+ (Lesbian, Gay, Bisexual, Transgender, Queer/Questioning, and Intersex) travel is a growing market that offers a welcoming and accepting environment for individuals who identify as part of the LGBTQI+ community. These travelers are seeking destinations that are open and inclusive, and provide a safe space where they can be themselves and enjoy their travels without fear of discrimination or prejudice. In recent years, many cities and countries have become more LGBTQI+-friendly, with many offering specific events and activities aimed at this community. From pride parades and festivals to LGBTQI+-owned and friendly accommodations, there are a range of options available to LGBTQI+ travelers looking to connect with others
Medical Tourism
Medical tourism refers to the practice of traveling to another country for medical treatment, typically to receive high-quality and affordable care not available or accessible in one’s home country. The popularity of medical tourism has grown in recent years, as advancements in technology and transportation have made it easier for patients to access healthcare services abroad. Countries such as the Philippines, Thailand, and Mexico are popular destinations for medical tourists, who can often receive treatment at a fraction of the cost compared to their home countries.
Sports Tourism
Sports tourists may travel to destinations to attend major events such as the Olympics, World Cup, or the Tour de France, or they may participate in adventure sports like surfing, skiing, or mountain biking. The growth of sports tourism has been driven by increased leisure time, the rise of adventure sports, and the growth of international sporting events. Destinations that cater to sports tourists often offer a range of amenities and services to support the needs of athletes and fans, including specialized accommodation, training facilities, and sporting events and activities.
Women Only Travel
Women-only travel is a type of travel that is designed specifically for women, offering them a safe, supportive, and empowering environment to explore new destinations. This type of travel often involves group tours, where women can join together to form friendships, share travel experiences, and offer each other support and encouragement.
Workations
Workation refers to the trend of combining work and vacation by taking a work-related trip that also offers opportunities for leisure and relaxation. It typically involves traveling to a destination with a relaxed atmosphere, comfortable accommodation, and good connectivity for remote work. The goal of workation is to balance work and play, allowing individuals to be productive while also experiencing new destinations and cultures. Many people choose workations as a way to escape the monotony of the daily routine, increase productivity, and improve their mental and physical well-being. Nomadic Travel is a form of a workation where the remote worker travels from destination to destination while working remotely.
Ecotourism
If your clients desire to explore the world while ensuring that their travels are environmentally responsible and sustainable, ecotourism might be for them. Ecotourism or ecological tourism is a type of travel that focuses on responsible and sustainable tourism in natural environments. Ecotourism also often involves staying in eco-friendly accommodations, such as lodges and campsites that are built using sustainable materials, and that use renewable energy sources and practice environmentally friendly waste management. It may also involve supporting local conservation projects, sustainable tourism initiatives, and purchasing local products and services to support the local economy. Ideal activities may include hiking, wildlife watching, bird watching, and other nature-based experiences that do not harm the environment or wildlife. Overall, ecotourism aims to promote environmental conservation and sustainability, while also providing a unique and authentic travel experience for visitors.
While there are other travel categories that offer great potential for income, to reach a six-figure profit as a home-based travel entrepreneur, it is necessary to streamline and efficiently handle high-value transactions. By doing so, you will reap the benefits of a substantial income.
What to expect in 2023 for the Travel Industry
As the COVID pandemic fades in the rear view mirror, demand for travel is exploding! The cruise lines are back and better than ever, the airlines are making tons of money, resorts are full and the entire world is now open for business. There is so much pent up demand that pricing has increased dramatically which generates higher and higher commissions from the sale of travel. There has never been a better time to start a travel business.