what is override commission in travel industry

Overriding Commission

Overriding commission, often referred to simply as override commission, is a type of compensation arrangement commonly used in sales organizations, particularly in multi-level marketing (MLM) or direct selling companies.

Who benefits from overriding commission?

Several parties benefit from overriding commission within a sales organization:

Individuals earning override commissions: They benefit directly from the additional income earned based on the sales performance of their team or downline.
Sales managers or team leaders: They benefit from building and leading successful teams, as they earn override commissions on the sales generated by their downline members. ‍
Company or organization: Companies benefit from override commissions by incentivizing recruitment and the development of a strong sales force. It encourages team building, boosts morale, and can lead to increased sales and revenue for the organization.

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What is the overriding commission?

Overriding commission, also known as override commission, is a form of compensation earned by individuals based on the sales performance of the team or downline they manage or recruit within a sales organization. Essentially, it allows individuals to earn commissions not only on their own sales but also on the sales generated by the members of their team.

What is the override commission in travel industry?

In the travel industry, override commission refers to the additional commission earned by travel agencies or agents based on the sales performance of their sub-agents or the travel consultants they manage. Here's how it typically works:

Travel agencies or host agencies often have networks of independent travel consultants or sub-agents who sell travel products and services.
When these sub-agents make bookings or generate sales, a portion of the commission earned from those bookings may be paid to the supervising agency or agent as an override commission.
The override commission is usually a percentage of the commission earned by the sub-agent or consultant and is determined by the agreement between the parties involved.

What are the pros and cons of overriding commission?

Pros and cons of overriding commission:

Incentivizes team building: Override commissions motivate individuals to recruit, train, and support a team of sales representatives, fostering teamwork and collaboration.
Potential for passive income: Individuals can earn override commissions as a form of passive income, as they continue to receive compensation based on the ongoing sales efforts of their downline members.
Encourages leadership development: Override commission encourages individuals to develop leadership skills by managing and mentoring a team of salespeople, which can lead to personal and professional growth.
Pressure to recruit aggressively: In some cases, the focus on earning override commissions may lead individuals to prioritize recruitment over ethical sales practices, potentially harming the reputation of the organization.
Conflict among team members: Competition for sales and recruits within the team may create conflicts or tension among team members, undermining morale and cohesion. ‍
Requires ongoing management: Managing a team of sales representatives requires ongoing time and effort to provide support, training, and motivation, which can be demanding for individuals earning override commissions.

How to calculate overriding commission?

Calculating overriding commission typically involves determining a percentage of the sales generated by the downline members and applying it to the total sales volume. The specific calculation method may vary depending on the company's compensation plan, but here's a general approach:

Identify the commission percentage: The company will establish a commission percentage that determines how much of the sales revenue generated by the downline will be paid out as overriding commission. This percentage is usually predetermined and outlined in the compensation plan.
Determine the sales volume: Calculate the total sales volume generated by the downline members for the designated period. This could include sales made by recruits, as well as sales made by subsequent levels within the organization if it's a multilevel commission structure.
Apply the commission percentage: Multiply the total sales volume by the commission percentage to calculate the overriding commission. The formula is typically: Overriding Commission = Total Sales Volume * Commission Percentage
Consider any qualification criteria: Some companies may have specific qualification criteria that individuals must meet to earn overriding commissions. This could include minimum sales targets, team performance goals, or other requirements outlined in the compensation plan.
Verify payment procedures: Ensure that the calculated overriding commission aligns with the company's payment schedule and procedures. Payments may be made on a regular basis (e.g., monthly or quarterly) or according to specific milestones or achievements.

How does overriding commission work?

Overriding commission works by allowing individuals within a sales organization to earn commissions not only on their own sales but also on the sales generated by the team or downline they recruit, manage, or oversee. Here's how it typically works:

A salesperson recruits or manages a team of sales representatives, often referred to as their downline.
When members of the downline make sales, a portion of the commission earned from those sales is paid to the person who recruited or manages them as an override commission.
The override commission is usually calculated as a percentage of the sales volume generated by the downline members, as outlined in the company's compensation plan.
The individual earning the override commission benefits from the additional income generated by the sales efforts of their team members.

what is override commission in travel industry

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.

eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

Promoters Employees who have responded positively or agreed.
Detractors Employees who have reacted negatively or disagreed.
Passives Employees who have stayed neutral with their responses.

Can my commission be override without my knowledge?

Commission overrides should not occur without your knowledge. Override commissions are typically outlined in your contract or compensation plan, and any changes to these arrangements should be communicated to you by your employer or the organization you're working with.

If you suspect that your commissions are being overridden without your knowledge, it's essential to review your contract, discuss the matter with your employer or the appropriate authority, and seek clarification on the situation.

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Travel Industry Blog

Travel technology for dummies: what are incentives, commission & overrides.

05. September 2017
gds , travel technology for dummies

I spoke a lot about Incentives, commission & overrides in my blog post about the US Airways vs. Sabre trial , where many numbers came to light and provided insight into the money flow here . But this time, I want to focus on what those numbers actually mean.

One model established in the airline industry is the incentive model. GDSs’ so-called segment fees for distribution are paid by the airline from the fee the traveler pays to it. GDSs generally pass on a part of this segment fee to the agencies which got the sale going. In some cases, the agency also demands a service fee directly from the customer and sometimes also receives additional commissions directly from the airline. Part of the amount for the ticket also goes to the credit card company if payment is not made by direct debit. Some airlines therefore also apply a credit card fee. The actual distribution of the fees and commissions to the parties involved (the settlement process) is generally handled via a clearing house (such as ARC or IATA).

How to Maximize Profit

The regular commission which GDSs pay an agency or TMC (the numbers where partly revealed in a lawsuit covered here ) is straightforward per booking or per segment. However, it gets tricky when incentive overrides come into play. Commission overrides are an additional commission percentage paid when a certain volume level is achieved. I was amazed when one of our clients showed me the technology they put into place (using our multi-GDS engine underneath) to divert on a daily basis in which channels bookings were made in order to maximize their profit: The per-booking commission on one GDS was better than the other one, but they needed to achieve a certain number of bookings on the other GDS in order not to lose an incentive they had negotiated with the other GDS. It was amazing to see how they narrowed it down more or less to the last day of the year to make that one important booking which put them over the threshold so that all bookings made to date could receive an extra bonus.

One of Sabre’s annual reports for instance says: “Travel agency incentive consideration is a large portion of [GDS] expenses. The vast majority of incentive consideration is tied to absolute booking volumes based on transactions such as flight segments booked. Incentive consideration, which often increases once a certain volume or percentage of bookings is met, is provided in two ways, according to the terms of the agreement: (1) on a periodic basis over the term of the contract and (2) in some instances up front at the inception or modification of contracts; in this case the incentive consideration is capitalized and amortized over the expected life of the contract. Although this consideration has been increasing in real terms, growing in the low-single digits on a per booking basis in recent years, it has been relatively stable as a percentage of [GDS] revenue over the last five years, partially due to our focus on managing incentive consideration.”

Travel XML API

Are you the perfect revenue manager.

Here is a little quiz for you to find out whether you are the perfect revenue manager (the quiz is purely fictive and has no relation to any real company incentives or overrides):

An agency makes 240 bookings a year. 40 bookings of this agency are made with airline A – all others are made with any airline bookable in a GDS. The agency has two GDS contracts (A & B) and gets the following commission and overrides:

$1 for each booking in GDS A
$1.10 for each booking in GDS A if the agency makes equal to or more than 100 bookings in GDS A
$1.20 for each booking in GDS B but only for airline A throughout the year or any airline from December through April
$0.80 for each booking in GDS B elsewise

Incentives are calculated per calendar year. Bookings are distributed evenly throughout the year. As a revenue manager of the agency, how can you maximize the agency’s profit and what will this profit be? Please provide your answer in the comments section.

Blog Series: Travel Technology for Dummies

What Is Full Content?
What Is a Booking Reference or PNR?
What Is Overbooking?
What Is a Passenger Service System (PSS)?
What Are Booking, Waitlists, Tickets, Codeshare & Interlining?
What Are Active and Passive Segments?
What Are Incentives, Commissions & Overrides?
What Is a ‘Married Segment’?
Blockchain in Travel: All You Need to Know – for Now
What Is the Difference Between Fares, Rates and Tariffs?
What Is NDC?
What Is Continuous Pricing?
What Is Direct vs. Indirect Distribution?

Picture credit: Shutterstock

This Post Has 12 Comments

Good – pls. keep this informational – no advertising pls.! If you have anything to share that’s informative about the solution or in comparison to other solutions pls. do so …

We’ve just started using Avian.aero as our incentive management solution, they literally allow you to scan the contracts using their technology and by connecting to GDSs/BSP/ARC get the data on the screen. It’s pretty amazing…

Dear Mark, Thanks for your question. I would assume, the details of such agreements and “what happens if..” is part of the agreement between the parties. I’m not sure I understand what you mean by a loss. I would say the commission/override is based on booked/traveled PNRs and that number cannot be negative. Thanks, Michael

If you are on override commission, and the company gets a loss or a negative in a certain month, do you get deduction on your wage for the negative sales for the period?

To my understanding… override is an incentive to be given for a profitable period… not for the company to take from the sales agent if the sales for the period is at a negative or a loss.

You are more than welcome. This may also be interesting as the money flow may change https://www.travel-industry-blog.com/travel-technology/fares-rates-and-tariffs/ due to https://www.travel-industry-blog.com/travel-industry/ndc/ .

Thanks for the reply. I was missing the override bonus. the best revenue that I could made was: 100 booking on GDS A @$1.00 + 100 booking (dec-apr: 20×5) on GDSB @1.20+40 booking on GDS B @ 1.20 $100+ $120+$48 =$268 I will read on override commission. Thanks once again!

Ok, spoiler alert – here is the solution:

240 bookings total per year means 20 bookings per month on average.

Dec-Apr: all 20 bookings are made in GDS-B – meaning 5 months x 20 bookings x $1.20 = $120

May-Nov: all 40 bookings for Airline A need to be made during this time frame and on GDS B to maximize profit, so that you can get 40 bookings x $1.20 = $48. The remaining 100 bookings are made on GDS A, which also secures the $0.10 per booking in override bonus – hence 100 bookings x $1.10 = $110.

In summary: $120 + $48 + $110 = $278.

This means, within your booking tool, you need to steer all your travelers to book airline A on GDS B during the months of May-Nov. – something you can only do with an individualized tool such as https://www.pass-consulting.com/en/software-consulting/online-booking-tool/ .

How $278 are you considering 190 bookings to be made in GDS B @1.20 (assuming 40 booking for airline A and 150 booking made from dec to april in gds B) and remaining 50 bookings in GDS A for the rest of the months?

Not bad, but you can even get up to $278!

258 will be the incentive

Dear OLEKSANDR, It sounds about right. So, with the example (‘240 bookings a year. 40 bookings of this agency are made with airline A – all others are made with any airline bookable in a GDS’), what would be the actual $ amount of incentive of this agency that year? Good job! Thanks

The solution for the task. $1 for each booking in GDS A $1.10 for each booking in GDS A if the agency makes more than 100 bookings in GDS A $1.20 for each booking in GDS B but only for airline A throughout the year or any airline from December through April $0.80 for each booking in GDS B elsewise.

From Jan to Apr: – book all airlines in GDS B

From May to Nov: – book all airlines in GDS A except airline A – book Airline A in GDS B

Dec: While ( GDS A total bookings <=100) { Book all airlines ex. Airline A in GDS A book Airline A in GDS B } Book all airlines in GDS B Book Airline A in GDS B

Alternative for Dec in case we are behind the total bookings for GDS A: While ( GDS A total bookings that’s what changed to GDS A } Book all airlines in GDS B Book Airline A in GDS B

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Travel Agent Commissions, Explained. [Infographic]

There’s no two ways about it, travel agent commissions are complicated—the numbers are not black and white numbers and there is no set way of doing things. Simply put, there is no "average" travel agent commission. Heck, if that were the case we'd be wrapping up this article by now!

We’re going to try to simplify things but since the system is complex, explaining it can be tough.

As you read this, just remember that commission levels vary by a travel agency's sales, an agency's consortium , franchise or host agency affiliation, vendor, destination, how the booking is made, and more (and that's just to name a few).

This article is a rough guide to travel agent commissions. It will give you a thorough, yet general, idea of travel agent commissions and what to expect.

If you're a sucker for details, don't worry. Once you join a host, franchise, or consortium, their commission guides will have all sorts of juicy details on specific commission levels!

Now, let's start breaking this stuff down, shall we?

⭐️ har's Travel agent commissions article highlights ⭐️

Travel Agent Commissions, Big Picture : Curious about the average commission rate for different travel products? You can check out our infographic in this section!
How Do Travel Agent Commissions Work? Commissions are typically tiered according to annual sales and/or passenger sales.
Host Agencies and Travel Agent Commissions : A host agency can help travel agents receive higher commission levels due to economies of scale.
Types of Travel Agent Commissions: There are 2 primary kinds of commissions for travel agents, flat commissions and tiered commissions.
Airline Commissions: Airline commissions are a different beast altogether because their commission range depends on a variety of different factors! (Read this section to find out why.)
Negotiated Contracts: Going with a host or consortia can help you leverage their commission contracts with suppliers.
Commission Confidentiality: You might not know the exact commission rate you'll receive until you sign on with a host. This section is where we tell you why.

Travel Agent Commissions: The Big Picture

Let's start with a visual to give you the 40,000-foot view of travel agent commissions. You can see some hard numbers and how things are broken down in an easy-to-digest infographic.

After you've checked that out, we'll deep dive into how travel agent commissions work to make sure you know all the ins and outs!

How Do Travel Agent Commissions Work?

First things first: where do travel agent commissions come from? How do they get from supplier to host to travel agent? How does a supplier know who gets what?

At its simplest, a supplier/vendor recognizes a travel agent from any Joe Blow on the street because travel agencies have an accreditation number .

These magic accreditation numbers are how travel agents get commissions! When you call/login to make a booking, the supplier asks for your travel agency's accreditation number. This is how they know who to send the commissions to.

It's like when you call any doctor's office and they always ask for your name and date of birth to identify you. Travel suppliers ask for an agency's accreditation number to pull the agency up in their system.

Host Agencies and Travel Agent Commissions

In the case of a host agency, all of the travel agencies in the host's network use the same accreditation number (the host's). The supplier/vendor will recognize all of the host's independent contractors (ICs) as "one" large agency since all of their ICs are using the host's accreditation number.

Consortia and some franchises are a little different from hosted agencies in that each individual agency needs its own accreditation number.

If that's a little confusing, let's try to give a similar example in the real world . . .

I like to think of the host agency model being like the relationship between a general contractor and a homeowner. A homeowner paying a general contractor is like a supplier paying a host agency.

Instead of paying the electrician, plumber, and architect separately, homeowners pay the general contractor who in turn pays the individual companies (that's the hosted agents!).

So the supplier pays the host agency (general contractor) commission because they are what's called "the agency of record". In turn, the host agency pays the individual independent contractor (IC) travel agencies their share of the commission.

Using a host's accreditation is one of the major benefits of using a host agency . . . not only does it spare you the hassle of getting your own accreditation, but a host agency is able to negotiate better commission levels than an individual agent because of their higher sales.

The general rule in travel is, that the more your agency sells of a vendor, the higher the commissions (to a point).

This is a great segue into our next section! (PS: Did you know it's segue and not segway? I just found out and want to make sure you appreciate my newfound knowledge by pointing it out.)

Two Kinds of Travel Agent Commissions

1. flat commission rates.

A flat-rate travel agent commission is the simplest type of commission. The flat rate is just what it sounds like: every travel agent gets the same no matter how much they book, what consortium they belong to, or how cute their dog is. Flat-rate commissions are actually standard and predictable! Hooray!

Here are a few types of vendors with a flat rate commission:

→ Hotel-only bookings and car rental companies: These types of bookings typically pay travel agents 10% commission and that’s that. There are small variances but car and hotel-only bookings are probably the most predictable commission level in this whole mess.

travel agent commission levels for car rentals

→ Boutique tour operators: Smaller or boutique vendors will typically pay a 10% commission or give agents net rates. They won’t have sales tiers (more on that soon). If you’re sending a boutique hotel or small tour operator tons of business, there may be room to negotiate a higher commission.

→ Disney: Okay, so they're not exactly a boutique vendor! But Disneyland and Disney World have a flat rate commission of 10% for all agents. No matter how special you, your consortia, or host agency are, you're not going to be able to negotiate a better commission.

When it comes to Disney Cruise Line and Adventures by Disney products, their commissions are tiered (we'll talk about tiered commissions in-depth in just a sec) but the sale thresholds for those are the same for every. single. agency. out there.

Disney commission levels for travel agents

2. Tiered COMMISSION RATES

It only seems fair that if you sell more of something, then you get a higher commission, right? Well, a lot of vendors think so too! Tiered commissions essentially mean that the more you sell, the higher the commission you get. Sounds simple?

I hate to burst your bubble, but tiered commissions are so complex so I'm going to put them in the spotlight after our intermission...

Rigel Break!

Ugh. My mind is wandering too. Let's take a break and look at a cute picture of my dog, Rigel. This is his "business dog" look.

Rigel takes a break from travel agent commissions

Sigh. Handsome lil' devil, isn't he? Sorry, that's all the cuteness for now; back to work!

Tiered Commission Rates. How Are They Determined?

So why would Travel Agent #1 receive a 12% commission for selling vendor X, while Travel Agent #2 receives a 16% commission for selling the same product?

There are two major factors that will determine travel agent commission tiers:

1. Aggregate/ Annual Sales Volume

For some vendors, the commission level (or tier) they pay an agency is determined by the sales volume under that agency's accreditation number. A vendor may increase commission based on annual sales of an agency (or their host agency).

Here's an example (numbers are hypothetical)

Annual Sales Commission Level:

10% . . . $0-$49,999
13% . . . $50,000-$249,999
14% . . . $250,000-$499,999
15% . . . $500,000+

From the numbers above, you can see that as a solo travel agent, it's a heckuva lot easier to reach 15% when you belong to a host agency!

So even though you may have a commission split with your host agency, in the end, many agents stand to rake in more dough with a host because they are earning more commission.

When you look at the big picture, it's also worth noting that nearly all host agencies also belong to a travel consortium (such as Travel Leaders Network, Signature, Virtuoso, or Ensemble). With a host agency's aggregate sales among ICs and their consortia relationships, host agencies are able to bring in higher commission tiers with vendors than most individual travel agencies.

2. Passenger Count

While many vendors use sales numbers to determine an agency's commission level, there are a handful of vendors that use a different marker. Instead of looking at the total sales coming from an agency, a vendor will look at how many passengers you're sending their way.

You’d see something like this (these are hypothetical numbers):

Annual PASSENGER Count Commission Level:

10%: 0-20 passengers
11%: 21-49 passengers
13%: 50-199 passengers
15%: 200+ passengers

A Note on Airline Commissions

I always say airlines are another animal and honestly, they're not my forte. So I’ll say this. Don't expect to become a millionaire by selling domestic tickets from JFK to LAX.

In August 2017, American Airlines announced they would pay travel agents a $2/segment for airline ticket commission — which is the first time airlines have offered all agents commission on all air tickets since the 1990s.

Kinda huge. But really, is it just me, or is the $2/segment airline commission incentive not really doing it for anyone else? Well, don't worry, because going through a host agency and/or travel consortium can give you access to private air contracts that are quite a bit more attractive.

Airlines offer travel agent commissions through two routes:

1. AIRline Consolidators:

These are airline wholesalers. They specialize in air and have private contracts with the airlines. Travel agents can make money with these airline consolidators in one of two ways: commission and marking up net rates.

2. Airline Contracts:

Your host agency or consortium/franchise/co-op will most likely have private air contracts that allow for travel agent commissions on certain airlines. Not every domestic or international ticket is going to be commissionable, it depends on things like city pairs, class of service, the carrier, time of year, etc.

The commission percentage agencies earn on air depends on numerous factors, the most important one being which private contracts you have access to.

Here's a general rule of thumb on the airline ticket commission range you can expect as a travel advisor:

Domestic: 0-5%
International: 10-22%

For most leisure agents, airline ticketing alone is not a large source of commission. That's why the most common fee travel agencies charge is a service fee for airline tickets. It helps stabilize an agent's income and ensures they're being compensated for their work.( Looking for more data on travel agent fees? HAR's 75+ page travel agent research reports are just what you need. )

Travel agents can book air-only reservations in a variety of ways, most notably through consolidators (often used by leisure agents) and for corporate agents, through a Global Distribution System (GDS) .

Now, let's chat about how companies like host agencies, consortia, and franchises help secure better commission deals for their agency members...

Negotiated Contracts: Host Agencies, Consortia, and Travel Agent Commission Agreements

Alright, you've probably figured out that the travel industry is all about economies of scale. The more you bring to the table, the more leverage you have.

