Digging into financials is not something most travel agents want to do. You didn’t get into travel to spend your days staring at spreadsheets, right? But if you are an IC that means you are a small business owner and you NEED to know these numbers. You don’t have to have an MBA or be a CPA to do this successfully, and it doesn’t need to take a lot of time.

Today I want to suggest a few key areas for you to be aware of and take a deep dive into from time to time. These 3 items contribute significantly to how much money you make from your business, so you need to understand what they are and what your numbers look like.

  • Yield
  • Vendor Mix
  • Commission retained


Yield: I bet every agent reading this knows exactly how much commission your top vendors pay. But do you know what the yield is for those same vendors? Yield is the actual rate of commission you receive. Remember, not every component of a booking is commissionable. For cruises there are the infamous “non-commissionable fares” that reduce the amount of the booking that the cruise line pays commission on – sometimes significantly. For bookings made with wholesalers you have air and taxes that aren’t usually commissionable. While your commission rate with the vendor might be 16%, the actual yield might be closer to 12%. To find out the yield on a booking, divide total commission by the total amount of the booking. You don’t have to do this for every booking, but it is important to know what your real numbers are.

Vendor Mix: Take a look at what you are selling. You should have a good idea of what your sales are for each vendor you work with. You might be surprised at some of the numbers. And when you look at this, also look at what your yield is with each vendor. Even when booking the exact same package, some vendors have higher yields than others. You work too hard to settle for a vendor that costs you money – so shop around! Ask your host agency for insight. They see all the numbers and can help you.

Beyond the numbers, are you selling what you want to be selling? Are have you gotten stuck focusing on products that you don’t want to be booking? Was your intention to move in a new direction? How’s that going? Looking at the numbers will help you see how you’re doing.

Commission Retained: Two numbers that many agents rarely look at are the total amount of commission they generated, and then the total amount they were paid. Unless you are working under your own credentials, those numbers aren’t the same. To get the many benefits of being with a host agency, you have to pay something either in fees or commission split. It is important to keep an eye on that cost to determine when you need to move to a new commission plan. And as your business grows beyond $750,000 in sales you need to be on a 100% commission plan. That does NOT mean you are better off working under your own credentials. Unless your business is focused exclusively on a handful of vendors, you will make far less in commission by being on your own.

I get it, for many of you numbers aren’t any fun. They aren’t for me either! If you are an independent agent, you are a travel entrepreneur, not just a travel agent. And entrepreneurs must pay attention to the numbers to make sure you are working smart, not just hard. In the long run, it will be very beneficial for you and your business.

In “normal” times you would probably say, “I don’t have time for all this.” Right now, that situation is different for many of you. This is a great way to use the extra time you have on your hands. It puts you in a better situation for when the rebound arrives and you can go back to booking travel.