How do TA's Make Money

[Merv692]

I was reading the board on booking direct or through a travel agent. It sounds like the prices are the same. Even some TA's offer extras. My question is how do they make money?? Do they ge the cabins cheaper??

Thanks

Don

[jmrothermel]

Commission, just like most other sales.

 

 

~Jacqui~ Sent from my iPhone using Forums

[joepeka]

As mentioned, the cruise lines pay the TA's a commission for the booking. If the TA is offering a client "extras", it could be because the TA is taking it out of their commission.

[Tucker in Texas]

Sometimes they get group prices by blocking off a bunch of cabins and selling them individually.

 

Keep in mind that part of the fare is "non-commissionable." That would be port fees and government taxes, of course, but then more which is "overhead." They used to put that "overhead" into port fees/taxes and charge the passenger but the Florida Attorney General took exception to that practice and told the lines they could only add the actual port fees/taxes with the little "asterisk" that is beside the advertised price. This is somewhere between 10-15% of the total base fare.

 

Hence, to really make money, they need a lot of volume which has caused many "bricks and mortar" agencies to go out of business or tie in with a large travel firm like Expedia or Travelocity.

 

Tucker in Texas

[Valiamo]

I was reading the board on booking direct or through a travel agent. It sounds like the prices are the same. Even some TA's offer extras. My question is how do they make money?? Do they ge the cabins cheaper??

 

Depends on how you look at it. (my DW was a commission cruise TA)

 

Most TA (agencies) get around 10% for a cruise commission(yes some pay more). Hotels and Airlines are much lower (around 5% or less).

 

On the other hand when you book direct the Cruise companies use the commission they save pay their own travel centre employee's.

 

The TA (person) depending the Agency gets a cut of that commission after the agency takes their share. A lot of cruise TA's are contractors for the Agency, and if they don't sell a cruise, they don't get paid. On an average $5000 cruise, the TA (person) you talk to may only get $100-250 in commission, AND then the commission is only paid AFTER the client has sailed and returned.

 

Don't forget that they have may also have paid to get you an OBC, sent you wine for your stateroom, given you parting gifts (luggage tags, clocks, scales, etc etc). (that is all paid by the TA)

 

Most of them are on call 7 days a week,and all hours hours of the day answering questions from their clients. They call the same numbers that you do, and spend the same amount of time on the phone waiting to get answer, tho they learn to never call a peak times.

 

They do make good commission on the Insurance, almost nothing on Flights, and hotels (hence some angencies charge a service fee).

 

In reality the TA is just an extension of you, they do exactly what you do surf the net and scope out the cruises, and get you the best deals. They do have access to computer systems that can see every cruise out there, and the prices, plus they can do group bookings and save everyone some money.

Edited March 28, 2014 by Valiamo
fixed my english

[bizeemom4]

I was reading the board on booking direct or through a travel agent. It sounds like the prices are the same. Even some TA's offer extras. My question is how do they make money?? Do they ge the cabins cheaper??

Thanks

Don

 

Yes, we make money. Very little but yes, we do. Nothing on airfare which is why some agencies are refusing to book it (along with the nightmare that the FAA has made it with all the penalties and fees if we say one wrong thing).

 

We do get access to discounted cabins - if we are sailing in them. The cruise lines do like to take care of us.

 

If an agent/agency is giving you an OBC, they are pulling it out of their own pocket. Some will not give anything because they don't want price shoppers looking for the next best price. They want clients.

[IMNiles]

As others have said, it's all commission based. Rates vary by line and how much volume the agency does. Many (most?) agents now are independent and affiliated with "host agencies" that also take a cut.

 

Before you start doing the math and adding up the commissions, know that in addition to the taxes and fees (which are naturally not commissionable) there is also an invisible "non commissionable" part of the fare that is carved out before commission is paid. This number is not public and will vary. bizeemom4 is right in that air almost never pays a commission any more, and the liability for error is so high that many agents just don't want to deal with it (it really is a pain).

 

As another poster mentioned, TAs often compete by putting together groups of cabins that they book in advance at preferential rates (often with extras like an OBC), and sell individually. Just about any other "perk" is bought right out of the commission. Some agents compete on this basis, others don't. They're just different segments of the market. The lines typically do not allow discounting of any kind, and also have restrictions on the kinds of things that can be "rebated" out of an agent's commission.

 

The "TA or direct" question comes up often, and the answer really always boils down to "it depends." If you're a motivated do-it-yourselfer then you might value the direct access to the line or the perks offered by an online "call center" TA. If you are inexperienced, pressed for time, or simply not interested in sweating the details, then a good TA is worth their weight in gold.

 

Nobody gets rich being a TA, but there are the considerable rewards of helping people realize their dream vacation, and yes, the occasional discounted trip.

[TravelerThom]

...there is also an invisible "non commissionable" part of the fare that is carved out before commission is paid. This number is not public and will vary...

My TA lists NCCF (non-commissionable cruise fare) as a line item on my invoice. I think commissions start at around 10%, but large agencies that do a lot of business with a particular cruise company get over-rides, and I think their commissions (on the commissionable amount) can approach 20%. That commission is split up a number of ways going to agency overhead, agency owner, individual selling agent, and benefits to the passenger (bottle of wine or OBC etc).

 

Thom