So it's no surprise that host agencies (a group of independent agencies using the same accreditation number) and consortia (independent agencies with their own accreditations that band together for more buying power and access to marketing/tech tools) are able to negotiate better commission tiers.

For you, as an agency, these negotiated commission tiers are a big benefit of aligning with a host agency or consortium. When you (or your host agency) are affiliated with a travel consortium, the consortium will negotiate lower sales tiers/passenger thresholds with their preferred suppliers .

Let me break it down in real terms.

Most vendors will have commissions broken down into tiers. Maybe they say an agency has to sell $75,000 of their product to get a 12% commission. But, if a host/franchise/consortia has a negotiated commission agreement, their agents may only need to sell $50,000 to reach the same 12% commission tier. A deal!

Since many of the readers of this site align with host agencies at some point in their careers, we’ll mention again that for hosted agents, your tier is not dependent on your individual agency’s sales, but the cumulative sales of all of the agencies under the host’s umbrella .

The value in this becomes a little more clear if we compare two agencies: one is a hosted agency that belongs to a $100M host agency, the other is a smaller agency that has $2M in sales.

Both of our agencies belong to the same travel consortium. Both agencies have access to the same negotiated commission tiers because they're members of the same consortium. But, who is going to have a harder time meeting the $50,000 commission tier the consortium worked out?

You got it. The $2M agency because they have to rely on only their sales, whereas the agency who belongs to a host agency — regardless of how much of the vendor they actually sell — reaps the benefits of the sales of all of the other agencies in their host agency's network.

Host agencies and consortia will have the strongest travel agent commission agreements with their preferred suppliers. When a vendor is on a "preferred supplier list," it means that the host or consortium will have better contracts with them and likely sell a higher volume with that vendor.

Understanding Commission Confidentiality

As you can imagine, commission contracts between travel agencies and vendors, as well as those between consortia and vendors, are confidential. They’re like trade secrets that can give one travel agency/consortium an advantage over the other.

Top Secret - Understanding Travel Agent Commission Confidentiality

Knowing that, don’t be surprised if a consortium or host is tight-lipped when you ask for their commission guides. Sadly, they're not going to hand over a detailed pamphlet listing all their trade secrets. If you made it to this point, you can understand why :)

Or maybe they're tight-lipped because they're spies? I dunno. I say follow your gut on that one.

All that said, if you do sell a lot of a certain vendor(s), it’s perfectly acceptable to ask about commission info for your top vendors.

Even if a host/franchise/consortium doesn't spell out the commissions you'd get in detail, you can ask for:

a list of the preferred suppliers and
an idea of the sales volume with your favorite vendors

More Ways to Earn . . .

Believe it or not, there are multiple ways an agent can earn money beside travel agent commissions!

A few other common income streams agents included service fees, consultation or planning fees, markups from net rates, and selling insurance (which is technically still a commission, but worth a note!).

Here's a few more resources to check out:

Curious to Start Earning Commissions Like a Bona Fide Travel Advisor?

Looking for some resources on how to start your own travel agency?

We happen to have oodles of resources on our site. But I have to say, that at this stage in the game our 7 Day Setup Accelerator course takes the cake.

Because it cuts the noise for you and delivers the exact info you need to launch your agency, with the support of industry experts and the accountability to make things happen!

Editor's Note: This article was originally published in Oct. 2021. We occasionally update it with the latest data, indicated by the publish date listed on the article.

About the Author

Steph grew up in the travel industry, helping on and off with her mom's homebased travel agency. She has worked with thousands of agents in her role as a former host agency director before leaving in 2012 to start HAR. She's insatiably curious, loves her pups Fennec and Orion, and -- in case you haven't noticed -- is pretty quirky and free-spirited.

If you’re looking for Steph, she leaves a trace where ever she goes! You can find her on Facebook, Instagram, LinkedIn (her fav) and Pinterest as 'iamstephly'. 🙂 You can also catch her on her Substack, Bumblin' Around, where she writes on things outside the world of HAR.

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How Do Travel Agencies Make Money? Revenue Models, Fees, And Ancillary Services Explained

December 13, 2023

Discover the various ways travel agencies generate income, from commission-based revenue models to , markups on travel products, ancillary services, and more. Explore how group travel, affiliate partnerships, and travel packages contribute to their revenue streams.

Commission-Based Revenue Model

Percentage-based commissions.

In the world of travel, one common revenue model is the commission-based approach. This means that travel agencies and agents earn a percentage-based commission on the sales they generate. Percentage-based commissions are a popular choice because they allow travel professionals to earn a fair and proportional amount based on the value of the transaction.

When it comes to percentage-based commissions, the rate can vary depending on the type of travel product or service being sold. For example, airlines may offer a certain commission percentage for flight bookings, while hotels may have a different rate for room reservations. This flexibility allows travel agencies to adapt their pricing structure and commission rates to different industry standards and market demands.

One advantage of percentage-based commissions is that they incentivize travel agents to focus on selling higher-value travel products. Since the commission is a percentage of the total price, agents have the potential to earn more when selling more expensive options. This encourages them to upsell and cross-sell additional services, such as room upgrades, travel insurance, or car rentals, which can enhance the overall customer experience and generate additional revenue.

Flat Fee Commissions

Another commission-based revenue model that travel agencies may adopt is the flat fee commission structure. In this approach, instead of earning a percentage of the total transaction value, travel agents receive a fixed amount for each booking or service they provide. This can be a flat fee per booking or a flat fee per service rendered.

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Flat fee commissions can be advantageous for both travel agencies and customers. For agencies, it provides a predictable and stable income stream, regardless of the total value of the transaction. It also simplifies the pricing structure, making it easier for agents to calculate their earnings and manage their financials.

From a customer’s perspective, flat fee can offer transparency and clarity. For example, if a travel agency charges a flat fee of $50 for booking a flight, the customer knows exactly how much they will be paying for the service. This can help build trust and provide a sense of value for the customer.

Override Commissions

Override commissions are a form of commission-based revenue model that allows travel agencies to earn additional income based on their performance or the performance of their team. In this model, travel agents receive a higher commission rate or bonus when they meet certain sales targets or achieve specific milestones.

Override commissions can be structured in various ways. Some travel agencies may offer tiered commission rates based on sales volume, where the commission percentage increases as the agent reaches higher sales targets. Others may provide one-time bonuses for surpassing certain performance benchmarks, such as booking a certain number of vacations within a specified timeframe.

Override commissions can be a powerful motivator for travel agents, as they provide an extra incentive to go above and beyond in their sales efforts. It encourages them to strive for excellence and actively seek out opportunities to generate more revenue for the agency. Furthermore, override commissions can foster healthy competition within the team, driving individual and collective performance.

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To summarize, the commission-based revenue model in the travel industry offers various options for travel agencies and agents to earn income. Percentage-based commissions provide flexibility and incentivize selling higher-value products, while flat fee commissions offer simplicity and transparency. Override commissions add an extra layer of motivation and reward for achieving sales targets. By adopting the most suitable commission structure, travel agencies can optimize their revenue and provide value to their customers.

Service Fees

Consultation fees.

Looking to plan your dream vacation but feeling overwhelmed with all the options? Our expert travel consultants are here to help! We offer personalized consultation services to ensure that your travel plans are tailored to your specific needs and preferences. Whether you’re looking for a relaxing beach getaway or an adventurous trip to a remote destination, our consultants will guide you every step of the way.

Our consultation fees are designed to cover the time and expertise of our travel consultants. By charging a nominal fee for our consultation services, we can dedicate the necessary resources to provide you with the highest level of service. Rest assured that this fee is a small investment compared to the value you’ll receive in return – a perfectly planned vacation that exceeds your expectations.

During the consultation process, our travel consultants will take the time to understand your travel preferences, budget, and any special requirements you may have. They will research and recommend the best destinations, accommodations, and activities based on your individual preferences. Our goal is to ensure that every aspect of your trip is carefully curated to create unforgettable memories.

So, why choose our consultation services? By working with our experienced travel consultants, you’ll benefit from their extensive knowledge of popular destinations, insider tips, and access to exclusive deals and promotions. They can provide valuable insights and recommendations that you won’t find by simply searching online. Plus, our consultants are always available to answer any questions or address any concerns you may have before, during, and even after your trip.

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Booking Fees

Once you’ve finalized your travel plans, it’s time to book your flights, accommodations, and activities. At our travel agency, we charge a small booking fee to cover the administrative costs associated with making these arrangements on your behalf. This fee ensures that all the necessary reservations are made accurately and efficiently, saving you time and hassle.

By paying a booking fee, you can enjoy the convenience of having our team take care of all the details for you. Our travel agents have access to a wide range of travel suppliers and can compare prices, availability, and options to find the best deals for you. They will handle all the necessary bookings, confirmations, and itinerary updates, leaving you with peace of mind and more time to focus on the excitement of your upcoming trip.

It’s important to note that the booking fee is separate from the actual costs of your travel arrangements. While the fee covers the service of booking and managing your reservations, the total cost of your trip will depend on various factors such as the destination, travel dates, accommodations, and additional services or activities you choose.

Cancellation Fees

Life is unpredictable, and sometimes plans change. We understand that unforeseen circumstances may require you to cancel or modify your travel arrangements. However, it’s important to keep in mind that cancellations often come with associated costs and fees. These fees are necessary to compensate for the time and effort our team has already invested in planning and securing your reservations.

Our cancellation fees are designed to be fair and reasonable, taking into account the specific terms and conditions set by airlines, hotels, and other travel suppliers. These fees help us cover the costs incurred due to cancellations, such as non-refundable deposits, penalties imposed by suppliers, and administrative expenses.

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Before making any cancellations, we encourage you to review the terms and conditions of your bookings and consult with our travel consultants. They can provide guidance on the cancellation policies of each travel supplier and help you explore any available options to minimize the impact of cancellation fees.

Remember, our priority is to ensure your satisfaction and provide you with the best possible service. We strive to find solutions that align with your needs and circumstances, even in challenging situations. Our dedicated team is here to support you throughout your travel journey and make the process as smooth as possible.

In summary, our service fees , including consultation fees, booking fees, and cancellation fees, enable us to deliver exceptional travel experiences tailored to your preferences. By investing in our services, you gain access to the expertise of our travel consultants, the convenience of hassle-free bookings, and the peace of mind that comes with knowing you have a dedicated team behind you every step of the way. So, why wait? Contact us today to start planning your next unforgettable adventure!

() Consultation fees () Booking fees (*) Cancellation fees

Markup on Travel Products

When it comes to selling travel products, travel agencies often employ a markup strategy to generate revenue. This involves adding a certain percentage or flat fee on top of the base price of the products they sell. By doing so, they are able to cover their operational costs and earn a profit. Let’s take a closer look at the different types of markups that travel agencies commonly apply to various travel products.

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Airline Ticket Markups

One of the most common travel products that travel agencies mark up is airline tickets. When you book a flight through a travel agency, you may notice that the price they offer is slightly higher than what you would find on the airline’s website. This is because travel agencies add a markup to the base fare of the ticket. The markup can vary depending on the agency and the specific ticket, but it is typically a percentage of the base fare.

For example, let’s say the base fare for a round-trip flight from New York to Los Angeles is $300. A travel agency may add a 10% markup, making the total price $330. This markup covers the agency’s costs and allows them to earn a profit from selling the ticket. It’s important to note that the markup does not necessarily mean that you are paying more for the same ticket. Travel agencies often have access to discounted fares or exclusive deals, so even with the markup, you may still be getting a good deal compared to booking directly with the airline.

Hotel Room Markups

In addition to airline tickets, travel agencies also apply markups to hotel room bookings. When you book a hotel through a travel agency, you may notice that the price they offer is higher than what you would find on the hotel’s website. This is because travel agencies add a markup to the base price of the room.

The markup for hotel rooms can vary depending on factors such as the location, the type of room, and the level of demand. Travel agencies typically negotiate special rates with hotels, allowing them to offer discounted prices to their customers. However, they still need to add a markup to cover their costs and make a profit.

For example, let’s say the base price for a standard room at a hotel is $100 per night. A travel agency may add a 20% markup, making the total price $120 per night. This markup allows the agency to cover their expenses and earn a profit from the booking. Again, it’s important to remember that even with the markup, you may still be getting a better deal compared to booking directly with the hotel.

Tour Package Markups

Another area where travel agencies apply markups is in the sale of tour packages. Tour packages typically include a combination of transportation, accommodation, and activities, all bundled together at a fixed price. Travel agencies create these packages by negotiating special rates with various suppliers and then adding a markup to cover their costs and make a profit.

The markup for tour packages can vary depending on the destination, the duration of the tour, and the level of customization. Travel agencies often work with local tour operators to create unique and immersive experiences for their customers. They carefully curate the itineraries, ensuring that they offer value for money while still allowing for a reasonable profit margin.

For example, let’s say a 7-day tour package to a popular tourist destination has a base price of $1000. A travel agency may add a 15% markup, making the total price $1150. This markup covers the agency’s expenses in organizing the tour, such as transportation, accommodation, and guides, as well as their profit.

Ancillary Services

When planning a trip, there are several ancillary services that can greatly enhance your travel experience. These services go beyond the basic transportation and accommodation needs and cater to specific requirements that travelers may have. In this section, we will explore three important ancillary services: travel insurance sales, visa and passport services, and car rental commissions.

Travel Insurance Sales

Travel insurance is an essential aspect of any trip, providing peace of mind and financial protection in case of unforeseen events. Whether you’re embarking on a short domestic getaway or a long international adventure, having travel insurance can save you from potential financial losses due to trip cancellations, medical emergencies, or lost luggage.

Travel insurance policies vary in coverage and price, catering to different types of travelers. Some policies may focus on medical coverage, while others may offer additional benefits like trip cancellation or interruption coverage. It’s important to carefully review the policy details, including coverage limits, exclusions, and claim procedures, to ensure that you choose the right plan for your specific needs.

When purchasing travel insurance, consider factors such as your destination, duration of the trip, and any activities you plan to engage in. Adventure sports, for example, may require additional coverage due to the higher risk involved. Additionally, if you have pre-existing medical conditions, make sure to disclose them to the insurance provider, as this may affect your coverage.

Travel agencies often partner with insurance providers to offer comprehensive travel insurance packages. By bundling your travel insurance with other services, you can enjoy cost savings and convenience. These packages may include options for both individual and group travelers.

So, before you embark on your next journey, take the time to explore the different travel insurance options available to you. It’s a small investment that can provide invaluable protection and peace of mind throughout your trip.

Visa and Passport Services

Obtaining the necessary visas and passports is an essential part of international travel. Navigating the complex visa requirements and application processes can be daunting, especially for first-time travelers or those visiting countries with strict entry regulations. This is where visa and passport services come in handy.

Visa and passport services providers specialize in assisting travelers with the application process, ensuring that all necessary documents are prepared correctly and submitted on time. They stay up to date with the latest visa regulations and requirements, saving you the time and effort of researching and gathering the necessary information yourself.

These services can help simplify the process and minimize the chances of errors or delays that could potentially disrupt your travel plans. They offer guidance on the specific visa types required for your destination, help with completing application forms, and provide assistance in gathering supporting documents.

Furthermore, visa and passport services providers can also offer expedited processing options for urgent travel situations. This can be particularly useful if you need to obtain a visa within a short timeframe or if you encounter unexpected changes to your travel plans.

While utilizing visa and passport services may incur additional fees, the convenience and peace of mind they offer can outweigh the costs. By entrusting the application process to experienced professionals, you can focus on other aspects of your trip preparation, knowing that your visa and passport requirements are being handled efficiently.

Car Rental Commissions

Car rentals provide travelers with the flexibility and convenience to explore their destinations at their own pace. Whether you’re traveling for business or leisure, renting a car can give you the freedom to visit off-the-beaten-path attractions and make spontaneous stops along the way.

Car rental commissions refer to the fees earned by travel agencies or online travel platforms when they facilitate car rental bookings for their customers. These commissions are usually a percentage of the rental cost and serve as a revenue stream for the agency or platform.

Travel agencies often negotiate special rates with car rental companies, allowing them to offer competitive prices and exclusive discounts to their customers. By partnering with multiple car rental providers, agencies can provide a wide range of options to suit different budgets and preferences.

When booking a rental car, it’s important to consider factors such as the size of the vehicle, the duration of the rental, and any additional services or features you may require. Some car rental companies offer add-ons like GPS navigation systems, child seats, or Wi-Fi connectivity, which can enhance your driving experience.

Additionally, it’s essential to familiarize yourself with the rental terms and conditions, including insurance coverage, mileage limitations, fuel policies, and any potential fees or penalties. This will help you avoid any surprises or misunderstandings when picking up or returning the rental car.

By utilizing the car rental services offered by travel agencies or online platforms, you can benefit from the expertise and convenience they provide. They can assist you in finding the best deals, comparing prices, and ensuring that your rental experience meets your expectations.

Group Travel and Corporate Accounts

Group travel and corporate accounts offer unique opportunities for discounts, streamlined management, and additional incentives. Whether you are planning a group trip or managing corporate travel, understanding the benefits and options available can make a significant difference in your overall experience.

Group Reservation Discounts

Planning a trip with a large group of people can be a daunting task, but it doesn’t have to be overwhelming. One of the advantages of group travel is the potential for group reservation discounts. Many hotels, airlines, and tour operators offer special rates or packages specifically designed for groups. These discounts can range from a percentage off the regular price to exclusive group rates that are significantly lower than individual bookings.

When booking accommodations for a group, it’s important to consider the specific needs and preferences of your group members. Some hotels offer group packages that include discounted room rates, complimentary breakfast, or even meeting room facilities. By taking advantage of these group reservation discounts, you can save money while ensuring that everyone in your group has a comfortable and enjoyable stay.

Corporate Travel Management Fees

Managing corporate travel can be a complex process, especially when dealing with multiple employees and various travel arrangements. That’s where corporate travel management fees come into play. Many companies choose to outsource their travel management to specialized agencies or consultants who can handle all aspects of corporate travel, including booking flights, arranging accommodations, and managing expenses.

These travel management services typically charge a fee for their expertise and assistance. However, the benefits of outsourcing travel management can outweigh the costs. By letting professionals handle the logistics of corporate travel, companies can save time, reduce administrative burdens, and ensure that their employees have a seamless travel experience. Additionally, travel management agencies often have access to exclusive discounts and perks, further optimizing travel expenses for corporate accounts.

Incentive Program Commissions

Incentive programs provide an extra layer of motivation and reward for both group travel and corporate accounts. These programs offer commissions or incentives to individuals or organizations that help promote and sell travel packages or services. For example, a travel agent who brings in a certain number of bookings for a specific destination may earn a commission or bonus.

Incentive program commissions can vary depending on the travel industry and the specific program. Some programs offer a percentage-based commission, while others may provide a flat fee for each booking. These incentives can be a win-win situation for everyone involved – the travel agent or organization earns extra income, and the travelers benefit from the expertise and recommendations of the agent.

By participating in incentive programs, travel agents and organizations can not only boost their revenue but also enhance their reputation and build stronger relationships with their clients. These programs create a sense of trust and loyalty between the agent and the traveler, fostering long-term partnerships and repeat business.

Explore exclusive group reservation discounts for your next group trip.
Optimize your corporate travel management with professional assistance.
Earn commissions and incentives through participation in incentive programs.

Remember, when it comes to group travel and corporate accounts, the possibilities are endless, and the rewards are plentiful. Start exploring today and unlock a world of opportunities.

Affiliate Partnerships

Affiliate partnerships are a popular revenue model in the travel industry, allowing businesses to earn commissions by promoting and selling products and services from partner companies. By joining affiliate programs, travel agencies and online travel platforms can expand their offerings and generate additional income. Let’s take a closer look at some specific types of affiliate programs in the travel industry.

Hotel Affiliate Programs

Hotel affiliate programs are a great way for travel agencies and online platforms to earn commissions by promoting hotel bookings. As an affiliate partner, you can showcase a wide range of hotels to your customers, offering them various options that suit their preferences and budget. When a customer books a hotel through your affiliate link, you earn a commission based on the booking value.

Joining a hotel affiliate program opens up a world of possibilities. You can access a large inventory of hotels worldwide, ranging from budget-friendly options to luxurious resorts. This allows you to cater to different types of travelers and provide them with tailored accommodation choices.

To make the most of hotel affiliate programs, it’s important to choose partners that offer competitive commission rates and have a strong reputation in the industry. Additionally, consider the ease of integration and the level of support provided by the affiliate program. Some programs may provide you with promotional materials, such as banners and widgets, to help you effectively market the hotels to your audience.

Car Rental Affiliate Programs

Car rental affiliate programs provide travel agencies and online platforms with an opportunity to earn commissions by promoting car rental services. By partnering with reputable car rental companies, you can offer your customers convenient transportation options for their trips.

When you join a car rental affiliate program, you gain access to a wide selection of vehicles, ranging from compact cars to SUVs and luxury vehicles. This allows you to cater to the diverse needs of your customers, whether they’re looking for an economical option or a comfortable ride for their vacation.

