Show me the money!

There is a pretty wide range of remuneration formulas for travel agents in Canada. While there has been lots written about the average salary for a travel agent, most surveys and industry experts generally agree it is somewhere between $24,000 to $35,000 annually. No doubt, there are many exceptions to this and certainly there are travel agents who make a lot more.

There are so many factors that can affect what an agent earns….what type of agency do they work for? Is their commission split with the agency owner? (Most certainly YES in the majority of cases)  What type of product are they selling?  Do they have commercial accounts? Group business? Are they selling FIT and consolidator fares?  These are just a few of the many factors that can enable an agent to earn considerably more than the average salary.

Let’s take an agent who works in a bricks and mortar agency. If the average agent sells about $750,000 in a year, assuming an average 10 per cent commission rate (which might be high) the agent earns $75,000 on that business. Yet most are only taking home the average salary mentioned above – $24K to $35K. So where is the rest going?

The answer is to the agency they work for; in fairness, it goes to cover many costs such as office location, systems, telephony, marketing, website, etc. In the example above, the agency is only paying agents about 33 per cent to 40 per cent 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.

A reason to consider home-based

In the world of host agencies, there are many business models, but from my research, I have found that some agents are paid as low as 34 per cent of their commissions earned and some are as high as 100 per cent of the commissions earned. The average is probably 70 – 80 per cent.

Another concern is that many agencies only pay their agents monthly, and some only pay them after the customer has travelled, making the agent wait months in some cases.  A few pay their agents twice a month, and by direct deposit.

As you can see, it pays to shop around and ask the right questions as it can make a big impact on your quality of life, your cash flow and your happiness!