Booking Under Your Own Credentials
By: Sandy Saburn, CTIE

Today I want to address a very specific group of travel agents: those who are either currently booking under their own credentials and those considering doing so. I want to share some information with you that I believe will help you put more money in your pocket.

Let’s first start with the question what does it mean to “book under your own credentials”? For many travel agents, this means they have an IATA or CLIA number that is recognized by the vendors they work with, and those vendors pay commission directly to the agent, rather than through another agency or host. Getting a CLIA number is incredibly easy, and an IATA number is easier than it should be (in my humble opinion).

The reason that most travel agents choose to go this route is one of two reasons – or sometimes both:

  1. They don’t want to split their commission with anyone and if they use their own credentials, they keep 100% of the commission they generate.
  2. Booking under your own credentials is seen by many in the industry as a sign that you have “made it”. It is the ultimate win for many people to be completely on their own.

I want to take a deeper look at each of these reasons today. In my 20+ years in the travel industry, in most cases, the travel agent working under their own credentials would be better off aligning with another agency.

Let me pause here and say I acknowledge I am slaying some sacred cows here. You may vehemently disagree with me on this topic, but I just ask that you consider what I’m saying to ensure you are making what is truly the best option for you.

Let’s dive into the commission issue first. I’m going to go all “mathy” on you and share some hard numbers.

The first thing to look at is your vendor and product mix. Start with your top five vendors and calculate how much of your total sales is with those vendors. If more than 75% of your bookings are with a handful of vendors, then you might be OK going completely on your own. That’s not the case for most people who typically have 10, 20, or even 30 companies that they work with.

Here’s the bottom line: Commission is determined by total sales with a vendor. If you are working completely on your own, your commission will be lower – sometimes dramatically lower – than if you are with a bigger organization.

Here’s an example: If you book Royal Caribbean cruises under your own credentials you will earn 10%, perhaps 12% on a booking. If you are with a larger agency, you will earn more because the commission rate is based on the entire agency’s sales. Let’s look at an example using Royal Caribbean’s Anthem of the Seas Western Med itinerary for next June.

Two people in a junior suite: $14,735 booking (commissionable amount of $13,586)

Commission at 16%: $2,173.76

Commission at 10%: $1,358.60

Difference: $815.16

Even if you are on a 90/10 commission plan where you give up 10% of your commission, you would still make more with a larger agency earning 16% because you would earn $1,956.38. At 80% you would receive $1,739.00. That is significantly more!

You would have to sell many cruises on your own to get to 16%, and that’s just one vendor.

This doesn’t even touch on the other benefits you get from being part of a larger agency including consortia access, FAMS, education, and so much more.

The next thing to tackle is this idea that agents who have their own IATA or CLIA number and work completely on their own have “made it” somehow. I am not sure where this comes from, but the reality is that being on your own without any support is a lot more work.

 

Are there times that working under your own credentials makes sense? Absolutely! If you are booking a very small number of suppliers, it might make sense. It also might make sense if you are working with vendors who don’t have commission scales and you earn the same amount no matter how much you sell. Lastly, it makes sense if you are a “queen bee” model where you have multiple sub-agents working under you.

For most travel agents, it is far more beneficial to be affiliated with a host agency that pays you a competitive commission split based on your sales. There are multiple agencies that will pay you 100%. And there’s no catch about that – you just pay a higher fee. There are a lot of host agencies that allow you to work under your own brand and some that allow you to use their branding and their marketing.

Ultimately you have to do what makes sense for your business – both where it is now and where you want to go in the future.

Gifted Travel Network, Inc. | 425 E. Statesville, Suite 101, Mooresville, NC 28115 | (877) 982‐2842

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