As an affiliate partner, you can earn a commission for each successful car rental booking made through your affiliate link. This commission is typically a percentage of the rental cost or a fixed amount per booking.

To maximize your earnings from car rental affiliate programs, it’s important to consider factors such as the availability of inventory, competitive pricing, and the ease of booking process for your customers. Additionally, look for programs that provide reliable customer support and offer attractive commission rates.

Activity and Tour Affiliate Programs

Activity and tour affiliate programs allow travel agencies and online platforms to earn commissions by promoting various activities and tours to their customers. These programs give you the opportunity to offer unique experiences and add value to your customers’ travel itineraries.

As an affiliate partner, you can showcase a wide range of activities and tours, such as city tours, adventure activities, cultural experiences, and more. This allows your customers to explore their chosen destination in a more immersive and exciting way.

When a customer books an activity or tour through your affiliate link, you earn a commission based on the booking value. This commission can be a percentage of the total booking cost or a fixed amount.

To succeed in promoting activity and tour affiliate programs, it’s important to choose partners that offer a diverse range of experiences, cater to different interests and age groups, and provide reliable customer service. By offering unique and memorable activities, you can enhance your customers’ travel experiences and generate additional revenue.

Are you ready to take your travel experience to the next level? Explore our range of partner hotels, car rental services, and exciting activities and tours to create unforgettable memories on your next trip.

Hotel Affiliate Programs 1. Access a wide range of hotels worldwide, catering to different budgets and preferences. 2. Earn commissions by promoting hotel bookings through your affiliate link. 3. Choose reputable partners with competitive commission rates and strong industry reputation. 4. Consider ease of integration and support provided by the affiliate program.

Car Rental Affiliate Programs 1. Provide your customers with convenient transportation options by promoting car rental services. 2. Gain access to a diverse selection of vehicles, from economical options to luxury rides. 3. Earn commissions for successful car rental bookings made through your affiliate link. 4. Look for programs with reliable customer support and attractive commission rates.

Activity and Tour Affiliate Programs 1. Enhance your customers’ travel itineraries by offering unique experiences and tours. 2. Showcase a wide range of activities, catering to different interests and age groups. 3. Earn commissions for activity and tour bookings made through your affiliate link. 4. Choose partners that provide diverse experiences and reliable customer service.

Remember, by joining affiliate programs, you not only expand your offerings but also provide valuable options and experiences to your customers. So, why wait? Start exploring our affiliate partnerships today and unlock a world of possibilities for your next trip.

Travel Packages and Bundles

Vacationing is a delightful escape from the mundane routine of everyday life. It allows us to explore new destinations, experience different cultures, and create lasting memories. When it comes to planning a trip, many travelers seek convenience and affordability. This is where travel packages and bundles come into play. These comprehensive offerings provide a hassle-free way to enjoy a well-rounded vacation experience. Let’s take a closer look at the various types of travel packages and the commissions associated with them.

All-Inclusive Package Commissions

All-inclusive packages are a popular choice among travelers who yearn for an immersive vacation without the stress of planning every detail. These packages typically include accommodation, meals, transportation, and sometimes even activities and entertainment. Travel agencies often collaborate with resorts and hotels to curate such packages, ensuring a seamless experience for their customers.

From a commission perspective, travel agents earn a percentage-based commission on the total cost of the all-inclusive package. This commission is usually negotiated between the travel agency and the resort or hotel. The percentage can vary depending on factors such as the volume of bookings made by the agency or the exclusivity of the partnership.

For example, if a traveler books an all-inclusive package worth $2,000 through a travel agency, and the agreed commission rate is 10%, the agency would earn a commission of $200. This commission serves as a reward for the agency’s role in connecting the traveler with the perfect all-inclusive experience.

Cruise Package Commissions

Cruise vacations offer a unique way to explore multiple destinations while enjoying the luxuries and amenities of a floating resort. Cruise lines collaborate with travel agencies to create enticing packages that cater to different interests and budgets. These packages often include accommodation, meals, onboard activities, and access to various ports of call.

When it comes to commissions, cruise package bookings work slightly differently. Instead of a percentage-based commission, travel agents earn a flat fee commission for each cabin booked. This fee is determined by the cruise line and can vary depending on factors such as the length of the cruise, the cabin category, and the sailing date.

For instance, if a travel agent books a cruise package that includes four cabins, and the agreed flat fee commission per cabin is $100, the agency would earn a commission of $400. This commission rewards the agency for their expertise in matching the traveler with the perfect cruise experience.

Vacation Package Commissions

Vacation packages, also known as bundled vacations, combine different elements of a trip into a single, convenient booking. These packages often include flights, accommodation, and sometimes additional components such as car rentals or activities. The goal is to provide travelers with a seamless and cost-effective way to enjoy their vacation.

In terms of commissions, travel agents can earn both percentage-based and flat fee commissions on vacation packages. The commission structure may vary depending on the components included in the package and the agreements between the travel agency and the various service providers.

For example, if a traveler books a vacation package worth $3,000 through a travel agency, and the agreed commission rate is 7%, the agency would earn a commission of $210. Additionally, if the package includes a car rental, and the agreed flat fee commission for car rentals is $50, the agency would earn an additional $50. These commissions reflect the agency’s role in curating a comprehensive vacation experience for the traveler.

(Note: The information provided in this section is based on industry standards and practices. Commission rates and structures may vary between travel agencies and service providers. Please refer to your specific travel agency or service provider for accurate and up-to-date information.)

What is a commission override?

How commission overrides differ from regular commissions.

Regular commissions are earned by individual sales representatives for the sales they generate. These commissions are typically calculated based on a predetermined percentage of the revenue generated from each sale. In contrast, commission overrides are calculated based on the overall performance of the entire team or department under a manager's supervision.

For example, if a sales manager oversees a team of ten sales representatives and the team achieves a collective sales target, the manager will receive a percentage of the total sales made by the team. This approach emphasizes the importance of effective leadership in driving overall team performance, rather than focusing solely on individual achievements.

Examples of Industries Where Commission Overrides are Common

Commission overrides find prevalence in industries such as real estate, insurance, financial services, and direct sales. In these industries, where teamwork and leadership are pivotal to success, commission overrides act as a powerful motivational tool for sales managers.

For instance, in the real estate industry, a brokerage firm may offer commission overrides to team leaders based on the total sales volume achieved by their team. This encourages team leaders to mentor and support their agents, fostering a collaborative and competitive environment that benefits the entire firm.

The Role of Managers in Commission Overrides

The relationship between managers and commission overrides.

Commission overrides create a direct link between a manager's financial incentive and their team's success. By aligning their earnings with their team's performance, managers are motivated to invest time and effort in mentoring, supporting, and empowering their subordinates.

Effective managers understand that their success is directly tied to the success of their team. As a result, they prioritize the development of their team members and actively work to remove obstacles that hinder their performance.

The Importance of Effective Leadership in Driving Team Performance

Effective leadership plays a significant role in shaping the performance of a sales team. Managers must set clear goals, provide guidance, and foster a supportive work environment to enable their team members to achieve their full potential. Commission overrides serve as an additional incentive for managers to be proactive and invested in their team's success.

A strong leader creates a positive work culture, where team members feel valued, supported, and encouraged to excel. This leads to increased employee satisfaction, reduced turnover, and enhanced overall team performance.

How Commission Overrides Incentivize Managers to Support and Guide Their Teams

The prospect of earning commission overrides encourages managers to go beyond their responsibilities as supervisors. They become instrumental in training and developing their team members, resolving challenges, and promoting teamwork. The result is a cohesive and high-performing sales force.

Managers with the opportunity to earn commission overrides have a vested interest in the long-term success of their team. They are more likely to invest time and resources in training and skill development, resulting in a team that is better equipped to achieve their sales targets consistently.

Advantages of Commission Overrides:

Motivation for Effective Leadership: Commission overrides incentivize managers to take an active interest in their team's success. Knowing that their earnings are directly tied to the team's performance, managers are motivated to provide guidance, support, and mentorship, fostering a positive and productive work environment.
Team Collaboration and Cohesion: Commission overrides promote teamwork and collaboration among sales representatives. Instead of competing against each other, team members are encouraged to support and assist one another, leading to a cohesive and high-performing sales force.
Alignment with Organizational Goals: Commission overrides align the interests of managers with the company's objectives. By linking financial incentives to team performance, managers are driven to prioritize the achievement of collective sales targets, resulting in better overall alignment with the organization's goals.
Improved Employee Satisfaction and Retention: Commission overrides can enhance employee satisfaction and retention. When managers actively invest in their team's success, sales representatives feel valued and supported, leading to increased job satisfaction and reduced turnover rates.
Enhanced Sales Performance and Revenue Growth: Commission overrides have been shown to drive improved sales performance and revenue growth. Effective leadership, combined with a collaborative work environment, motivates sales reps to strive for excellence, resulting in higher sales figures and increased profitability for the company.

Potential Challenges and Pitfalls

Addressing possible downsides of commission overrides.

While commission overrides can be highly effective, they are not without challenges. One potential downside is increased competition among managers vying for top-performing team members, leading to potential conflicts and demotivation within the team.

When commission overrides are not implemented with clear guidelines and transparency, managers may focus excessively on recruiting the best salespeople to maximize their overrides. This can lead to resentment among team members and a negative work environment.

Mitigating Potential Issues, Such as Competition Among Managers

To address potential challenges, companies should implement clear guidelines for allocating commission overrides. Emphasizing teamwork over individual competition and offering transparent performance evaluations can help mitigate negative consequences.

To ensure fair distribution of commission overrides, companies can set clear criteria for eligibility and consider factors beyond just sales performance. For instance, they can factor in team collaboration, customer satisfaction, and employee development efforts in the evaluation process.

Striking the Right Balance Between Individual and Team Performance

Balancing individual achievements with team-oriented efforts is crucial for sustainable success. Companies should ensure that commission override structures encourage both personal growth and collective accomplishments, fostering a harmonious workplace.

To achieve this balance, commission override structures can be designed to include individual performance metrics alongside team-based goals. This encourages both individual excellence and teamwork, promoting a well-rounded approach to sales success.

How to calculate override commission

Calculating commission overrides involves determining the additional compensation earned by managers based on the sales performance of their team. The specific formula for calculating commission overrides may vary depending on the company's compensation structure and policies. However, a common approach is to calculate the override as a percentage of the total sales generated by the team or department.

Let's consider two examples to illustrate the calculation of commission overrides:

Example 1: Flat Percentage Override

Company XYZ has a commission override system where managers receive a flat percentage override of 2.5% of their team's total sales. Manager John oversees a team that generated $500,000 in sales for the quarter. Let's calculate John's commission override.

Calculation: Commission Override = Team Sales Override Percentage Commission Override = $500,000 2.5% (0.025) Commission Override = $500,000 * 0.025 Commission Override = $12,500

In this example, Manager John's commission override for the quarter is $12,500.

Example 2: Graduated Percentage Override

Company ABC has a graduated commission override system, where managers receive different commission percentages based on their team's total sales. The commission rates are as follows:

0% override for team sales below $100,000
1.5% override for team sales between $100,000 and $200,000
3% override for team sales above $200,000

Manager Sarah's team generated $250,000 in sales for the month. Let's calculate Sarah's commission override using the graduated percentage override system.

Calculation: Commission Override = Team Sales * Override Percentage

For sales between $100,000 and $200,000: Commission Override = ($200,000 - $100,000) 1.5% (0.015) Commission Override = $100,000 0.015 Commission Override = $1,500

For sales above $200,000: Commission Override = ($250,000 - $200,000) 3% (0.03) Commission Override = $50,000 0.03 Commission Override = $1,500

Total Commission Override = $1,500 (from the $100,000 - $200,000 range) + $1,500 (from the above $200,000 range) Total Commission Override = $3,000

In this example, Manager Sarah's commission override for the month is $3,000.

Best Practices for Implementing Commission Overrides

Implementing a well-structured commission override system requires thoughtful planning and consideration. To ensure its effectiveness, companies should follow these best practices:

Clearly Defined Goals: Set specific and measurable sales goals that align with the company's overall objectives. The goals should be challenging yet attainable, motivating managers and their teams to strive for excellence.
Transparent Criteria: Establish transparent criteria for commission override eligibility and payout calculations. Clearly communicate these criteria to all team members, ensuring a fair and equitable system.
Performance Tracking: Utilize effective performance tracking systems to monitor the progress of individual team members and the overall team. This data-driven approach helps managers identify areas for improvement and provide targeted support.
Continuous Training and Development: Invest in ongoing training and development programs for both managers and sales representatives. Equipping them with the necessary skills and knowledge empowers them to deliver exceptional results.
Timely Payouts: Ensure that commission overrides are paid out promptly and accurately. Timely rewards reinforce positive behavior and motivate managers to maintain high-performance standards.

As businesses continue to navigate dynamic markets, commission overrides remain a potent tool for encouraging collaboration, enhancing sales performance, and shaping successful leadership. Emphasizing the importance of aligning compensation strategies with organizational goals, readers are encouraged to explore how commission overrides can be effectively integrated into their unique business environments to drive success and boost employee satisfaction. By implementing best practices, embracing emerging technologies, and anticipating future trends, companies can unleash the full potential of commission overrides to thrive in the ever-changing world of sales and leadership.

Ready to make sales commissions your strongest revenue lever?

A business journal from the Wharton School of the University of Pennsylvania

Will Commission Cuts Kill the Small Travel Agent?

May 8, 2002 • 7 min read.

When an industry’s revenue base vanishes, it’s time to collapse – or transform. That’s the choice travel agents have faced since March when eight of the nation’s ten largest airlines reduced their base commissions to zero. As a result, agents will have to change from being commission-dependent retail clerks into service-focused professionals with knowledge that leisure travelers are willing to pay for, according to Wharton professors and other experts.

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Ben Vinod 2

Part of the book series: Management for Professionals ((MANAGPROF))

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This chapter discusses revenue management tools required for travel agencies to generate incremental revenues based on their negotiated contracts with airlines. Optimizing front end commissions, back end commission (also known as override commissions) and markup of net fares are reviewed. Agency productivity can be enhanced by managing the screen real estate for the agency desktop and normalizing hotel products from multiple sources for quick comparison shopping are reviewed. Optimizing travel spend for corporations by agencies is reviewed.

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Guenther, D., Ratliff, R., & Sylla, A. (2012). Airline distribution. In C. Barnhart & B. Smith (Eds.), Quantitative problem solving methods in the airline industry: A modeling methodology handbook (Chapter 4, Section 4.3.1). New York: Springer Science+Business Media.

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Sheppard, S. (2019). What’s the best way to claim air commissions you have already earned? Automate the Process . Retrieved from https://www.sabre.com/insights/whats-the-best-way-to-claim-air-commissions-you-have-already-earned-automate-the-process/ . Sabre Blog, October 29.

Smith, B. C., Darrow, R., Elieson, J., Guenther, D., Rao, B. V., & Zouaoui, F. (2007). Travelocity becomes a travel retailer. Interfaces, 37 (1), 68–81.

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Vinod, B. (2021). Agency Revenue Management. In: The Evolution of Yield Management in the Airline Industry. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-030-70424-7_8

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PRACTICAL TRAVELER

PRACTICAL TRAVELER; Airline Rebates for Agents: The How and the Why

By Betsy Wade

April 25, 1993

IN the travel business, override is a buzzword that behaves like a four-letter word. If a newspaper says that a travel agent receives override commissions, meaning bonuses above 10 percent for an airline ticket, agents turn as defensive as if they had been accused of stealing dimes from paupers.

In February, The Wall Street Journal reported that agents were "grabbing" commissions as high as 25 percent while the airlines wasted away. Trade publications for the travel industry responded with editorials and articles pointing to the essential role of travel agents, who now sell 80 to 85 percent of the airline tickets in the United States, a statistic no one disputes. Agents were evidently pained because they believed the article made it appear they were taking juicy commissions, not quite the case in a time of dwindling profits. Even American Express, the largest in the business, is having a hard time.

The Basic Questions

If the heat can be dispelled from the topic, the real questions are: How do bonus commissions work? Who gets them? Are they likely to knock out more airlines? Do they help or hurt travelers?

Override commissions are not a new topic. They became legal in 1978, when the Government stopped regulating air fares. But they were paid before that just the same. Harold Seligman, now president of Management Alternatives in Stamford, Conn., which advises companies on managing travel and entertainment expenses, says that in "the old days" in 1977, when he was a tour operator, he saw airlines pay commissions of 30 to 35 percent, but the money went for an agency's printing bill or advertising, so it did not appear as income.

Now commissions of all sizes in many forms are paid over the counter. Robert A. Moss of R. A. Moss Associates in Belmont, Mass., which counsels agencies, said that in the third quarter of 1992, Northwest Airlines reported revenues for its Pacific service of $740 million and commissions to agents on this of $243 million, which works out to 32.8 percent. A Northwest spokesman said, "Commission figures are a private matter between us and our partners."

For a starting point, basic commissions are tracked through the Airlines Reporting Corporation, a clearinghouse to which agencies report their sales weekly and the airlines draw their part, as in a checking account. Although basic commissions are usually described as 10 percent, they are more like 9 percent of the ticket cost because no commission is paid on the 10 percent Federal tax.

In 1992, travel agencies in the United States reported ticket sales of $51 billion to the Airlines Reporting Corporation; the total number of travel agency offices at the end of the year was 40,833, according to Diana Kubik of the A.R.C. The corporation tabulated tickets of 136 airlines worldwide. Commissions reported on tickets for the year totaled $5.26 billion ($3.56 billion domestic, $1.7 billion international) paid by this route. It works out to just over 10 percent on the total, higher on international sales than domestic, as shown in the adjoining chart.

Not appearing on these reports are incentive commissions, overrides, that an airline pays directly to an agency quarterly if it passes a certain sales threshold and continues to increase sales for a particular airline. While these arrangements are perfectly legal, airlines and agencies dislike talking about them for the same reasons employees hate to discuss their salaries with one another. Most of the sources for the data in this column are consultants who advise agencies and companies, but they will not often give names. There are also "soft money" commissions paid to agencies (free tickets, seat upgrades and the like) that can be distributed by them to good customers.

Leaving aside the free tickets, John H. Caldwell of Caldwell Associates in Washington, a lawyer who has been in the travel industry 25 years, believes that average incentive commissions on domestic sales, beyond those reported to the airline group, are 1 to 5 percent; Mr. Moss put it at 5 percent, Mr. Seligman at 4 percent. Mr. Moss estimated that $500 million was paid annually in incentive commissions on domestic tickets.

On overseas tickets, Mr. Seligman put the average figure at 23 percent above the basic commission. Mr. Caldwell said that foreign airlines might pay agents a total of 35 points above the ticket price, including the basic commission.

Randall Malin, a consultant in Alexandria, Va., who was formerly USAir's executive vice president for sales, said: "We really need two terms, one for the mega-agencies and one for the mom-and-pop agency in Texas. To lump the four biggest, American Express, Carlson, Rosenbluth and Thomas Cook, with the mom-and-pop agencies is a mistake. Maybe Mom and Pop get some tiny override payment because they belong to an agency co-op. But only 10 to 15 percent of the agencies are receiving big overrides, and these are the ones that do a lot of volume. " What the Effects Are

What does the incentive commission system mean to the leisure traveler? Mr. Malin explained that the automated system, beginning in 1976, moved travel agencies heavily into bookings for commercial travelers. Until then, companies handled their own travel arrangements. This started a period of explosive growth for travel agencies, and with this boost the portion of all ticket sales they handled began to climb from 40 or 65 percent to the 80 percent range.

The importance of business travel to travel agencies led to the creation of the incentive commission system. While a pleasure traveler's ticket may help an agency reach its target for the period, it is the dependable, more expensive business ticket that is the breadwinner. Like the three other experts, Mr. Malin said that of course companies negotiating with a travel agent seek to get part of the bonus commission back as a rebate. The consultants were all hesitant to discuss this, but it is clear that no company of any size makes a deal with a travel agency that does not include a rebate.

Do leisure travelers ever get a pass-along discount? No, the experts agree, even though some big leisure-business agencies certainly get bonus commissions from the airlines too. An upgrade coupon, perhaps. Or a free ticket for a good customer.

In the cruise business, where incentive commissions for agents are the norm, some big commissions may become a discount for the consumer. But agencies that openly rebated part of airline commissions to the pleasure traveler, like McTravel in Illinois, lost court battles to the airlines and could not stay in business.

Are override commissions a major reason for the shrinking profit margins of United States carriers? Will they cause another airline collapse? While the weaker airlines must pay more commissions to get ahead, the experts all thought thatthe airlines' problems were more profound. "The system is of their own making," Mr. Malin said of the airlines, which he said were spending too much on ticket distribution. "I do not know one single C.E.O. who is not trying to figure out how to get control of these ever-spiraling costs."

