April 18, 2019 Blog

Anyone who has read more than one or two things I have written or heard me speak knows I rarely talk about travel products (cruise lines, destinations, hotels, etc.). Why? It’s not because I don’t love them – I do! It is because you get PLENTY of that in your mailbox every single day. You get it on social media. Your host, franchise, and/or consortium spend lots of time talking about it. That’s not what you need from me!

What I like to focus on is what is rarely talked about: the business side of travel. How to really use social media. How to make that trade show investment (money AND time) pay off. How to charge fees. You get the idea. This is what makes the difference between those who are profitable and those who work 80 hours each week to bring in $40,000 per year.

If you and every agent you know are working all the time and making very little money, you may think that is the norm in the industry. THAT’S NOT TRUE! There are lots of agents out there who are putting 6 figures in their pockets each year and they are not working 7 days a week to do it. Unfortunately, they are the few, not the many.

Too many agents go the old-school route of signing up with a host agency and then post on social media, “Hi! I’m a travel agent!” and wait on their friends and family to call them for guidance. Sorry, that doesn’t work. It just doesn’t. You might get a booking or two, but that is not enough to have a business. That’s a hobby.

Most of those people thought they would sign up with a host agency and the host agency would teach them how to have a successful travel business. That’s not what host agencies do! They provide credentials and back office support to experienced agents. If you want to learn to do something, you need a training program.

But here’s where it gets murky. After an agent signs up with a host agency, they spend hours upon hours taking classes about travel products. They could wallpaper their house with the certificates they earn, but they don’t have anyone to sell to, and they aren’t making any money. But they are taking lots of classes so they feel like they are learning what they need to in order to be successful.

Sure, they make a booking here or there, but when they realize how much money is going in their pocket, they realize what they have is a hobby, not a business.

Here’s a reality check for you. The average yield on bookings made with a host agency is around 13% because not everything in a booking is commissionable. Let’s look at how that works out:

 

Total Sales Total Commission Your Income
$50,000 $6,500 $5,200
$100,000 $13,000 $10,400
$150,000 $19,500 $15,600

 

While this isn’t a lot of money going in your pocket compared to the amount of sales, it’s a start. It means you have some clients to assist.

But there are a lot of travel agents out there with hosts who aren’t generating $100,000 in sales. Why? They never focused on their business. They don’t know how to market themselves. They have lots of knowledge and could help people if they just had clients to work with.

As someone who has been in this industry for 18 years and had my own business for 7 years in a different industry before that, and I have a BS in Business Administration, I can tell you quite confidently that the travel industry is different than any other industry.  If you don’t know the rules and what works and what doesn’t, you will just be spinning your wheels!

How does a person go about learning to run a successful travel business? The ultimate win would be if all host agencies provided that kind of education. But most of them don’t provide any business training. Why? For most it is because they don’t have the bandwidth. Vendors don’t provide that training so you have to do it yourself. And honestly, for many providing vendor training is an income stream for them. So that’s what they put their sole focus on.

That’s one of the big reasons that Gifted Travel Network is different. Our business was designed from day one to provide a steady stream of business education to our members.

If you haven’t cracked that $100,000 level yet, you need to be looking for a training program not just a host agency. If you are brand new to the industry, you aren’t even ready for a host agency yet. You need to learn how to get a business off the ground first. What kind of clients are you going to serve? How can you help them? How will you reach them? Our Travel MBA program offers a unique combination of mentorship and online courses. There isn’t anything else like it in the industry.

If you are happily hosted where you are, you don’t have to change hosts to get business training! Make sure you sign up for Travel Entrepreneurship Week and join GIFTE when membership opens again. You will get exactly what you need to up-level your business.

The number one thing you can do to make more money: recognize that you are running a travel business and put the time and passion into making it a successful one. Don’t beat yourself up for not knowing how to run a travel business, no one does without guidance! But with the right training anyone can learn. Take the first step with Travel Entrepreneurship Week, put some of those skills learned into practice, and watch your business take off!

By Sandy Saburn