How advisors make money

Being a travel advisor can be rewarding, both personally and financially. But for most, getting to that financial reward takes time.

Newer advisors make less money than their tenured peers: The highest earners have been in business for at least 11 years, a bracket in which nearly one-quarter reported annual income of $100,000 or more. Only 14% of advisors in business six to 10 years make that much, while it falls to a single-digit percentage for advisors in business five years or less. The vast majority, 80%, of advisors in business for two years or less reported an annual income of less than $25,000. This is less than what the Bureau of Labor Statistics reported was the 2022 annual mean wage for travel advisors: $48,250.

—Jamie Biesiada

That advisors in business for less than two years have some of the lowest salaries is in keeping with the typical sales cycle: In many cases, clients book travel anywhere from months to years ahead of a trip. Most of the time, advisors don’t see the bulk of their compensation until the client travels. Given that commission and overrides make up the bulk of revenue for all advisors, they are often working without pay, in some cases for long periods of time. This became more apparent during the pandemic, which is why ASTA and many consortia have rallied suppliers to pay commission earlier.

—J.B. 

On the whole, most travel advisors have a sunny outlook for the future of the agency landscape. Almost 80% view the field positively, an indication that even those low-earning newbies are confident in their future success.

—J.B. 

An agency’s gross bookings are also an indicator of end compensation, especially for home-based agencies, which are often single-advisor shops.

About one-third of agencies, or 32%, had less than $100,000 in gross bookings in 2022. Another third reported 2022 gross bookings between $100,001 and $500,000, while the remaining had in excess of $500,000, and 22% had total bookings over $1 million.

Home-based agencies tend to transact less than their traditional counterparts; 35% reported gross bookings between $100,001 and $500,000, the most common response from that group. 

Among traditional agencies, 20% had annual gross bookings in excess of $10 million in 2022. That was the most common response, followed by $500,001-$1 million (16%) and $100,001-$500,000 (also 16%).

—J.B.

Advisors have, especially in recent years, turned to additional revenue sources such as fees. Overall, 44% charge service fees: More traditional agencies than home-based independent contractors charge fees.

Many new advisors start out as home-based independent contractors, either full or part time, and they commonly argue that their lack of experience makes it harder for them to charge fees. That may help explain this discrepancy.

But there is evidence that more advisors overall are turning to fees: Nearly two-thirds of advisors said they either already have, plan to or have considered charging service fees in the past 12 months.

—J.B.

Agents are targeting clients who are both older and more affluent than the average traveler, according to Phocuswright’s U.S. consumer travel report. Nearly three-quarters of agents report clients over the age of 40; more than half of those clients have an annual income of $100,000 or more, a threshold only 34% of all U.S. travelers rise above, according to the consumer survey. No surprise, then, that 66% of agencies count luxury travel among their specializations.

—J.B.

Family travel returned in a big way as the pandemic ebbed: the Family Travel Association said in late 2023 that 81% of parents were very likely to travel with their children in the next 12 months, especially on multigenerational trips. It is no wonder that 90% of advisors cited family travel as the top category they focus on, finding that making up for lost time and celebrations is driving their clients to prioritize family trips.

—Nicole Edenedo

One correlation to income potential is whether an advisor works full time. Higher-earning advisors tend to be those who work full time and travel sales are their a primary source of income. At the high end, of those making $100,000 or more, 73% work full time with travel advising as a primary source of revenue, and 13% are full-time workers for whom travel advising is a secondary source of income. Meanwhile, 64% of those making less than $25,000 identified themselves as part-time travel advisors.

—J.B.