Does the incentive commission system help or hurt the pleasure traveler? If he or she uses a giant agency for two vacation tickets a year, the overrides are probably a source of frustration because the big agency is focused on the business accounts that are paying the bills instead of on the individual customer. On the other hand, the ticket sold in a fare war may yield a travel agent virtually nothing, especially if it must be rewritten, so the big accounts may be keeping the agent in business. If a small agency that never sees an incentive commission wants to pay attention to you and sell you a ticket, you may be just as well off.

The Practical Traveler column on April 25 referred incorrectly to the status of McTravel, an Illinois travel agency offering rebates of commissions to customers. McTravel, now using the name Travel Avenue, is in business.

How we handle corrections

Sales Commissions Explained

Sales commissions made easy.

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Sales Commission – Key Terminology And Definitions

Are you responsible for sales commissions but don’t have time to learn all the terminology? Or, perhaps, you are on the receiving end of sales commissions, but someone used terminology which you found confusing? Here are practical definitions to help you make sense of all this. After reading this, you’ll be able to follow any discussion about sales commissions! Visit us online to learn more about automating your commissions. For a more complete overview, read our guide about defining commission plans.

Accelerators – Accelerators afer just one type of “kicker”. They usually take the form of higher commission rates, which are only applicable to higher levels of attainment. Example: “Our SDR plan includes an accelerator – after reaching 150% of quota, you will receive an additional 1% per deal (in addition to the regular 5%)” .

Attainment – Attainment represents achievement vs. a sales performance goal for a specific time period. Often, each rep’s attainment is measured using “credits” (see definition below). Typically, credits and attainment impacts commission amounts or rates. Attainment can be measured using absolute values (ex: attained total revenue), or in relation to a quota (ex: % of quota attained). More advanced types of attainment are also possible (ex: competitive ranking, year-over-year growth, etc.). Example: “Sara did great last month – her attainment was 125% of quota” .

Balance – When reps are granted recoverable advances, they have a repayable debt to the organization. Each rep’s balance tracks how much they owe. A rep’s balance may go up (when recoverable amounts are granted), or down (when repaid by the rep). Example: “John has a balance of $1000 because he received two advances of $500 this month and last month” .

Blended Rates – Suppose that you have 2 attainment tiers. Under quota, the payout is 5% of revenue. Above quota, the payout is 10% of revenue. Now, there could be a situation where a single (potentially large) deal crosses tiers. A portion of the deal’s amount is effectively under the quota threshold. Another portion of the deal’s amount is effectively above the quota threshold. Enter blended rates. Each tier’s commission rate is applied to a portion of the deal. Example: “Your blended rate on this deal is 7.5%, because 50% of revenue was paid at 5%, and 50% of revenue was paid at 10%” .

Bonus – Often, commissions are calculated on a per-deal basis. Each per-deal commission can be a fixed amount (ex: $100 per deal), or a percentage (5% of revenue). However, there are cases where rewards need to be lump-sum amounts. In this case, payouts are not per-deal, but cash amounts. Note that bonuses can create problems if you must track how much commissions were paid on a per-deal basis for accounting purposes (ASC 606, amortization, etc.). Example: “Jane is getting a $1,000 bonus for winning this week’s sales contest” .

Calculation – A calculation consists in calculating commissions for one specific incentive plan and calculation period. For example, if you have a quarterly AE bonus plan, you will have a Q1 calculation, a Q2 calculation, a Q3 calculation for the same AE bonus plan. Each calculation determines which transactions fall within the calculation period, what the attainment is for each target, and what payouts should be. Example: “We’ll need to re-calculate Q1 commissions for AEs because we received updated December sales data” .

Credits – Crediting is the action of attributing deals to reps for the purpose of calculating commissions. When a rep is credited with a deal, this impacts their attainment. Reps may be credited directly, for example because they own deals. Or, reps may be credited indirectly , for example because they manage a territory or other reps. Credits can be expressed as total revenue (ex: $50,000 in credited revenue), or other metrics (ex: 10 appointments, 20% margin growth, etc.). Example: “Bob was credited with 10 sales last month , representing $25,000 in total margin” .

Claw-Back – A claw-back consists in recouping paid commissions following an adverse event (ex: a cancellation, a refund, non-payment, etc.). An alternative name for claw-backs is charge-back. Claw-backs can be easy or difficult to implement, depending on the trigger (ex: non-payment after 2 months), charge-back amount (ex: fixed vs. prorated), and repayment rules (ex: use paid commissions to cover claw-backs). Example: “We should issue claw-backs for Terry because we didn’t receive payment for 2 of his invoices and we pre-paid commissions on those” .

Draw – A draw is equivalent to a minimum commission guarantee – essentially an advance. Draws are common for new employees whose payouts may remain low while ramping up. When a rep’s earned commissions fall below a certain limit, some “padding” commission amount may be granted in the form of a draw. Draws can be recoverable (i.e. they need to be repaid), or non-recoverable (i.e. they are forgiven). Example: “ All new employees will receive a recoverable draw of $5000 per month while in training – repayment will start as soon as covered by commissions” .

Draw Repayment – A draw repayment occurs when a rep was previously granted recoverable payouts / advances, and their owed balance is being repaid (partially or in-full). Typically, recoverable amounts are only repaid by commissions (not deductions from salary). Sometimes, the draw repayment amount is capped, making repayment more gradual. Example: “ Eric repaid $100 from his owed recoverable balance last period – his commission was $1100, with a repayment maximum of $100 per period “.

Earned Commissions – There is no standard definition of “earned commissions”. Some organizations declare commissions as “earned” as soon as they are calculated, but those “earned” commissions won’t be paid unless payment is received. Other organizations declare commissions as “earned” only if they have been fully processed by payroll. We recommend not using this terminology because it is confusing, and can cause legal headaches (ex: you declared commissions as “earned” and are now legally required to pay them).

Estimated Commissions – An estimated commission is an expected commission, but only an approximation. This is common in situations where commissions are estimated based on CRM opportunity amounts, but payment of actual commissions depends on payments being received from customers. Often, the actual amount received from customers differs from the CRM opportunity amount (for example due to taxes or discounts). Estimated commissions allow your reps to forecast and track expected payouts.

Incentive Plan – An incentive plan represents a commission structure (i.e. a way to pay commissions). Each plan measures some type of performance (ex: finding leads, closing deals, booking appointments, etc.) over a certain period, and assigns rewards based on attainment. Each plan will also have a list of eligible payees, often based on role. Example: “The STM bonus plan is for senior territory managers only, and pays commissions monthly, based on year-over-year territory revenue growth” .

OTE – On-target earnings (also known as OTE or “on-track” earnings) represent expected earnings for a given role when all expected performance goals (ex: quotas) are satisfied. OTEs help reps estimate what their commission should / could be, and help organizations define a commission budget as well. Example: “For this role, the base pay is $50K, and the OTE is $30K at 100% of quota” .

Override Commissions – There are two possible meanings for “override”. The first definition of override commission is commission received by managers based on some type of rollup (ex: team rollup, territory rollup). Example: “VPs will receive a 0.5% override commission on all sales within their territories” . The second definition of override commission is an exception to a calculated commission. Example: “We’ll need to override Bob’s commissions because one deal had the wrong amount” .

Pay When You Get Paid – A commission structure where closing deals drives attainment (and so estimated commission payouts), but actual payment of commissions is delayed until payment is received from customer. This often involves two systems (ex: a CRM and an Accounting system) and two types of records (ex: CRM opportunities and Accounting invoices). Example: “ For this plan, attainment is measured using SalesForce closed opportunities, but commissions are issued when payment is received within QuickBooks “.

Quotas – Quotas are sales goals which are valid for a specific time period. Quotas can be expressed using revenue (ex: $50,000 / quarter), or other metrics (ex: 10 appointments / week). Often, quotas impact commission amounts or rates. Also, quotas typically change over time. In some cases, reps are expected to meet quota before they receive meaningful commissions. Example: “Joe’s quota for Q1 is $50,000 in total revenue, with a 0.5% payout under quota, and 5% above quota” .

Quota Retirement – When reps are credited with deals, they receive attainment via credits (see definition above). Their attainment is used to retire their quota. The idea here is that commissions will remain lower until quotas are met (i.e. retired). The idea of retiring quota is more common for incentive plans which are YTD or QTD, because quotas tend to be large and retiring the quota represents a significant milestone. Example: “Ted already retired his annual quota – his sales were $110,000 for an annual quota of $100,000” .

Plan Targets – To define a commission structure, you have to measure sales performance. You could measure the performance of specific individuals, or you could measure the performance of specific territories / teams. Those individuals or teams are plan targets. Note that payees may differ from targets. For example, you could measure the performance of teams (so those teams are plan targets) but pay managers. Or you could measure the performance of individuals (so those individuals are plan targets) but pay their managing VPs. Make sure to use a solution which offers this level of flexibility.

Ramped Quotas – A ramped quota is a quota which gradually increases over time. Ramped quotas are often used to artificially reduce quotas for new employees while ramping up (ex: building a new pipeline of deals). Often, the ramped quota is calculated based on current employment duration. Example: “New employees will receive a ramped quota, which is 30% of their regular quota for their first month of employment, and 60% of quota from their second to fifth month of employment” .

Reward – A reward is equivalent to a commission payout, but a bit more general. For example, rewards may include non-monetary incentives such as perks, badges, emails, prizes, etc. Example: “Reps who attain 150% of quota in Q1 will receive an extra 2% commission for all their Q2-Q4 deals” .

Release – After calculating commissions (manually or automatically), you have to decide when to publish commission statements to your payees. The release process consists in publishing either intermediary (ex: mid-period), or final (ex: frozen) commission statements to your payees. With manual spreadsheets, you would manually distribute them, or send them via email. With an automated commission system , you would release them to your reps’ online dashboards.

Rollups – Whenever there is some type of hierarchical structure, there is an opportunity for rollups. The rollup may apply to crediting, and/or to payouts. For example, territory managers could have their performance measured based on how each region they manage performs. Or, a VP of sales may be paid based on commissions received by his/her employees. Example: “For the purpose of crediting, each regional VP will be credited for all strategic sales within their territory hierarchy” .

Sales Contest – A sales contest is a type of incentive plan which is based on relative performance (i.e. a rank). Based on each rep’s ranking, the highest performers will receive rewards. Sales contests are often used to promote friendly competition. Example: “Next month, we’re having a sales contest for APAC SDRs – the SDR who books the most appointments will win a trip to Mexico” .

Spiffs – A Spiff is a special one-off incentive. Spiff is sometimes understood as “Special Performance Incentive Fund”, and sometimes as “Special Performance Incentive Fund”. Therefore, there is no single definition of Spiff (other than being special). Typically, spiffs are allocated from a unique budget, are limited in duration, and exist in addition to mainline commissions. Example: “In Q1, we’ll include a $5,000 spiff for the person who closes the most deals” .

Splits – A split happens when 2 reps with the same role receive commissions on the same deal. The split may be a crediting split (ex: each rep gets credited half the deal’s amount). Or, the split could be a commission split (ex: each rep gets credited for the full deal’s amount, but only receives half their calculated commissions). Example: “Bob and Janes are splitting commissions on this deal” .

Statements – Most organizations provide periodic commission statement to all payees to inform them of their payouts and to increase transparency. Those statements can be spreadsheets with attainment, payouts, etc. Most statements include a time period and explanations as to how commissions were calculated. More detailed statements can include a list of deals, per-deal commission rates, split details, etc. Example: “We’ve now generated all February commission statements for the APAC team, and are ready to send them” .

Score – While most incentive plans use revenue or profit to measure sales performance, some plans need to “count” commissionable events (ex: the number of appointments booked, the number of deals originated, the number of solar sale installations completed, etc.). For those cases, using a score makes sense. Often, the calculated score is simple (ex: 1 point per appointment). However, some organizations may require more sophisticated scoring. Example: “Reps will be credited with 90% of revenue for gen-1 products, and 120% for gen-2 products, because we want to promote sales of gen-2 equipment” .

Tiers – Many incentive plans measure attainment, and define nuanced payouts depending on attainment. Tiers define bands of attainment, each having associated rewards. Tiers can be cumulative (in which case lower attainment tiers will also have their rewards triggered), or non-cumulative (in which case only the highest attained tier counts). Also, each tier may pay commissions over all transactions, or only over in-band transactions. Example: “Our AE plan has 4 cumulative tiers – below 40% quota, 40-100% quota, 100-200% of quota, and 200+% quota” .

Transactions – To measure sales performance, you could use invoices, deals, opportunities, orders, bookings, appointments, payments, leads, credit memos, sales receipts, etc. A transaction represents any of those! More generally, a transaction is a commissionable event. Example: “To calculate commissions, we’ll import SalesForce orders and QuickBooks payments as transactions” .

Variable – A rep’s variable is their total expected commission amount at 100% quota attainment. Typically, reps have both a base salary component, and a variable component. The variable component will be received in full if performance is at the “expected” level. Often, base commission rates are calculated by dividing rep variables by corresponding quotas. This way, attaining 100% of quota means paying the variable in full. Example: “Martha’s variable for January is $1,000, and she has a monthly quota of $10,000, so her commission rate is 10%” .

Withholdings – Sometimes, commissions are calculated but remain unpaid until actual payment is received from customers. In this case, commissions are essentially withheld until approved. Your reps should have a way to track which deals are awaiting payment. Example: “Fred has 3 commissions awaiting payment from customers” .

In Conclusion

Did we miss some important commission-related definitions? Let us know by visiting us online and leave us a message. We’d love to hear from you!

Define Override, Override Commission

override, override commission. An additional commission percentage paid when a certain volume level is achieved.

To find the abbreviation, acronym, or term you’re looking for, use the Search box (below) or click on any letter (above).

Serving the travel industry since 1999

What commission does a travel agent make?

April 4, 2023

Travel agent commissions are a critical aspect of the travel industry and significantly impact the revenue and operations of travel agencies, tour operators and other industry stakeholders. Understanding travel agent commissions is essential for agents and suppliers, as it helps create a sustainable and profitable business model.

A travel agent commission is, typically, a percentage or fixed amount paid by travel suppliers, such as airlines, hotels, cruise lines and tour operators, to travel agents for selling their products and services. This remuneration rewards travel agents who book specific suppliers, ultimately driving more business to them.

Do travel agents get commission?

Yes, travel agents typically receive commissions from travel suppliers such as airlines, hotels and tour operators as compensation for selling their travel products and services. These commissions serve as an essential source of income for travel agents.

How travel agents earn their income

Travel agents earn their income through commissions, service fees and other revenue streams. Here’s a detailed explanation of how travel agents generate income:

Commissions: Travel agents receive commissions from suppliers for selling their products and services. The commission rates vary depending on the supplier and the specific offering. Commissions are typically calculated as a percentage of the total booking value.
Service fees: With the decrease in or elimination of commissions from some suppliers, travel agents have started charging service fees directly to their clients. These fees cover the agent’s time, expertise and resources to plan and book a trip. Service fees may be charged per-service basis (e.g. booking flights, hotels or car rentals) or as a flat fee for a complete travel package.
Consultation fees: Some travel agents charge consultation fees, especially for complex or customised travel itineraries. These fees are separate from service fees and are designed to compensate the agent for the time and effort spent researching and planning the client’s trip.
Markups: In some cases, travel agents may add a markup to the supplier’s price before presenting it to the client. This markup serves as an additional source of income for the agent. However, this practice has become less common due to increased price transparency and competition in the travel industry.
Incentives and bonuses: Suppliers may offer incentives or bonuses to travel agents for reaching specific sales targets or promoting their products and services. These incentives can come in the form of cash bonuses, travel perks or increased commission rates.
Corporate contracts: Travel agents specialising in corporate travel management often have contracts with companies to handle their employees’ travel needs. These contracts can provide a steady source of income through negotiated service fees and commissions.
Referral fees: Travel agents may earn referral fees from other businesses or agents for sending clients their way. For example, an agent might receive a referral fee from a local tour operator for recommending their services to a client.

The role of commissions in travel agent compensation

Commissions play a significant role in travel agent compensation and directly impact their income and overall business sustainability. As intermediaries between travel suppliers and clients, travel agents facilitate the sale of travel products and services, and commissions are a primary form of remuneration for their efforts.

How much commission does a travel agent make?

Travel agents’ commission rates can vary significantly depending on the supplier, the type of product or service and the agent’s agreements with suppliers.

The factors that affect travel agent commissions

Several factors can affect travel agent commissions, which influence income and business sustainability.

Travel agents who establish strong relationships with suppliers, such as airlines, hotels and tour operators, are more likely to negotiate favourable commission rates. Exclusive partnerships or preferred supplier agreements may result in higher commissions for the agent. Also, agents who consistently produce high sales volumes may be eligible for higher commission rates or additional bonuses. Conversely, agents who struggle to meet sales targets may receive lower commissions.

The type of travel product or service being sold also significantly impacts commission rates. For instance, airlines, hoteliers, cruise lines and tour operators, may all offer varying commission percentages. Typically, products with higher profit margins, such as cruises and luxury accommodation, offer higher commissions.

Travel agents specialising in niche markets or specific destinations may command higher commission rates. This is because their expertise allows them to upsell additional products and services, generating more revenue for suppliers.

Larger agencies with a significant market share may have more leverage in negotiating commission rates with suppliers. Furthermore, agencies that operate on a commission-based business model, rather than charging fees to clients, may rely more heavily on commissions for their revenue and therefore negotiate for higher rates.

Finally, industry-wide changes can affect travel agent commissions. For example, regulatory changes that affect how suppliers are allowed to compensate agents or industry-wide shifts in commission structures may significantly impact agent commissions.

Examples of typical commission rates for different travel products and services

Here are some general commission rate ranges for various travel industry segments:

Airlines: Airline commissions can range from 0% to 22%, depending on whether the flights are domestic or international. However, some airlines have reduced or eliminated commissions in recent years, prompting agents to charge service fees directly to clients or focus on other revenue streams.
Hotels: Hotel commissions typically range between 8% and 15%, but rates can go higher for specific promotions or preferred partnerships.
Cruise lines: Commissions for cruise bookings generally range from 10% to 20% of the total cruise fare, depending on the cruise line and the agent’s sales volume. The average is around 16% for an ocean cruise.
Tour operators: Tour operator commissions can vary widely, from 10% to 20%. Typically they are around 16% depending on the complexity of the tour, the operator, and the agent’s relationship with the supplier.
Car rentals: Car rental commissions average at around 10%, but these can also vary depending on the rental company and the agent’s sales volume.
Travel insurance: Travel insurance commissions can range from 20% to 37%, depending on the insurance provider and the specific policy sold.

Notably, these commission rates are not fixed and can change based on factors such as the agent’s sales performance, special promotions or preferred partnership agreements. Additionally, some agents may negotiate higher commission rates or earn bonuses and incentives for reaching certain sales targets. Consequently, an agent’s total commission will depend on the mix of products and services they sell and their overall sales volume.

Case studies of travel agents and their commission earnings

The Travel Franchise franchisee Mark McCardie has been working for himself as a travel agent for two years. Coming from a corporate background, he now has reached sales of approximately £2 million. In just one day, he sold holidays worth £30,000 and took over £4,000 in commissions.

Miami-based travel agent, David Eisen, made over $1 million in commissions in 2021 when most travel businesses were going through a pandemic-induced lull in bookings. By focusing on the niche market of luxury travel and working hard to satisfy their every whim, Eisen won big!

Commission for travel agents – what is standard?

The standard commission rate for travel agents typically ranges from 10% to 15% of the total booking cost. However, this can vary depending on the travel agent’s experience, the type of booking (e.g., flights, hotels or travel packages) and the relationships between the agent and the suppliers.

What are the different commission structures used by travel companies?

Travel companies use various commission structures to compensate travel agents for their services. Some common commission structures used by travel companies include:

Flat rate commission: A fixed percentage of the total booking cost is paid to the travel agent, regardless of the product or service sold. This is the most common commission structure, with rates typically ranging from 10% to 15%.
Tiered commission: Travel agents receive a commission rate that increases as they sell more products or services. This structure incentivises agents to sell more and is often used for high-end or luxury travel services.
Commission override: Travel agents earn a higher commission rate when they reach a certain sales threshold. For example, an agent may earn a 10% commission on all sales up to a certain amount and then a higher rate of 12% for sales beyond that threshold.
Net rate commission: Suppliers provide travel agents with a “net rate,” which is the price at which they can sell a product or service to clients. The travel agent then adds their desired commission, usually a fixed percentage, to the net rate to determine the final selling price.
Commission plus incentives: In addition to the standard commission, travel agents may receive incentives or bonuses for selling specific products or meeting certain sales targets. These incentives can include cash bonuses, free travel or other perks.
Referral commission: Some travel companies pay a commission to agents who refer clients to their business. This is usually a smaller percentage of the total booking cost, as the referring agent has not made the sale themselves.

Do travel agents incur expenses?

Yes, travel agents incur expenses while running their business. These expenses can vary depending on the specific circumstances of each travel agent, such as whether they work independently, their location and the size of their operation.

