Travel agencies & outside sales agents

Now let’s talk about how a travel agency is accredited and makes it money. I’d also like to examine where the agency personnel both in the office agents and the home based ones fit in the mix.

A travel agency is actually a legal relationship in which one person (the agency or agent) acts for another (the agency’s client) in a business dealing with a third party (the travel suppliers). In today’s business environment the travel suppliers (airlines, cruise lines, tour operators, hotels & so forth) authorize approved accredited agency to represent them and sell their products. In return for this representation service the suppliers (except most airlines) pay the agency a commission and in some instances reward them with overrides and free or reduced rate travel. NOTE: Frequently the commission is included in the base fare and is not added on by the agency so the sales price is generally the same from one agency to another as well as with most on-line agencies. However some very knowledgeable agents who know a trick or two can actually save you money. When selling a commissionable product most agencies do not charge a service fee. A service fee is generally applied when they sell a non commissionable product like an airline ticket and most on-line vendors are doing the same.

The two major authorities that issue agency credentials are the Airlines Reporting Corporation (www.arccorp.com) and the International Air Transport Association (www.iata.org). To obtain ARC and/or IATA certification some of the processes include completing an application, passing a key personnel and security inspection, have adequate working capital, be open for business, and have a certified airline ticketing expert on your staff. There are other requirements but space requirements prohibit me from going into greater detail.

Once approved the agency receives a unique ARC/IATA identification number and is now approved to sell travel. It is this unique id number that both the in agency staff and outside home based agents use when reserving travel for their customers. It identifies them as professional agents of an approved agency and the supplier deal with them accordingly.

To increase revenue and expand their markets aggressive agency owners and managers are now employing outside (or home based) travel agents to help sell the travel products. Many legitimate travel agencies offer this service plus a wide range of other options at no charge to the outside agent. The agency benefits from increased sales and commissions and the travel agent earns a share of the agency’s commission from the trips that they have sold. This is a completely legal relationship and I’ll cover more about the host agency and the outside sale agent partnership a little later.

The largest investment that beginning home based agents will have to make is their time. That’s time to learn the business, the different suppliers and the differences between them, the destinations, lodging options, meals, attractions and the sales process. The rewards can be cash along with free or reduced rate travel. A modest payment to your host agency for business cards or liability insurance is a fair deal.

Fire away and email me your questions at call@ohio.edu or call my office at 740.533.4559. Happy travels!