What are the typical expenses that travel agents may have to pay?

Some common expenses include:

Office expenses
Technology and software
Marketing and advertising
Travel industry memberships and certifications
Professional development and continuing education
Insurance and licensing fees
Networking events and trade shows
Employee salaries and benefits (if applicable)

Understanding the financial side of being a travel agent

Understanding the financial side of being a travel agent is crucial for running a successful travel business. This involves clearly grasping the various income streams, expenses and financial management aspects associated with the profession.

Travel agents can use multiple tools and software to help manage their finances, such as accounting software, invoicing and payment systems and budgeting tools. These tools can help streamline financial processes and provide valuable insights into the business’s financial health.

It’s essential for travel agents to create a budget that outlines expected income and expenses. This helps manage cash flow and ensure the business remains financially viable. Travel agents should regularly review and update their budgets to reflect business operations and market changes.

Setting financial goals is vital for travel agents to measure success and plan for growth. These goals might include increasing sales, expanding their client base or diversifying their income streams.

Managing travel agent expenses

By effectively managing expenses, travel agents can maintain a healthy cash flow, improve profitability and ensure the long-term success of their business.

Tips and strategies for managing travel agent expenses

Here are some tips to help travel agents manage their expenses effectively:

Create a budget: Develop a detailed budget that outlines all expected income and expenses. This makes it easy to understand where your money is going and identify areas where you can cut costs or optimise spending.
Track expenses: Keep accurate records of all your expenses, including receipts and invoices, which allows you to monitor your spending, stay within budget and prepare for tax filings. Regularly review your expenses and compare them to your budget, which helps you identify any deviations and make necessary adjustments to stay on track.
Use technology: Utilise financial management tools and software to help you manage your expenses more efficiently. Accounting software, invoicing and payment systems and budgeting tools can save you time and provide valuable insights into your business’s financial health.
Negotiate with suppliers: Build strong relationships with travel suppliers and service providers, and negotiate better rates and payment terms to reduce your expenses and improve cash flow.
Optimise marketing spend: Evaluate the effectiveness of your marketing efforts and focus on the channels that deliver the best return on investment.

Best practices for keeping business costs low

To keep business costs low, travel agents can adopt several best practices such as:

Creating and sticking to a budget
Leveraging technology and software
Regularly reviewing and renegotiating contracts with suppliers
Focusing on cost-effective marketing strategies
Networking with other professionals
Implementing energy-saving measures
Investing in professional development
Outsourcing or automating non-core tasks
Regularly reviewing business processes to identify areas for improvement

By following these strategies, travel agents can effectively control costs, maintain a healthy cash flow and ensure a more profitable and sustainable business.

Wrapping up travel agent commissions

The travel industry offers various opportunities for travel agents to earn commissions and build a successful business. However, it’s essential to understand and effectively manage the expenses associated with running a travel agency to ensure profitability and long-term success.

The Travel Franchise can provide aspiring travel agents with the necessary support, training and resources to navigate the complexities of commissions and expenses in the industry. By joining The Travel Franchise, you can benefit from our established relationships with travel suppliers, access to industry-leading technology and ongoing professional development. This will empower you to maximise your earning potential while minimising business expenses.

If you’re considering a career as a travel agent or looking to grow your existing travel business, The Travel Franchise can help you achieve your goals. Take the first step towards building a successful and profitable travel agency by visiting our website and learning more about our opportunities.

Don’t miss out on the chance to turn your passion for travel into a thriving business. Get started with The Travel Franchise today!

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How much commission should you pay for distribution?

This article was published in 2018 and has been updated since for comprehensiveness.

One way to grow your booking volume is by growing your distribution strategy to get your services in front of a larger audience. This usually involves working with a reseller who relies on a commission to keep their business going. But deciding on the amount of commission to pay a reseller can be tricky and calculating it can be confusing.

Here's our guide to help you set the right commission rate with your resellers.

Why should tour and activity operators pay a commission?

Commission is the fee you pay your distributors or resellers for promoting and selling your products. It also gives them an incentive to sell your tours or activities over someone else's.

Why work with resellers? Because they make it easier for you to market your services to your target audience especially since they have a lot more marketing experience than you do. It is, after all, their job to promote tourism products to niche and mass markets, offline and online. Working with distributors can also expand your reach, for example, by promoting your products overseas.

While working with distributors is another cost you incur, you should think about how much more you stand to gain if you work with them.

Download your free commissions formula sheet

How much commission do tour and activity companies usually pay?

Your commission goes to whoever your customers book from. If your customers book through an OTA, that's who you'll be paying your commission to. If they book through a travel agent, you'll pay a commission to them instead.

Traditionally, people booked holidays via a travel agent, who would plan and arrange the entire holiday experience for their customers. They would refer to a tour wholesaler to find tours and activities for their customers to do while in destination. The tour wholesaler would then liaise with a country's inbound tour operator to get the right tour and activity supplier for the job. That's when the inbound tour operator sends you an email or gives you a call to tell you that you've got a booking.

Here are the general guidelines for commission rates throughout the industry.

1. Travel agents - 10% - 20% of retail price

Nowadays, travel agents are commonly used by big companies to arrange a holiday for their staff, or by multi-generational groups (i.e. Baby Boomers , their kids and their grand kids).

The travel agent would be the person to arrange the logistics for the travel group and suggest itineraries for the group too. By giving travel agents a commission, you give them an incentive to suggest your services over another company.

2. Tour wholesaler - 25% - 30% of retail price

Tour wholesalers link individual suppliers with tour operators, providing travel packages that include flights, accommodation and your tours and activities.

When working with travel agents, they promote tour packages that they think will appeal to the agents' customers.

Therefore, the commission charges quoted by a tour wholesaler will differ amongst suppliers. It will also differ depending on whether you want to market your services locally or internationally.

3. Inbound tour operators - 25% - 30% of retail price

Inbound tour operators are based in your country and link local suppliers (i.e. tour and activity operators, hoteliers, transport services etc.) with overseas buyers, may it be tour wholesalers, direct sellers, travel agents or event planners.

ITOs are able to tailor their travel packages according to the needs and wants of their customers, creating an itinerary that covers accommodation, tours, transport and even meals. They can also coordinate the booking and payment of travel arrangements on behalf of their customers.

Access the workshop: How to work with Incoming Tour Operators?

4. Online travel agents - 15% - 25% of retail price

Online travel agents like Viator , Expedia and Musement are growing as more and more consumers and suppliers become aware of them. In our recent survey, we found that a majority of suppliers are willing to pay no more than 15% on commission for distribution via OTAs, which is below the average of 20% commission usually charged.

As noted by Olan, although working with OTAs increases your exposure and expands your reach, a 20% commission can be a little steep, especially if you're just starting out . On top of that, OTAs usually demand the lowest possible price you can go, because they don't want you undercutting them on other platforms (like your own website).

But they are the new norm and if your business doesn't have a website or an online booking and payment system yet, this is a relatively inexpensive way to get your tours online.

5. Offline resellers (15% - 30%)

Offline resellers can be a hotel concierge, a booking agent on the street with a small stand, your local a visitor bureau or tourist information desk. Commission for these types of distribution channels vary a lot more due to the location of their offices, the foot traffic they get and the clientele they're able to attract.

Interestingly, we found that offline and in-person sales bring in lower booking numbers that online channels, but they generate higher booking value. This means that they make more money for your company despite bringing in lower booking volumes.

6. Override commission - no more than 5% of retail price

Override commission is the extra commission you give to certain distributors to incentivize them to promote your tours over your competitors. Of course this commission is completely up to you, and you're free to use it as a tool whenever you like.

Remember that you don't need to pay these commission charges separately.

If you pay a travel agent 20%, they will keep the 10% and give the other 10% to the intermediary they work with. The same goes for other distributors.

Download to find out the commission charges of large online marketplaces

How to calculate your commission rates?

Net rate = All costs + Profit margin

This is the amount you pass on to your distributors, before they add their commission charges to the final price. Your net rate should take into account your fixed and variable costs, as well as your profit margin.

Check out a previous article I wrote to help you set the right price for your tours and activities .

Gross rate = Net rate + Commission rate

The gross rate is the final price your customers pay, which includes your distribution commission. Your commission rate is usually charged as a percentage, also known as a mark-up percentage.

So, if the commission rate is 30% and your quoted net rate is €150, this is how you would calculate your final price:

Given Gross rate (100%) = Net rate (70%) + Commission rate (30%)

Gross rate (100%) = € 150 (70%) + Commission rate (30%)

Therefore, Gross rate = € 150/70% = € 214

Here's a simple rule of thumb you can follow:

For more resources, visit Tourism Boost by Small Business Development Corporation .

How can you improve your distribution strategy?

1. Experiment with different distributors

Each distributor will help you reach a different market, locally or internationally, niche or mass market. Package your product to meet the requirements of the distributor you wish to work with and monitor your results on a quarterly basis. You should be able to figure out within a year which channels work best for your business.

Read more: 10 channels to promote your tours and activities

2. Use a booking system with a live inventory

A booking system with a live inventory will allow your distributors and customers from OTAs to look at your availabilities at any time and adjust your availability whenever a booking is made. This way, you avoid multiple data entries, human errors and preventing overbooking.

3. Manage your distribution channels with an integrated booking system

An integrated booking system with features like TrekkSoft's Partner Network and Agent Desk will allow your resellers to book directly into your system, without the hassle of a phone call or email. You can also adjust the commission to pay for each reseller, allowing you to keep track of their performance too.

Read more: Channel Manager 101: How to connect to and sell on large marketplaces

Need help deciding which online travel agent you should be working with? We've got you covered.

Posted by Nicole Kow

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Travel Terms Glossary

We have provided a glossary for your use. The travel industry is replete with jargon and acronyms and we hope you find this glossary/dictionary of travel terms useful when you run across a term you are not familiar with. We encourage our clients to submit any words or concepts they would like defined or clarified to us on the Contact Us page and we will be happy to reply by email with a definition and include the term or clarification in our glossary/dictionary of travel terms for other clients benefit as well.

A la carte – referring to meals, an indication that each dish is priced separately; also that a choice of meals may be vailable, such as on a tour.

A la Carte Bar – Also known as a “Cash Bar,” a bar located within one’s hotel room that is pre-stocked with an assortment of snacks and beverages.

ABC – a reference to the Caribbean islands of Aruba, Bonaire, and Curacao, in the Netherlands Antilles, just off the northern coast of South America (Venezuela). Fabulous for diving, snorkeling and all manner of watersports.

Abeam – A directional term, used on ships and aircraft, which describes something off to the side of the vessel, such as the wings.

Accessible Tourism – Travel that ensures that there is high availability in destinations, accommodations, attractions, products, and services to all people.

Accessible Travel – Travel that ensures that there is high availability in destinations, accommodations, attractions, products, and services to all people.

Actual Time of Arrival – Literally, the actual time of arrival. As opposed to the ETA (Estimated Time of Arrival).

Add-on – an option, usually at extra cost, added to travel arrangements.

Adjoining rooms – Two hotel or accommodation rooms that have a door connecting them from the inside, allowing the guests to combine the two rooms into one larger room.

Adoption Rate – the percentage of tickets issued through an online booking system compared to the traditional booking channel of agent-assisted reservations.

ADT – Atlantic Daylight Time; Alaska Daylight Time. Advance Purchase Fare – airfare that requires the traveler to purchase the ticket a minimum number of days prior to departure.

Advance Purchase Requirement – APR, or Advance Purchase Requirement, is the requirement that a ticket must be purchased a minimum number of days before the flight departs.

Adventure tour – A tour designed around an adventurous activity such as rafting, hiking, or mountain climbing.

Adventure travel – adventure travel is category of travel involving exploration or travel with perceived (and possibly actual) risk, and potentially requiring specialized skills and physical exertion.

Adventure Traveler – Adventure travelers travel to destinations with the specific purpose of active physical participation and exploration of new experiences.

Affinity Card – These are credit or debit cards issued by a banking institution in partnership and co-branded with a particular frequent traveler program.

Affinity group – A group of people that share a common hobby, interest, or activity, or that are united through regular participation in shared outings. Also see preformed group.

Aft – toward the rear of a ship.

After-departure charge – Charges that do not appear on the guest’s bill at checkout such as telephone or dining charges.

Agent – A person who has the power to act as the representative for another person. Most frequently in travel, a specific kind of agent such as a travel agent.

AIO variables – Activities, interests, and opinions-used to measure and categorize customer lifestyles.

Air mile – a distance of approx. 6076 feet.

Air Traffic Control – Usually refers to the control tower at the airport, but may also be a control center somewhere else in charge of controlling a large area of sky.

Air Travel Card – a credit card sponsored by the airlines, for the purchase of air travel only.

Air Travel – air travel is the action or process of making a journey by aircraft.

Air/sea – a term referring to tickets, trips, fares, etc. that include both air and land-based travel arrangements, such as a cruise package with air included.

Aircraft – Generally speaking, any machine capable of flight. However, in the travel industry, these often mean airplanes.

Airline Alliance – These are agreements of cooperation between groups of airlines. Alliances offer airlines more flexibility and larger networks.

Airline fare – Price charged for an airline ticket. Several types of fares exist and can change with market conditions.

Airlines Reporting Corporation (ARC) – An organization that provides a method of approving authorized agency locations for the sale of transportation and cost-effective procedures for processing records and funds of such sales to carrier customers.

Airport access fee – a fee paid by the car rental companies to the airport authority, for the use of shuttle vehicles, etc. – usually passed on to the consumer.

Airport transfer – a transport service to/from an airport to hotel, etc., normally prepaid as part of a package tour, but available separately as well.

Air-Sea – A cruise or travel package in which one or more transportation elements are provided by air and one or more by sea. The package is usually combined with local lodging.

All Inclusive – sold for one price that includes charges and fees that are often added separately.

All-inclusive package – A tour package in which most travel elements are purchased for set price. Also called an all-expense package.

Alternative Tourism – Travel that is not conventional in nature, though that is hard to define. It can be a niche kind of tourism.

Alternative Travel – Travel that is not conventional in nature, though that is hard to define. It can be a niche kind of tourism.

Alumni tour – A tour created for customers who have previously traveled with a tour operator. Also called a reunion tour.

Ambassador – The head of a state’s diplomatic mission in another state, usually with offices inside the main embassy.

Amenities – a desirable or useful feature or facility of a building or place

Amenity package – A cluster of special features, such as complimentary shore excursions, bar or boutique credit, or wine at dinner offered to clients on a given tour or cruise, usually as a bonus or extra feature. Usually used to induce clients to book through a particular travel agency or organization.

Amenity – The facilities and features of a property, usually cruise ship, airline or destination accommodation.

American plan – a hotel’s meal plan that usually includes all three meals each day.

AMEX – American Express (AX).

Amidships – toward the middle of a ship – usually the most stable part of the vessel.

Anniversary travel – a type of milestone travel celebrating a date that is remembered or celebrated because a special or notable event occurred on that date in a previous year, such as a wedding anniversary.

Antebellum – describes a building and/or period of time prior to the Civil War, such as an antebellum mansion on a cotton plantation in the southern US.

APEX – an airline term meaning “advance purchase excursion fare” – normally the least expensive fares.

Apron – The area surrounding the gate areas of a terminal, generally used for parking and maintenance of planes.

ARC – Airline Reporting Corporation- the agency that regulates ticket sales and reports to the airlines for travel agencies.

Archipelago – An archipelago is a grouping of islands, essentially. Indonesia and Japan are both archipelago countries.

ARTA – Association of Retail Travel Agents – professional trade group of travel agents only.

ASC Fee – Administrative Service Charge. Usually it’s the same as the change fee, or the fee to exchange the ticket for future travel.

AST – Atlantic (or Alaska) Standard Time.

ASTA – American Society of Travel Agents – trade group consisting of travel agencies, travel agents, and allied members (suppliers, etc.).

ATO – Airline Ticket Office – becoming rarer these days, as carriers continue to reduce customer service.

Attractions – An item or specific interest to travelers, such as natural wonders, manmade facilities and structures, entertainment, and activities.

Autobahn – high-speed equivalent to the US interstate highway system, in Germany and a few other European countries.

Availability – The total number of seats allowed to be sold at a particular rate.

Average room rate – The total guest room revenue for a given period divided by the number of rooms occupied for the same period.

B&B – A bed and breakfast home or guest house that a proprietor has converted into accommodation(s) for the public. Each room becomes a separate unit for rent and typically breakfast and/or other meals are served as part of the fare.

Babymoon – A relaxing and romantic vacation or getaway taken by parents-to-be before their baby is born.

Back to back – A term used to describe tours operating on a consistent, continuing basis. For instance, a motor coach arriving in a city from a cross-country tour may conclude the first tour upon arrival, then transport a second group back along the same route to the origination city of the first tour.

Back-to-back ticket(ing) – an against-the-rules practice whereby an air ticket is issued round-trip with only one portion to be used. Another is then issued roundtrip, again with only one portion to be used. In effect, this amounts to using one ticket for the outbound part of a trip, and the other for the return. The normal Saturday night stay requirement is then avoided – useful only when two roundtrip tickets are less than the cost of a single ticket with no Saturday night stayover.

Baggage Allowance – The amount of baggage a passenger may transport without having to pay extra charges, determined by carrier.

Baggage handler – See porter.

Baggage master – The person who controls baggage handling on a ship.

Balcony – sometimes called a verandah – an outside “porch ” that is usually private, just outside your ship’s cabin. Great for relaxing and port arrivals!

Barge cruising – pleasure cruising along a canal system, such as in upstate New York or in Europe, in converted barges or new ships that resemble them.

Base fare – the basic price of an airline ticket, before ANY taxes, surcharges, airport fees, etc.

Base – Flight crew term for their home airport; where the flights originate from and terminate at.

Beam – a ship’s width at its widest point; determines whether or not a vessel can pass through the Panama Canal.

Bed and breakfast (B&B) – Overnight accommodations usually in a private home or boarding house, often with a full American-style or Continental breakfast included in one rate.

Bell captain – The person in charge of luggage at a hotel.

Bellboy – Also called “Bellboy” or “Bellman,” a person that is hired by the hotel to assist guests, such as with luggage, running errands, etc.

Bellman – a person who carries one’s luggage to a hotel room.

Benelux – term for the countries of Belgium, the Netherlands, and Luxembourg.

Berth – usually refers to the bed in a ship’s cabin; also the space at which a ship is docked.

Bespoke tour – a tour that is customized, personalized and tailor-made for the traveler.

Biking Trips and tours – Bicycle trips and touring means self-contained cycling trips or pleasure, adventure and autonomy rather than sport, commuting or exercise. Touring can range from single to multi-day trips, getaways or vacations.

Birthday travel – a type of milestone travel celebrating a birthday, quite often marking decade birthday milestones such as 40 th , 50 th , 60 th , 70 th etc. birthdays.

Blackout dates – Specific dates in which special fares or promotions do not apply. Typically exist around holidays or special events.

Block – A number of rooms, seats, or space reserved in advance, usually by wholesalers, tour operators, or receptive operators who intend to sell them as components of tour packages.

Blocked space – seats, rooms, and/or cabins held on airlines, in hotels, or aboard ships. Usually held speculatively and made available at reduced rates.

Boarding pass – a receipt with a seat number, now issued only at check-in at the airport. A ticket is not valid unless a boarding pass has been issued. A Boarding Pass is not a ticket, but allows you to board a plane or ship or other mode of transportation.

Boarding Pass – Bonded – protected or guaranteed by a bond, usually referring to the protection of passenger’s funds.

Booking form – A document which purchasers of tours must complete to give the operator full particulars about who is buying the tour. It states exactly what is being purchased (including options) and must be signed as acknowledgment that the liability clause has been read and understood.

Boutique Hotel – A boutique hotel is a type of hotel, usually smaller and more intimate than a chain hotel, which conforms to a niche.

Bow – Bow is a directional term. Front of a ship or the nose of an aircraft; specifically, the foremost point of the hull of the craft.

Breakage – Expenses budgeted for a tour but not used or expended, thus resulting in additional profit to the tour operator. Examples include meals budgeted but not consumed, currency fluctuations in favor of the tour operator, or the tour selling to much larger numbers of passengers than expected.

Break-even point (BEP) – The point at which revenues and expenses are the same. For example, the BEP is the number of products (or seats, cabins, tickets, etc.) that must be sold for a company to break even. The BEP is calculated as fixed costs divided by the selling price less variable costs. See reasonable number.

Break-even pricing – Pricing a product based on a forecast of the break-even point and the cost of achieving the break-even point.

Bridge – the navigational center of a ship.

Bucket list destinations – Bucket list travel is a list of destinations a person wants to travel to and experience before reaching a certain age or dying.

Bulk contract – An agreement whereby an airline sells large blocks of seats at a discount for resale by a third party.

Bulk fare – A reduced fare for purchases of a large number of tickets.

Bulkhead Seat – Seats located directly behind a bulkhead wall separator. As these seats don’t have the benefit of a seatback in front of them.

Bulkhead – A partitioning wall, usually referring to one within the cabin of an aircraft, or perhaps on another mode of transportation.

Bumping – the airline practice of denying boarding to confirmed passengers who hold tickets on a specific flight, due to an oversold condition. The carrier will ask for volunteers to take later flights, and will normally provide some sort of compensation in the form of vouchers or tickets for future travel. Rules for when compensation must be provided are complicated; ask the ticket agent for a copy of that carrier’s rules, as each has their own set of guidelines.

Business class – While amenities vary based on the airline, business class generally falls between first class and coach.

Cabin – the passenger area on an aircraft; the stateroom aboard a cruise ship.

Cabin Crew – The collective group of flight attendants and the purser as a whole. The cabin crew is responsible primarily for handling the duties within the cabin.

Cabin steward – the person responsible for maintaining/cleaning the cabins aboard ship.

Cabin-(Aircraft) – The section of the aircraft in which passengers travel.

Cabin – A sleeping room on a ship.

Cancellation penalty – the monetary penalty due when travel plans are cancelled, usually after final payment has been made.

Cape – A small version of a peninsula, usually long and narrow, that juts far out into a body of water.

Captain – (Aircraft-The captain is the pilot in command (PIC), which is the person in the cockpit sitting on the left with 4 stripes on their shoulder.

Card mill – a “business “that sells potentially fake travel agent ID cards, usually in a sort of pyramid scheme, whereby the buyer intends only to partake of any legitimate agent benefits.

Carrier – generic term for any company that transports passengers and/or freight.

Carry-on – currently, there are no uniformly enforced airline restrictions concerning carry-on luggage.

Cashless cruising – a term that applies to the system of onboard payment used for most all cruises; the final bill for any such purchases is presented against a credit card or cash deposit given upon check-in. The final statement itemizes the purchases of all passengers in a cabin, such as drinks, shore tours, etc.

Casual research – A form of marketing research that is used to test cause-and-effect relationships between a marketing program and customers.

Cay – pronounced “key” – term for a small island, used primarily in the Caribbean, such as Princess Cay.

Celebrity Travel – celebrity and high net worth travel is an ultra-luxurious travel category describing the highly demanding travel requirements of celebrity and high net worth travelers characterized by the ultra-luxurious travel modalities and destinations with attention to privacy, security and confidentiality.

Certified Tour Professional (CTP) – A designation conferred upon tour professionals who have completed a prescribed course of academic study, professional service, tour employment, and evaluation requirements. The CTP program is administered by the National Tour Association (Lexington, KY) and is open to individuals employed in any segment of the tourism industry.

Certified Travel Associate – (CTA) – a travel professional certified by the Institute of Certified Travel Agents, who has passed a series of rigorous tests, assuring the traveling public of professional competence.

Certified Travel Counselor (CTC) – A designation attesting to professional competence as a travel agent. It is conferred upon travel professionals with five or more years of industry experience who compete a two-year graduate-level travel management program administered by the Institute of Certified Travel Agents (Wellesley, MA).

Certified Travel Industry Specialist (CTIS) – A designation conferred upon American Bus Association member company employees who successfully complete five correspondence courses (three) required and two electives and written evaluation of eight marketplace seminars.

Chain-ratio method – A method for forecasting market demand by multiplying a base market figure by a series of consumption constraints.

Chamber of commerce – A DMO that operates at the local level and is comprised of businesses that are not necessarily associated with the tourism industry.

Chancery – The physical building that houses an embassy and its diplomatic delegation.

Change of equipment – when a flight, with a single flight number, lands and changes the type of airplane used before continuing on to its destination. Sometimes referred to as a change of gauge.

Charter service – The transportation of preformed groups (organized by someone other than the carrier), which have the exclusive use of the vehicle.

Charter – To hire the exclusive use of any aircraft, motorcoach, or other vehicle.

Chauffer driven tours – a chauffeur tour is a tour driven by a chauffeur employed to drive a passenger motor vehicle, especially a luxury vehicle such as a large sedan or limousine.

Chunnel – slang for the tunnel beneath the English Channel, from England to France, through which the Eurostar train passes.

Circle itinerary – A travel routing design that overnights in different locations and returns to the point of departure without retracing the travel route.

Circle trip – any trip that involves more than a single destination, but which returns to the initial point of departure.

City guide – A tour guide who points out and comments on the highlights of a city, usually from a motor coach or van.

City Pair – The departure and destination points of an air or rail journey.

City tour – A sightseeing trip through a city, usually lasting a half day or a full day, during which a guide points out the city’s highlights.

Class of Service – The inventory in which a passenger is booked according to the fare purchased. (E.g. a full fare coach class cabin is usually Y class of service)

CLIA – Cruise Lines International Association, located in New York City, NY.

Client list – A printout of the names of all tour participants.

Client mix – Objectives set by companies to achieve percentages of customers from different market segments.

Closed-end question – A question for which the answers are provided for the respondent, who chooses only from those answers.

Closeout – Finalization of a tour, cruise, or similar group travel project after which time no further clients are accepted. Any unsold air or hotel space is released, and final lists and payments are sent to all suppliers.

Coach – the “economy ” section of an aircraft, which may have literally scores of different fares for the same flight.

Collision damage waiver-(CDW) – Optional insurance provided by car rental companies that eliminates all responsibility of the driver in case of an accident. Car rental insurance covering any damage to a rental vehicle (CDW) many credit card companies cover their clients in this area if they use that card to pay for the rental. Check with you credit card company to see if you are covered and to what extent.

Commission – Money paid to a travel agency or ARC number by suppliers for generating bookings.

Commission cap – The limit placed on commissions paid to travel agents for the sale of air tickets, regardless of their price; designed to allow airlines to increase their profits at the expense of their primary distribution system – the travel agents.

Commissionable tour – A tour available through retail and wholesale travel agencies which provides for a payment of an agreed-upon sales commission to the retailer or wholesale seller.

Common carrier – Any person or organization that offers transportation for a fee.

Commuter – term referring to the small, regional airlines, sometimes called puddle-jumpers.

Comp policy – Arrangements for free tickets, rooms, meals, etc.

Complimentaries (comps) – Items provided free of charge, such as rooms, meals, tickets, airfare, gifts, souvenirs, etc.

Computerized reservation system (CRS) – An automated system used by travel agents that contains pricing, availability and product descriptions for hotels, car rentals, cruises, and air transportation.

Concierge – a hotel employee who provides additional advice, recommendations, and other services to guests, such as restaurant reservations. An employee of the hotel whose primary task is to serve as the liaison between the hotel and non-hotel attractions, facilities, services, and the guest.

Concierge Level – special service level normally offered at higher grade hotels that provide the guest additional amenities and information, typically at a higher rate.

Conditions – The section or clause of a transportation or tour contract that specifies what is not offered and that may spell out the circumstances under which the contract may be invalidated (in whole or in part).

Configuration – The interior arrangement of a vehicle, particularly an airplane. The same airplane, for example, may be configured for 190 coach-class passengers, or it may hold 12 first-class passengers and 170 coach passengers, or any other combination within its capacity.

Confirmed reservation – An oral or written statement by a supplier that he has received and will honor a reservation. Oral confirmation have virtually no legal weight. Even written or faxed confirmations have specified or implied limitations. For example, a hotel is usually not obliged to honor a reservation if a guest arrives after 6 p.m., unless late arrival has been guaranteed.

Confluence – A confluence, also known as a conflux, is the meeting point of two flowing bodies of water, such as streams or rivers; the place where they come together.

Conflux – A confluence, also known as a conflux, is the meeting point of two flowing bodies of water, such as streams or rivers; the place where they come together.

Connecting Flight – A flight that makes a stop at an intermediate point where travelers must change planes in order to connect to another flight to reach their destination. (I.e. San Francisco to Chicago and Chicago to New York).

Connecting room – Two rooms that are connected to each other by a door.

Consolidation – Cancellation by a charter tour operator of one more flights associated with a specific charter departure or departure period, with the transfer of passengers to another charter flight or flights to depart on or near the same day. Also, selling the same tour with identical departure dates through a number of wholesalers, cooperatives, or other outlets in order to increase sales and reduce the possibility of tour cancellations.

Consolidator – A wholesaler who purchases airline tickets in bulk and re-sells them to individuals and travel agencies at a discounted rate. These fares tend to have complex restrictions, but can be cheaper than buying direct from the airline. Consolidator fares are found to have the most savings on international flights.

Consortium – A collection of organizations made up of independently owned and managed agencies who band together to increase their buying power.

Consulate – Essentially a satellite office of the embassy, but its roles are limited in scope.

Consul – Head diplomat of the consulate.

Consumer protection plan – A plan offered by a company and/or association that protects the customer’s deposits and payments from loss in the event of company bankruptcy.

Consumer – The actual user of a product or service. See also customer.

Consumption constraints – Issues that limit the number of people in a market who will purchase a product.

Continental breakfast – At a minimum, a beverage (coffee, tea, or milk) and rolls and toast, with fruit juice sometimes included.

Continent – Large landmasses that the world is divided into, by convention, although it is generally-accepted that there are seven.

Contract – A legally enforceable agreement between two or more parties.

Control Tower – Often referred to as simply the tower, the people in the Control Tower oversee aircraft movements at the airport, including ground traffic.

Convenience sample – A collection of research subjects who are the easiest for the researcher to select.

Convention and Visitors Bureau (CVB) – A nonprofit DMO that operates at the county and city level. A CVB typically encourages groups to hold meetings, conventions, and trade shows in its city.

Co-op tour – Selling a tour through a number of wholesalers, cooperatives, or other outlets in order to increase sales and reduce the possibility of tour cancellations.

Cooperative (co-op) advertising – An agreement between two parties to share the cost of placing an advertisement.

Corporate agency – A travel agency that usually caters to medium-large sized businesses.

Corporate Rate – a hotel rate that is designed to appeal to the needs of the business traveler. It is not necessarily a discounted rate or the minimum rate offered by the hotel. Corporate rates normally guarantee the best available room at a fixed cost for a specific period of time, typically outlined in a contract between the hotel and company.

Corporate Travel – Corporate Travel is travel arranged by a business for business purposes. A division or department of a travel agency devoted to such travel.

Costing – The process of itemizing and calculating all the costs the tour operator will pay on a given tour.

Cost-plus pricing – See markup pricing.

Couchette – the sleeping compartment of a train that can contain up to 6 beds.

Coupon – See voucher.

Cruise Tour – A land and sea vacation, which combines a cruise with a multi-night land tour to inland destinations that the ship can’t reach.

Cruise – A cruise is a voyage on a ship or boat taken for pleasure or as a vacation and usually docking at several port destinations.

CST – Central Standard Time.

CTA – Certified Travel Associate.

CTC – Certified Travel Counselor – the ultimate in travel professionals, CTC certification can be compared to the “Master’s Degree “of the industry.

Cuisin e – a style of cooking characterized by distinctive ingredients, techniques and dishes associated with a specific culture or geographic region.

Culinary Tourism – Culinary tourism is defined as the pursuit of unique and memorable eating and drinking experiences. By combining travel with these edible experiences, culinary tourism offers both locals and tourists alike an authentic taste of a specific culture or geographic region.

Cultural Tourism – Cultural tourism is the category or tourism concerned with a country or region’s culture, specifically the lifestyle of the people in those geographical areas, the history of those people, their art, architecture, religion(s), and other elements that helped shape their way of life.

Cultural Travel – This is travel with regard to a region’s culture and history.

Culture – Similar shared traits or characteristics unique to an ethnic group, region, or nation.

Custom tour – A travel package created specifically for a preformed group or niche market.

Customer – The buyer of a product or service. See consumer.

Customized tours – a customized tour is a tour category where an independent travel plan is designed and arranged just for the traveler’s needs, goals and desires. This type of travel includes private airport/hotel transfers, hotels, internal airfare, trains, cruises, performances, events, activities and privately guided tours.

Customs – The common term for U.S. Customs Service, the federal agency charged with collecting duty on specified items imported into the country. The agency also restricts the entry of forbidden items.

CVB – Convention and Visitor’s Bureau (generic term).

Database – A computerized, organized collection of individual customer information.

Day rate – Also called a day room. A reduced rate granted for the use of a guest room during the daytime, not overnight occupancy. Usually provided on a tour when a very late-night departure is scheduled.

Day tour – An escorted or unescorted tour that lasts less than 24 hours and usually departs and returns on the same day. See sightseeing tour.

Deadheading – Making a trip or a segment of a trip without passengers, such as driving an empty motor coach somewhere.

Debark – to get off an airplane or passenger ship.

Deck – the floor area of a ship. Some cruise liners have as many as 11 to 14 decks or more.

Deck plan – the drawing representing the location of the decks, public rooms, cabins, etc. of a cruise ship.

Demand generators – Strategies and programs developed by DMOs and suppliers to generate destination demand. Examples include festivals, events, cultural tours, and consumer promotion.

Demands – A consumer’s wants backed by the ability to purchase.

Demographics – Population measures, such as age, gender, income, education, race/ethnicity, religion, marital status, household size, and occupation.

Denied-boarding compensation – that payment and/or voucher given those bumped from a flight; may be somewhat negotiable – always ask! See “bumping”.

Department of State – the US government agency that, among other things, issues cautions and warnings concerning travel to many points worldwide. Connect to the Department of State for the latest updates for the areas you are interested in.

Departure point – The location or destination from which a tour officially begins.

Departure tax – Fee collected from a traveler by the host country at the time of departure.

Deplane -To disembark, or get off, a plane.

Deposit policy – A specified amount or a percentage of the total bill due on a specified date prior to arrival.

Deposit – An advance payment required to obtain and confirm space.

Descriptive research – a form of marketing research that is used to provide detailed answers about customer markets.

Destination alliance – A DMO that operates as a for-profit association of select suppliers who form a paid-membership network to promote their services to travelers.

Destination management company (DMC) – A for-profit company that operates similar to a CVB by providing planning and execution services for the convention and meeting market.

Destination marketing organization (DMO) – An organization that promotes a location (city, region, state province, country) as a travel destination.

Destination Weddings – a destination wedding a category of travel where couples celebrate their marriage at a destination of their choosing away from home.

Destination – The geographic place to which a traveler is going.

Dine-around-plan – A meal plan, usually prepaid, that allows one to dine at various restaurants in an area.

Direct access – Refers to a travel agent’s ability to get directly into an airlines database to get true last-seat availability and correct pricing – a big difference between internet fare ” quotes ” and an agent’s CRS ( Computer Reservations System ).

Direct Flight – A flight that goes from a traveler’s origin to their final destination with one or more intermediate stops. No change in aircraft occurs. (I.e. San Francisco to New York with a stop in Chicago)

Direct marketing – Sales and marketing communication that feature direct interaction between a company and its customers without any distribution intermediaries.

Disaster Tourism – Travel when tourists go to an area that may be or may have been affected by natural disasters, civil strife, or warfare.

Disclaimer – a legal document that advises clients that a travel agent acts only as a middleman in the sale of travel products; any liability ultimately lies with the supplier, i.e. airline, hotel, car rental company, tour operator, railway, etc.

DMC – Destination Management Company

Docent – A tour guide who works free of charge at a museum.

Domestic fare – a fare charged for travel within a country.

Double booking – a not-nice practice of holding reservations to the same destination for the same times/days, on the same carriers but through different travel agencies, when only one reservation will ultimately be used.

Double Double – A room with two double beds.

Double occupancy – the way in which almost all cruise fares and tour packages are quoted, that is, based on two people traveling together. Most hotel rooms are quoted based on two adults to a room.

Double-occupancy rate – The price per person for a room to be shared with another person; the rate most frequently quoted in tour brochures.

Double-room rate – The full price of a room for two people (twice the double-occupancy rate.)

Downgrade – To move to a lesser level of accommodations or a lower class of service.

Driver guided tours – A driver guided tour is a tour guided by an individual that operates a vehicle while providing commentary in a front-line position who leads participants (individual or groups) on tours, ensures that itineraries are followed, provides commentary in an informative and entertaining manner, and creates positive experiences for tour participants.

Driver-guide – A tour guide who does double duty by driving a vehicle while narrating.

Drop-off charge – the fee added to a car rental when the vehicle is returned to a city other than where it was originally rented. In some states, there is no drop off fee most of the time, such as in Florida.

Duty-free imports – Item amounts and categories specified by a government that are fee of tax or duty charges when brought into the country.

Early Check-In – A perk that allows a guest to check in at an earlier time than the standard check-in time.

Eco/Sustainable Tourism – Eco or Sustainable Tourism is tourism directed toward exotic, often threatened, natural environments, especially to support conservation efforts and observe wildlife.

Eco-Conscious Travel – Though often interchangeable, being “eco-conscious” literally means that one is simply aware of their environmental impact.

Eco-Friendly Travel – Though often interchangeable, being “eco-conscious” literally means that one is simply aware of their environmental impact.

Economic impact study – Research into the dollars generated by an industry and how these dollars impact the economy through direct spending and the indirect impact of additional job creation and the generation of income and tax revenue.

Ecotour – A tour designed to focus on preserving the environment, or to environmentally sensitive areas.

Ecotourism – Tourism directed at exotic and/or endangered destinations while fostering an environmental understanding and conservation.

Educational tour – A tour designed around an educational activity, such as studying art.

Elder hostel – hostel catering to seniors – see “hostel”.

Electronic ticket – a “paperless” airline ticket allowing one to check-in and fly with just proper photo ID. What may look like a ticket is actually just a paper passenger receipt. E-tickets cannot be lost, or used by anyone else, so they are safer than standard paper tickets, which may soon become extinct. One drawback is that e-tickets on one carrier cannot be honored by another, so in a cancelled-flight snafu, the original carrier must print hard copy tickets before another airline can accept them. This presents major paperwork problems for the affected carrier.

Embark – to board a plane or cruise ship.

End suite – in the hotel industry, indicates that a certain feature(s) is directly in the room, or adjacent to that room.

English breakfast – basic meal of cereal, juice, eggs, meats, and other beverages. Common with most hotels in the UK/Great Britain.

Environmental scanning – The process of monitoring important forces in the business environment for trends and changes that may impact a company.

Errors and Omissions Insurance – Insurance coverage equivalent to malpractice insurance, protecting an agent’s or operator’s staff if an act of negligence, an error, or an omission occurs that causes a client great hardship or expense.

Escort – See tour director.

Escorted group tour – A group tour that features a tour director who travels with the group throughout the trip to provide sightseeing commentary and coordinate all group movement and activities.

Escrow accounts – Funds placed in the custody of licensed financial institutions for safekeeping. Many contracts in travel require that agents and tour operators maintain customers’ deposits and prepayments in escrow accounts.

ES T – Eastern Standard Time.

Estimated Time of Arrival – Literally, the estimated time of the transport’s arrival. As opposed to the ATA (Actual Time of Arrival), the ETA is the time that the flight or transport arrives.

Estuary – A body of water connecting a flowing river and a larger body, such as a sea or ocean. Because it is the transition point.

ETA – estimated time of arrival.

ETD – estimated time of departure.

Ethnicity – A term that groups people together with a similar cultural identity; unlike terms such as nationality, ethnicity is more ambiguous.

Ethno-Tourism – Focusing on exploration of indigenous populations and their respective culture and traditions.

E-Ticket – Regarding transportation, especially on airlines, an electronic ticket, or e-ticket, is the digital version of a paper ticket, issued via email.

Eurailpass – a special fare ticket that allows either unlimited train travel, or travel for a certain number of days/weeks, in many European countries (except in Britain, where the Britrailpass offers similar travel in England, Scotland, and Wales).

European pla n – a rate at a hotel that includes no meals.

Exchange order – See voucher.

Exclusive fare – Discounted airfares offered by travel consolidators.

Excursion – a side trip from a main destination, usually at added cost and optional.

Excursion Fare – special airline fares with restrictions such as minimum and maximum stays.

Exotic Travel – Exotic travel refers to a category of travel that is strikingly, excitingly and mysteriously different or unusual. Exotic travel is travel that is completely different than what a traveler is accustomed to and is highly subjective in nature.

Experiential Travel – Experiential travel is also known as immersion travel and is a form of tourism in which people focus on experiencing a country, city or particular place by connecting to its history, people and culture.

Exploratory research – A form of marketing research that’s used to obtain preliminary information and clues. It is most often used when the marketing problem is ambiguous.

Extension – A fully arranged sub-tour offered optionally at extra cost to buyers of a tour or cruise.

Extensions may occur before, during, or after the basic travel program.

FAM (familiarization) tour – A free or reduced-rate trip offered to travel professionals to acquaint them with what a destination, attraction, or supplier has to offer.

Familiarity Tour – A familiarity tour as used in the travel industry it is a tour of a travel destination, travel accommodation, travel activity or travel mode (airline, cruise, ground transportation) to familiarize a travel advisor and provide knowledge and direct experience with the product or service so they can better serve their clients.

Family plan – offered by most hotels, allow children to stay in the same room as parents, at no additional charge. Age requirements vary between hotels.

Family Vacation – a family vacation is a travel category referring to travel involving family members. It is also commonly referred to as multi-generational travel.

Familymoon – A neologism term used to describe a type of honeymoon a newlywed couple can make along with their children from previous relationships.

Fare Aggregator – Fare aggregators’ redirect the users to an airline, cruise, hotel, or car rental site or online travel agent for the final purchase of a ticket. Aggregators’ business models include getting feeds from major OTAs, then displaying to the users all of the results on one screen. The OTA then fulfills the ticket. Aggregators generate revenues through advertising and charging OTAs for referring clients.

Fare Basis – the letters and numbers assigned to a specific fare like an identification number.

Fare basis (code) – The code that determines the price of an airline ticket.

Final Boarding Call – Last call to board before the jet bridge closes and the flight departs, leaving late passengers stranded.

First class – The class which offers the most premium service. Enhanced seating, meal selection, and drink offerings staples of this services.

First Officer – Pilot who is second in command. The pilot in the cockpit sitting on the right with 3 stripes.

Fishing Trips and tours – a fishing trip or fishing tour is a travel tour category where groups of fisherman are provided guided tours and typically lodging with the overall purpose of catching fish.

FIT – foreign independent tour – actually used generically now for a travel package put together by a travel agent from separate components such as car, hotel and airfare, adjusted exactly as the traveler wishes. May include city tours, theater tickets, and other “independent ” options, and may also include custom mapping/routing to accomplish the client’s goals. It now is more commonly used as an acronym for Flexible Independent Travel. It describes a type of travel or tourism that does not incorporate a packaged tour but is nonetheless customized by a travel-selling professional.

Fjord – a narrow inlet from the ocean, usually bounded by cliffs, and with spectacular scenery. Most are located in Alaska, Norway, and New Zealand.

Flight Attendant – Commonly referred to as stewards/stewardesses and air hosts/hostesses, flight attendants are available to ensure the safety and comfort of the passengers of an aircraft.

Flight Crew – Sometimes called the aircrew, the flight crew consists of everyone hired by the airlines on a flight, including pilots, pursers, and flight attendants.

Fly/drive tour – An F.I.T. package that always includes air travel and a rental car and sometimes other travel components.

Fly-drive package – a travel package featuring airfare, rental car, and perhaps hotels. Usually less expensive than booking each separately.

Folio – An itemized record of a guest’s charges and credits which is maintained in the front office until departure. Also referred to as a guest bill or guest statement.

Fore – Directional term. Towards the front of the craft, lengthwise, such as the bow of a ship or the nose of a plane. Opposite of aft.

Frequent Flier Program – A program that a traveler can enroll in that earns them rewards such as free flights on a particular airline for being a loyal customer of that airline.

Frequent Flier – One who flies frequently.

Frequent Independent travel (F.I.T.) – A custom-designed, prepaid travel package with many

Full house – A hotel with all guest rooms occupied.

Full service hotel – a hotel with restaurant facilities.

Function room – A special room that is used primarily for private parties, banquets, and meetings. Also called banquet rooms.

Funnel flight – a flight, such as on a regional or commuter carrier that “feeds “larger planes which continue on to other destinations. Also, the use of a single flight number for an itinerary that really involves a connection with two separate flight numbers, thus making the itinerary appear to be a direct flight with a change of aircraft as opposed to a connection. Just call it a connection and be done with it.

Fuselage – The aircraft’s main body section, the cylindrical, central piece that contains the cabin and holds the crew and cargo.

Galley – The kitchen/kitchenette area of a plane or train or ship. On a plane, the galley may be a small affair with a simple arrangement and a few carts.

Gate-Airport – The specific area in an airport where passengers board a plane for a flight. Gates are located in concourses.

Gateway – City, airport, or area from which a flight or tour departs.

GDS – Global Distribution Systems – A system containing information about availability, prices, and related services for Airlines, Car Companies, Hotel Companies, Rail Companies, etc. and through which reservations can be made and tickets can be issued. A GDS also makes some or all of these functions available to subscribing travel agents, booking engines, and airlines. The GDS leaders are Amadeus, Apollo/Galileo/Worldspan, Sabre.

Geotourism – this is “tourism that sustains or enhances the distinctive geographical character of a place.

Global distribution system (GDS) – An international computer reservation system that accesses many databases of suppliers, airlines, etc. in different countries, such as Sabre.

Graduation travel – graduation travel is a milestone category of travel which refers to travel celebrating a graduation typically from high school or college.

Greenwich Mean Time (GMT) – solar based time in Greenwich, England, fun which time in all other time zones in the world is based.

Gross Registered Tonnage (GRT) – a measurement of the enclosed space in a ship. Cruise ships in the 70,000 ton range are considered “superliners”.

Ground operator – See receptive operator.

Group – several persons, usually 10 or more, traveling together. Group travel is often available at discounted rates.

Group leader – An individual who has been given the responsibility of coordinating tour and travel arrangements for a group. The group leader may act as a liaison to a tour operator or may develop a tour independently (and sometimes serve as the tour director).

Group Rate – A negotiated rate on travel, perhaps a stay or vacation plan, that incentivizes for a large crowd or group that books together.

Group tour – A travel package for an assembly of travelers that has a common itinerary, travel date, and transportation. Group tours are usually prearranged, prepaid, and include transportation, lodging, dining, and attraction admissions. See also escorted group tour.

Group Travel – group travel refers to a category of travel with a group arranged by an outside company or organization or travel with a group of friends and family that you have organized yourself. Some groups are small, private and escorted, while others large.

GST – Goods and Services Tax, such as levied in Canadian Provinces.

Guaranteed share – a cruise term that promises that a companion will be found for a single passenger, at a special rate. That rate will be honored even if the cruise line is unable to find a cabin mate. The rate is usually the going double-rate at that time, and is much less than the single person rate for that cabin.

Guaranteed tour – A tour guaranteed to operate unless canceled before an established cutoff date (usually 60 days prior to departure).

Guest account – See folio.

Guest houses – a guest house is a private house offering accommodations to paying guests.

Guest ranch – a guest ranch, also known as a dude ranch, is a type of ranch oriented towards visitors or tourism. It is considered a form of agritourism.

Guide or guide service – A person or company qualified to conduct tours of specific localities or attractions.

Guided tour – A local sightseeing trip conducted by a guide.

Half pension – a hotel rate that includes breakfast and one other meal, usually dinner. Sometimes called Modified American Plan (MAP) or demi-pension.

Hard-copy – a printed version of a document, such as an airline ticket or hotel voucher.

Head tax – Fee charged for arriving and departing passengers in some foreign countries.

Hidden-city ticketing – another airline no-no; buying a ticket from A to C with a stop in B. The passenger gets off at B, which was the intended destination anyway. The ticket is purchased because the fare from A to C is LESS than A to B.

High season – the time of year when a destination gets the greatest crowds, and thus can increase hotel and rental car rates, etc. As an example, summertime is high season for travel to Europe (just check the airfares!).

High season – See peak season.

Hiking Trips and tours – a hiking trip or hiking tour is a category of travel vacation or getaway where the traveler is walking or hiking as the major mode of transportation.

Honeymoon Travel – Honeymoon travel is a category of travel where a newly married couple travels while celebrating their marriage.

Hosted group tour – A group tour that features a representative (the host) of the tour operator, destination, or other tour provider, who interacts with the group only for a few hours a day to provide information and arrange for transportation. The host usually does not accompany the group as it travels.

Hostel – an inexpensive accommodation, usually dormitory style, popular with the student crowd – thus the term “youth hostel”.

Hotel – a hotel is an establishment providing accommodations, meals, and other services for travelers and tourists.

House – A synonym used for hotel.

Hub – an airport or city in which an airline has a major presence and many flights to other destinations. As an example, Delta has a hub in Atlanta. Many carriers use the hub-and-spoke system to maximize profits by keeping the aircraft in the air as much as possible. Flights to the hub are many, and from there flights too many other destinations are scheduled.

Hub-and-spoke itinerary – A travel routing design that uses a central destination as the departure and return point for day trips to outlying destinations and attractions.

Hurricane season – in the Caribbean primarily, and the Southeastern US, a period from June through October during which such storms are likely to occur.

IATA – International airline industry trade group, headquartered in Montreal, Canada, with executive offices in Geneva, Switzerland.

IATAN – International Airlines Travel Agent Network – administers the IATAN card, the only widely accepted form of legitimate travel agent identification.

In season – meaning only available at certain times of the year.

In transit – en route; in the process of traveling.

Inbound operator – A receptive operator that usually serves groups arriving from another country.

Inbound tour – A tour for groups of travelers whose trip originates in another location, usually another country.

Incentive or incentive commission – See override.

Incentive tour – A trip offered as a prize, particularly to stimulate the productivity of employees or sales agents.

Incentive trave l – travel as a reward for an employee’s outstanding performance.

Incidental Charge – Items and services billed to a room after their use, such as movies, phone calls, etc.

Incidentals – Charges incurred by the participants of a tour, but which are not included in the tour price.

Inclusive tour – a package tour that bundles transportation, accommodations, transfers, sightseeing, possibly some meals, etc.

Inclusive tour – See all-inclusive package.

Independent tour – A travel package in which a tour operator is involved only with the planning, marketing, and selling of the package, but is not involved with the passengers while the tour is in progress.

In-flight Service – Entertainment (movies, television, etc.), meals, beverages and other items made available during a flight for the convenience of the passenger.

Inside cabin – a stateroom aboard ship that has no window. Sometimes smaller, but at times the same size as an outside cabin.

Intercontinental – Having to do with two continents. In travel, transit from one continent to another. Not to be confused with transcontinental.

interline connection – a flight on one airline that connects to a flight on another carrier – these tickets are usually more expensive than flying all on one carrier but may be the only way to get to a destination in some cases.

Intermodal tour – A tour that uses several forms of transportation, such as a plane, motorcoach, cruise ship, and train.

International Air Transport Association – International airline industry trade group, headquartered in Montreal, Canada, with executive offices in Geneva, Switzerland.

International Date Line – at 180 degrees longitude, the date on one side of this imaginary line, running from the north to the South Pole, is different from the other. The line runs through the Pacific Ocean, and because of it, it is possible to leave one destination on one day, and arrive in another the day before

International Rate Desk – Utilizes all available resources to ensure the lowest fare for your selected itinerary, including splitting tickets, consolidator fares, and available discounts.

Involvement device – An element of direct mail that gets the reader involved in the process of evaluating and/or responding to the solicitation.

Itinerary – A list of a tour’s or entire trip’s schedule and major travel elements.

Jet Bridge – An enclosed, movable connector which extends from a terminal gate to a plane, allowing passengers to board and disembark without having to go outside.

Jet lag – an upset of one’s biological clock, due to travel across many time zones; not all folks are affected by it.

Jones Act – a law dating back to 1886, that forbids foreign-flagged ships from carrying passengers between US ports with no foreign port stops in-between.

Judgment sample – A sample based on the researcher’s choice of subjects for a study.

Jump Seat – A flight term referring to an auxiliary (extra) seat for persons who are not operating the aircraft, such as the cabin crew or perhaps a trainee.

Kilometer – a measure of distance used in almost all other countries, at about 5/8 mile.

King room – a hotel room with a king bed.

Knot – a nautical measure of speed equaling approx. 1.5 mph. A ship traveling at 15 knots is traveling at about 22 mph.

Kph – kilometers-per-hour – land speed measurement in most other countries. 60 kph equals approx. 36 miles-per-hour.

Land arrangements – all the details of a land portion of a trip (hotel, car, tours, sightseeing, etc.).

Land Destinations – A land destination or travel destination is a place to which one is journeying, typically for its inherent or exhibited natural or cultural value, historical significance, natural or built beauty, offering leisure, adventure and amusement.

Land operator – See receptive operator.

Land Transfers – travel by train, bus, limo or taxi to and from an accommodation, plane or cruise ship.

Land-only – a rate that does NOT include airfare; usually includes most other land-based charges such as accommodations, transfers, taxes, and perhaps other optional items like theme park tickets, rental care, etc.

Last-seat availability – the ability of a travel agent to get, literally, the ” last seat ” for you on a particular flight, either at a certain fare or actually the last remaining seat on an aircraft. See “direct access”.

Late booking fee – a fee due if travel arrangement are made at the last minute. Normally covers express delivery of documents and other last-minute arrangements that may have to be made by a tour operator.

Late Checkout – A more exclusive perk for some guests that allow a few extra hours to check out from the normal hours.

Latitude – imaginary horizontal lines of angular distance, measured in degrees north or south of the equator.

Layover – a period of time spent during a trip, sometimes overnight, while waiting for a transportation connection – usually a change of planes.

Layover – The period of time spent between connecting flights.

LDW – loss damage waiver – additional insurance pertaining to car rentals, covering theft and vandalism in addition to accident damage.

Lead-in price – the lowest available price for a travel product, often pertaining to cabins on a cruise ship. Usually, there are only a few staterooms available on board each cruise liner in this category, but often better accommodations are only slightly higher in price. Rock-bottom price shoppers normally insist on these rates, though they sell out quickly.

Leeward – the side of a ship or an island that is located opposite from the direction of the prevailing wind -the “Leeward Islands” in the Caribbean for example.

Leg – Portion of a journey between two scheduled stops.

Leisure travel – Usually signifies traveling for relaxation, vacation, or to visit friends/family. Travel for pleasure as opposed to business.

Letter of agreement – A letter from the buyer to the supplier accepting the terms of the proposal. This may also be the supplier’s first proposal that has been initialed by the buyer.

Lido deck – usually the deck on a cruise ship that surrounds the pool area.

Limited service hotel – a hotel property without a restaurant.

List broker – A seller of mail lists for direct marketing.

Load factor – The number of passengers traveling on a vehicle, vessel, or aircraft compared to the number of available seats or cabins.

Locater map – A map of an area or a city, showing locations of attractions and hotels.

Lodging – Any establishment that provides shelter and overnight accommodations to travelers.

Logistics – Management of the details of an operation.

Low season – the period when a destination experiences its lowest prices and the fewest number of guests.

Low season – See off peak.

Lower (bed) – in a cruise stateroom, the bed(s) on the floor as opposed to the higher bunks (uppers), if any. On many ships, two lowers can be arranged to make a king or queen bed.

Lowest available fare – the current, lowest airfare available for purchase right then.

Lowest available fare – The most inexpensive flight currently available.

Lowest fare – the lowest published airfare between two cities; may not have seats available at that fare, as the airlines usually have a limited number of those seats on any given flight.

Luxury class – the most expensive, high-class accommodations or category of fare.

Luxury Cruise – Luxury cruises are the most comfortable and convenient way to see the world. Ships are usually smaller in size so the ratio of crew and staff to guests is generally higher than other cruise ships offering that premium service and attention to detail to be expected of exquisite vacations.

Luxury Ocean Cruise – a luxury ocean cruise is an ocean cruise on a luxury cruise ship or luxury cruise liner or passenger ship used for pleasure voyages, where the voyage itself and the ship’s amenities are a part of the experience, as well as the different destinations along the way.

Luxury River Cruise – a luxury river cruise is a river cruise on a luxury cruise ship or luxury passenger ship used for pleasure voyages, where the voyage itself and the ship’s amenities are a part of the experience, as well as the different destinations along the way.

Luxury travel – while luxury travel is completely subjective to the traveler, it can be loosely defined at travel that constitutes the state of great comfort and extravagant living.

Luxury vacations – a luxury vacation is a vacation that encompasses a state of great comfort and extravagant living.

Macro-environment – The broad forces in society and the business world that impact most companies.

Management Company – A firm that owns several lodging properties.

Manifest – Final official listing of all passengers and/or cargo aboard a transportation vehicle or vessel.

Market demand – The amount of a specific product or service that may be purchased during a certain period of time in a particular geographic area.

Market forecast – The realistic demand within a given time period for the products produced by all companies within a certain industry or product category.

Market – All existing and potential customers for a product or service.

Marketing mix – The 4 Ps of marketing- product, price, promotion, place (distribution).

Marketing plan – A written report that details marketing objectives for a product or service, and recommends strategies for achieving these objectives.

Marketing research – The function that links the consumer, customer, and public to the marketer through the systematic gathering and analyzing of information.

Markup pricing – Pricing a product by adding a standard markup to costs. Also called cost-plus pricing.

Markup – A percentage added to the cost of a product to achieve a selling price.

Master account – The guest account for a particular group or function that will be paid by the sponsoring organization. See folio.

Maximum stay – The longest period of time a traveler can stay at a particular destination and still qualify for the promotion or discounted fare.

Media – Communications channel such as broadcast (radio, TV), print (newspapers, magazines, direct mail), outdoor (billboards), and multimedia (Internet).

Meet-and-greet service – A pre-purchased service for meeting and greeting clients upon arrival in a city, usually at the airport, pier, or rail station, and assisting clients with entrance formalities, collecting baggage, and obtaining transportation.

Meeting/conference tour – A tour designed around a specific meeting or conference for the participants.

Microenvironment – Those forces close to a company that impact operations and marketing programs.

Midships – Directional term. Amidships, sometimes termed midships, is the center of the vessel or aircraft.

Minimum connect time – defined as the minimum time necessary between connecting flights – 30 minutes domestically, usually – ideally, at least an hour. The shortest time required in order to successfully transfer to a connecting flight. It is recommended to select a connecting flight that exceeds the minimum connection time.

Mission statement – The concise description of what an organization is, its purpose, and what it intends to accomplish.

Modified American plan (MAP) – meal plan that includes two daily meals, usually breakfast and dinner.

Motorcoach tour operators – Tour operators that own their own motorcoaches.

Motorcoach Tour – A tour that features the motorcoach as the form of transportation to and from destinations.

Motorcoach – A large, comfortable bus that can transport travelers and their luggage long distances.

MST – Mountain Standard Time.

Multi-day tour – A travel package of two or more days. Most multi-day tours are escorted, all-inclusive packages.

Multigenerational Travel – multigenerational travel is a travel category referring to travel with parents, siblings, kids, grandkids, and assorted family members with the goal to broaden horizons, provide opportunities to reconnect and provide an enriching assortment of shared experiences.

Murder-mystery tour – A tour that features a staged “murder” and involves travelers in solving the crime.

Mystery tour – A journey to unpublicized destinations in which tour takers aren’t told where they will be going until en route or upon arrival.

NACTA – National Association of Career Travel Agents – trade group representing primarily independent and home-based agents, now part of ASTA.

National tourism organization (NTO) – A federal-government-level DMO that promotes country as a travel destination.

Nautical Mile – Unit of length that is about one minute of arc of latitude along any meridian, but is approximately one minute of arc of longitude. Air-Sea distance measurement of approx. 1.1 statute miles.

Negotiated Rate – A discounted rate offered to a company based on the volume of business you agree to provide the selected vendor.

Net fare, net rate – Implies the commission has already been added to the price of the fare.

Net wholesale rate – A rate usually slightly lower than the wholesale rate, applicable to groups of individuals when a hotel is specifically mentioned in a tour brochure. The rate is marked up by wholesale sellers of tours to cover distribution and promotion costs.

Niche market – A highly specialized segment of the travel market, such as an affinity group with a unique special interest.

No show – a passenger who doesn’t show for a flight, hotel, or rental car booking. A guest with confirmed reservations who does not arrive and whose reservation was not canceled.

Non Stop Flight – Do not land in between your departure and arrival destinations. (I.e. San Francisco to New York)

Non-Changeable Ticket – A ticket that cannot be exchanged for a different route or flight once it’s been purchased.

Non-refundable – a fare that cannot be refunded either in cash or via a credit card credit; very seldom is there an exception.

Non-Refundable Ticket – A ticket that cannot be returned for cash or credit once it’s been purchased, but may be changeable for a fee.

Nonstop – A flight that travels directly to its destination without connections or layovers.

Non-transferable – A ticket that can only be used by the person who was originally scheduled to fly at the time of purchase.

NTSB – National Transportation Safety Board; investigates accidents and other incidents related to public transportation.

Objective and task method – A process for creating a promotion budget that sets objectives first, then defines the tasks needed to achieve those objectives, and then commits funds necessary to perform the tasks.

Occupancy rate – the percent of hotel rooms expected to be filled during a specific time period.

Occupancy – The percentage of available rooms occupied for a given period. It is computed by dividing the number of rooms occupied for a period by the number of rooms available for the same period.

Ocean view cabin – a cabin aboard a cruise ship with a window, such as a porthole or picture-window, and perhaps a balcony/verandah.

OCV – ocean view, usually in reference to a hotel room.

Offline connection – a change of aircraft also involving a change of carriers.

Off-peak – A less expensive time to travel as result of lower consumer volume during these periods.

On-site guide – A tour guide who conducts tours of one or several hours’ duration at a specific building, attraction, or site.

Onsite – An on-site is an expert travel provider that lives in the country they serve and has firsthand knowledge and long-standing relationships with all aspect of travel in their country.

Open jaw – a trip in during which there is no travel by air between two cities, such as a flight to Washington DC, then travel by rental car to Charlotte, NC, then a return by air from Charlotte back to the original departure city.

Open return – an air ticket with no return date specified. Rarely done these days, usually quite expensive and not allowed on most discounted fares.

Open-end question – A question that allows the respondent to provide a free-response answer.

Open-jaw itinerary – A travel routing design that departs from one location and returns to another. For example, travelers may fly into one city and depart from another one. Or a traveler may purchase round-trip transportation from the point of origin to one destination, at which another form of transportation is used to reach a second destination, where the traveler resumes the initial form of transportation to return to the point of origin.

Operations – Performing the practical work of operating a tour or travel program.

Operator – a company providing transportation or travel related services (airline, cruise line, railway, hotel, car Rental Company, etc.).

Operator – See Tour Operator.

Option date – drop dead date on which a reservation must be deposited or cancellation will result.

Optionals – Optional tour features that are not included in the base tour price, such as sightseeing excursions or special activities.

OTA – Online travel agencies, examples include Priceline, Expedia and Orbitz

Outbound – the departure leg of a journey.

Outbound operator – A company that takes groups from a given city or country to another city or country.

Outbound tour – A tour that takes travelers out of the area, usually from a domestic city to another country.

Outside cabin – see “ocean view ” cabin.

Outside salesperson – job description of a travel agency employee who sells travel but is not based primarily in the agency location most of the time.

Overbook – Accepting reservations for more space than is available.

Overbooking – the practice of selling more airline seats than are available on a specific flight, to make up for no-shows. Usually backfires on the carrier and at times can create much consumer ill-will. Requires passengers to be “bumped” – not always voluntarily. To some extent, happens in the hotel industry as well.

Overhead – Those fixed costs involved in regular operations, such as rent, insurance, management salaries, and utilities.

Override – A commission over and above the normal base commission percentage.

Packaged travel – A package in combination of two or more types of tour components into a product which is produced, assembled, promoted and sold as a package by a tour operator for an all-inclusive price.

Passenger facility charge (PFC) – a fee for the use of many airports, added in to the cost of an air ticket – another name for an additional tax on travelers.

Passenger name record (PNR) – The official name of one’s reservation in a computer reservation system (CRS).

Passenger vessel – Ships, yachts, ferries, boats, etc.

Passport/visa service – a service that will take your passport and hand carry, if necessary, to the appropriate embassy in order to expedite a visa. Can be expensive if you have waited until the last minute to obtain a travel visa.

Patronage Program – A program that rewards the customer for loyalty and repeat purchase, such as frequent-flyer programs.

Peak season – A destination’s high season when demand is strong. Also called the high season.

Peninsula – A piece of land that is connected to a mainland or larger piece of land on only one side, while the other sides are surrounded by water.

Per Diem – “by the day;” in the cruise industry, the per-day cost of a cruise, per person.

Per-capita costs – Per-person costs.

Per-capita tour – See scheduled tour.

Perceived value – The ratio of perceived benefits to perceived price.

Personal effects coverage – Additional car rental insurance covering loss of personal property from the rented vehicle.

Point-to-point – refers to the fares between two cities; the service between two cities without additional segments or any continuation.

Port – the place where a ship docks; a place visited by cruise ship; the left side of a vessel.

Port charges/taxes – fees levied by local authorities upon the cruise lines for each passenger visiting a port of call, normally added to the total cruise fare.

Port of Debarkation – Port of Debarkation is the geographic point where personnel arrive on a cruise vessel

Port of Embarkation – Port of Embarkation is the geographic point where personnel depart on a cruise vessel

Port of entry – Destination providing customs and immigration services.

Port-Directional – When facing forward, the side of the ship or aircraft that is on the left.

Porter – A person who handles luggage at an airport, train station, etc.; also called skycap or baggage handler.

Porthole – usually a round, sealed window in a shipboard stateroom.

Posada – a small country hotel (Spanish).

Positioning strategy – The development of a clear, unique, and attractive image for a company and/or product in the minds of target customers.

Positive space – space aboard a ship or aircraft that can be confirmed ahead of time.

Post-Cruise Vacation – a post-cruise vacation is a vacation or getaway prior to a cruise in the town or region of the port of debarkation of the cruise.

PPDO – per person, double occupancy. Most tours and cruises are quoted this way; the average cost to stay in a particular location per day.

Pre- and post-trip tour – An optional extension or side trip package before and/or after a meeting, gathering, or convention.

Pre-Cruise Vacation – a vacation or getaway prior to a cruise in the town or region of the port of embarkation of the cruise.

Pre-deduct commission – When a distributor such as a travel agent takes up front the commission on a sale and sends the supplier the balance of the sales price.

Preferred Supplier – The selection of specific supplier(s) for priority promotion to customers and/or integration in travel packages in exchange for reduced rates and/or higher commission.

Preferred Vendor – The vendor(s) a company specifies as their first choice for travelers.

Preformed group – A pre-existing collection of travelers, such as affinity groups and travel clubs, whose members share a common interest or organizational affiliation.

Prepaid ticket advice – a form used when purchasing an air ticket to be picked up and used by someone else at another airport. E-tickets have reduced the need for this greatly.

Primary research – The collection of data specifically to solve the marketing problem at hand.

Prix fixe – meals offered at a fixed price, usually fairly low, consisting of several courses with no substitutions allowed. Common in Europe.

Profit margin – A dollar value that represents the markup of a product’s price over its costs.

Promotion mix – Promotion tools including advertising, direct marketing, sales promotion, and public relations.

Promotional group tour – A travel package composed of tour elements that match the specific needs and wants of niche customers who aren’t part of an organized or preformed group.

Promotional partnership – The combination of two or more companies to offer special incentives to customers.

Prop – referring to propeller-driven aircraft.

Property – A specific lodging structure, such as a hotel, and the ground on which it is built.

Property – A general term that may be used by a place of accommodation that denotes the facility.

Protection overbooking – The practice of blocking space that will likely be in excess of what will actually be needed.

Pseudo-agent – someone claiming to be a travel agent who really isn’t. They often produce bogus ID cards, and can disappear when problems arise!

PST – Pacific Standard Time.

Psychographics – Measures of a person’s lifestyle. See also AIO variables.

Public relations (PR) – A management function that determines the attitudes and opinions of an organization’s publics, identifies its policies with the interests of its publics, and formulates and executes a program of action to earn public understanding and goodwill.

Public tours – See scheduled tour.

Published fare – an airfare that is listed in the carrier’s tariff.

Pull strategy – A marketing approach that creates demand at the customer level by generating awareness, interest, and desire so customers pull a product through a distribution channel by demanding it.

Purser – aboard ship, the person responsible for providing a wide array of services such as information, making change, stamps, etc. Found at the purser’s desk.

Purser-(Airline) – On a flight, the purser is the head flight attendant, responsible for overseeing the attendants and making sure travelers’ needs are met.

Push strategy – A marketing approach that creates demand at the distributor level by providing resellers with an incentive to push (sell) a product to end consumers.

Quad – a room suitable for four persons.

Quay – a pier – pronounced the same as “key”.

Query – The process of sorting and retrieving information from a database.

Quid – a monetary term for a British pound sterling.

Quota sample – A research sample that involves forming groups based on certain characteristics. A random sample can then be selected form the quota segments.

Rack rate – The published (brochure) rate for a travel component. The price of a hotel prior to discount.

Rate desk – the office of an air carrier that calculates fares for passengers and travel agents.

Reach – The measure of how many people in a market will be exposed to a certain advertisement via a specific medium.

Reasonable number – A forecast of the break-even point for a tour.

Rebate (ing) – the practice of returning part of an agency’s commission on a scale back to the client in the form of a rebate or “discount.” The trade-off is usually little or no personal/customer service. This is practiced often by “800 ” number travel sellers and others who deal in huge volume.

Receptive operator – A local tour company that specializes in services for incoming visitors, often for tour operator groups.

Reconfirm – to double-check a reservation.

Record locator – The number assigned to a reservation in the airlines number. This number is unique, as it will never be assigned again.

Record locator – the number assigned to one’s reservation in an airline’s computer system.

Red-eye flight – An overnight flight that leaves at night and arrives early the next morning.

Referral agent/agency – an ” agent ” that refers business to a travel agency in return for a commission or fee – often as part of a card mill operation

Registry – the formal registration of a ship’s ownership, and the country it is registered in (such as Panama, Liberia, Norway, etc.).

Reissue – the generation of a new ticket that is exchanged for another, due to a change of plans, dates, flights, etc. May involve additional fare, penalties and fees.

Relationship marketing – The process of building and nurturing ongoing, solid relationship with customers.

Repositionin g – the moving of a cruise ship to another home port for all of part of a season, such as the repositioning of ships to Alaska for the summer. Often these cruises are excellent bargains, but will involve one-way airfare home from the port of debarkation.

Res – short for “reservation”.

Research constraints – Those issues, such as cost and timing that will limit the scope of marketing research.

Reseller – See retailer and wholesaler.

Reservation fee – A customer payment for a certain percentage of the travel package price that’s made immediately after booking.

Responsible Tourism – Travel that extends beyond being merely environmentally responsible, to being culturally-conscious and economically-aware, locally.

Retail price – The actual price a customer pays for a travel element or tour.

Retail tour – See scheduled tour.

Retailer – A middleman, such as a travel agent, who sells directly to the customer.

Retirement travel – retirement travel is a category of travel referring to when a traveler is has retired from a career and commences to travel. Travel done after retirement age.

Rollaway – a cot or other bedding that can be added to a hotel room to accommodate another guest. There is often an extra charge for this.

Romantic Destinations – romance destination and romance travel is a category of travel that involves travel involving a feeling of excitement and mystery associated with love and often refers to travel associated with a wedding, honeymoon, wedding anniversary, babymoon or another type of romantic getaway.

Room Night – In the hotel (hospitality) industry, a room night, room/night occupancy, is a measure of occupancy where a room is the unit of measure.

Room Occupancy – In the hotel (hospitality) industry, a room night, room/night occupancy, is a measure of occupancy where a room is the unit of measure.

Room rates – The various rates used by lodging properties to price rooms. These include- day rate (usually one half the regular rate for a room used by a guest during the day up to 5 p.m.-sometimes called a use rate), flat rate (a specific room rate for a group agreed upon by the hotel and group in advance), group rate (same as flat rate), net group rate ( a wholesale rate for group business to which an operator may add a markup if desired), net wholesale rate ( a rate usually lower than the group rate and applicable to groups or individuals when a hotel is specifically mentioned in a tour folder), and published rate ( a full rate available to or advertised to the public-also called the rack rate.)

Rooming list – A printout of the names of all tour participants that also lists special lodging requests and provides a spot for the hotel or cruise ship to fill in the passenger’s room number.

Round trip – A flight to a single destination and a return.

Run-of-house (ROH) – refers to a hotel room, the type of which is assigned at the discretion of the hotel shortly before you arrive. Usually, the rates are lower.

Run-of-ship – cabin is assigned at the last moment, giving the cruise line the ability to shift accommodations as needed. Usually, you are guaranteed a minimum category of cabin, and sometimes get an upgraded stateroom at no additional cost. Most upgrades are from inside-to-inside cabins, or from outside-to-outside but occasionally an inside-to-ocean view upgrade will occur. It is not always worth the gamble though.

Run-of-the-house rate – A flat rate for which a lodging property agrees to offer any of its available rooms to a group. Final assignment of the rooms is at the discretion of lodging management.

Sabre® – A computerized travel reservation system.

Safaris – Today the negative hunting connotations of the word ‘safari’ are being rapidly replaced by more modern associations with socially and environmentally responsible travel. Safari travel typically implies that the journey will include game viewing and some time spent in wilderness areas (game reserves and national parks). A traditional is usually focused on seeing wildlife, but safaris are definitely not limited to game viewing. Safaris are now for admiring wildlife and birds in the wild, along with a host of other adventures. Safaris have largely developed into vacation trips that actually benefit the wildlife by supporting local conservation efforts and wildlife sanctuaries. As opposed to hunting the animals, visitors get to encounter them and help make a difference in protecting the species. Safari companies either actively contribute towards conservation projects or help generate tourism revenue which is used to manage wildlife projects and game reserves. The modern safari is also a socially responsible journey designed to interact ethically with local communities and have a positive impact on local economies. The cultural interactions offered by reputable safari operators do not exploit local people. The local communities benefit from sustainable tourism through employment and financial gains from selling goods and services.

Sales margin – A term used by resellers to describe profit as a percentage of sales revenue.

Sample – The portion of a population chosen to represent the population being studied for research.

Saturday night stay – A requirement by the airlines that your travel must involve a Saturday night stay over in order to obtain our lowest fare.

Saturday night stay – In order to receive a specialty fare, a Saturday stay over is sometimes required.

Scandals tour – A light-hearted history tour that shows locations where interesting scandals took place.

Scheduled carrier – An airline that offers regularly scheduled flights between destinations.

Scheduled flights – Air flights that are publicly scheduled and promoted by major airlines.

Scheduled tour – A tour that’s set in a tour operator’s regular schedule of tour departures and that’s often sold to the general public. Also called public tour or retail tour.

Sea bands – a product resembling a bracelet that is worn on the wrists and operates via acupressure.

Wearers claim that seasickness can be avoided by their use, thus eliminating the need for drugs such as Dramamine, etc.

Sea legs – the ability to move around on a ship without losing balance and without sea sickness.

Secondary information – Research data that was collected by another company or person and usually for a purpose that’s different than the research objectives and tasks at hand.

Sectioning system (GPS) – system of satellites that allows miniature radio receivers on earth to pinpoint one’s location within a few feet. Most cruise ships make use of this system to navigate the world’s oceans.

Segment – a “leg” or part of a journey, usually in reference to an air itinerary. One take-off and landing during air travel constitutes a “segment”.

Segment – One leg or portion of a trip. The segment begins when you board the plane and ends when you de-board the plane. (I.e. A connecting flight from San Francisco to New York through Chicago equals 2 segments)

Self-drive – a rental car (British term).

Service non comprise – in French, meaning “service not included”.

Shells – Preprinted brochures with photos, illustrations, and graphics but no text; also called slicks.

Shore excursio n – tours that are purchased as an option when visiting ports of call while on a cruise; can sometimes be bought before you cruise.

Shore excursion – A land tour, usually available at ports of call, sold by cruise lines or tour operators to cruise passengers.

Shoulder season – a period of time between high and low seasons, where prices at a destination are between their highest and lowest, and the crowds are thinner.

Shoulder season – Those periods between the peak and off season when destination demand is moderate.

Sightseeing companies – Organizations that provide local guided tours.

Sightseeing guide – See driver/guide.

Sightseeing tour – Short excursions of usually a few hours that focus on sightseeing and/or attraction visits.

Simple random sample – A sample that draws a group of respondents randomly from all members of the population.

Single Room – A room that is only guaranteed to comfortably accommodate one guest. May also be called a “Standard Room.”

Single Supplement – An additional charge added to a solo traveler, when prices were originally quoted for dual occupancy.

Sleeper – the sleeping compartment aboard a train.

Soft adventure – an outdoor travel experience that is not especially physically demanding, such as a canyon horseback trail ride or a hot-air balloon flight.

Sommelier – A wine professional, usually hired by the most upscale restaurants and establishments, on staff to primarily suggest wine and food pairing to patrons.

Spa – a resort area centered around a mineral springs, hot springs and the like, typically where one can find massage, hydrotherapy, exercise, steam baths, etc.

Special event tour – A travel package that features major happenings, such as concerts or sporting events, as the reason for the journey.

Special fare – Any fare that deviates from normal pricing (typically discounted).

Special interest tour – a tour catering to the needs of a specific interest, such as bird-watching, whale-watching, river rafting, mountain biking, rain forest exploration among many others.

Split itinerary – An itinerary in which part of the group does one thing while the other part does something else.

Split Ticket – Issuing multiple tickets for one round-trip journey. This is done to reduce the total cost of the entire reservation.

Sports Tourism – sports tourism refers to travel which involves either observing or participating in a sporting event staying apart from their usual environment.

Stabilizer – a device on most all cruise vessels, to reduce pitch and roll when at sea – the movement that can cause seasickness. Stabilizers are often pulled in at night in order to allow faster speeds when traveling between ports of call.

Standby – Referring to a passenger who does not have a confirmed seat on the intended flight.

Star Service – a critical guide describing in detail many hotel and cruise ship properties. Can be subjective, as it is based on someone’s opinion, but provides a travel agent with a non-commercial point-of-view.

Starboard – the right side of a ship.

Stateroom – A private cabin or compartment with sleeping accommodations on a ship or train.

Step-on guide – A tour guide who boards a motorcoach to give detailed, expert commentary about the city or area being visited.

Stern – the rear of a ship.

Stopover – a planned stayover in a city for a day or more, while enrooted to another destination. Sometimes adds significantly to the cost of an air ticket.

Strategic plan – A report that describes a company’s mission statement, goals, objectives and strategic actions.

Student visa – permission to enter a country, issued to a student, normally for the purpose of attending school in that country.

Subcontractor – A local operator who provides services for a wholesaler.

Suite – a hotel accommodation with more than one room, or sometimes a single room with distinct sleeping and living areas and often a kitchenette. A suite in a hotel or other public accommodation denotes a class of accommodations with more space and amenities than a typical accommodation room. Luxury or upscale accommodations often have a scaled range of suites progressively increasing in size, luxury and amenities starting with a junior suite and culminating in the largest and most luxurious suite which is often called a presidential or royal suite.

Supplier – any company that supplies travel and/or related services to the traveling public. The actual producer and seller of travel components.

Surface – travel over land that does not involve an aircraft.

SWOT analysis – A summary of a company’s strengths and weaknesses, and the environmental opportunities and threats that will most influence it.

T&E – Travel and Entertainment expenses.

Target market – The group of customers who will be the focus of a company’s marketing efforts.

Tariff – a schedule of prices/fares.

Telemarketing – Direct marketing via the telephone.

Tender – a small boat or ferry that carries passengers from an anchored cruise ship to the pier at a port of call. Many ships are too large for existing port facilities at some destinations, and so they anchor just off shore and “tender “their passengers in for their visit.

Terminal – A building where clients report for trips via train, plane, etc.; also called a depot or a station.

TGV – the term applied to the French high-speed train system.

Theme cruise – a cruise devoted to a specific interest, such as big bands, country western, Star Trek, exercise and weight-loss, cooking and cuisine, and many more. There is usually a theme cruise to suit just about any interest.

Theme tour – A tour that’s designed around a concept of specific interest to the tour takers, such as history or sports.

Through passenger – a passenger who is not disembarking at a particular stop while enrooted to the final destination.

Ticket stock – Blank airline tickets.

Tickler system – A method for monitoring reservations and payments that’s arranged by date and points out late payments so customers can be contacted.

Tiered override pla n – When commissions rise proportionately with a corresponding increase in sales.

Tiered pricing – When suppliers offer different prices to receptive operators, tour operators, and group leaders, so each party can earn a profit by marking up the supplier’s price while still offering a fair price to customers.

Tour broker – See tour operator.

Tour catalog – A publication by tour wholesalers listing their tour offerings. Catalogs are distributed to retail agents who make them available to their customers. Bookings by retail agents are commissionable.

Tour Company – A tour company or tour operator typically combines tour and travel components to create a packaged vacation. They advertise and produce brochures to promote their products, vacation and itineraries.

Tour conductor – the person who accompanies and is in charge of a tour, often on a motor coach tour. See tour director.

Tour departure – The date of the start by any individual or group of a tour program or, by extension, the entire operation of that single tour.

Tour director – Also called tour manager, tour conductor, and tour escort. The person who is responsible for a group on tour and for most aspects of a tour’s execution.

Tour escort – See tour director.

Tour guide – A person qualified (and often certified) to conduct tours of specific locations or attractions.

See also step-on guide, city guide, on-site guide, and docent.

Tour manager – See tour director.

Tour manual – A compendium of facts about a destination, tour procedures, forms, and other information that a tour operator gives to its tour directors.

Tour menu – A menu that limits group clients to two or three choices.

Tour operator – A person or company that contracts with suppliers to create and/or market a tour and/or subcontract their performance.

Tour order – A voucher given to the purchaser of a tour package that identifies the tour, the seller, and the fact that the tour is prepaid. The purchaser then uses this form as proof of payment and receives vouchers for meals, porterage, transfers, entrance fees, and other expenses. See also voucher.

Tour planner – A person who researches destinations and suppliers, negotiates contracts, and creates itineraries for travel packages.

Tour rate – See group rate.

Tour series – Multiple departures to the same destination throughout the year.

Tour – A prearranged, prepaid journey to one or more destinations that generally returns to the point of origin, is usually arranged with an itinerary of leisure activities, and includes at least two travel elements.

Tourism – The business of providing marketing services and facilities for leisure travelers.

Tourist card – a card issued to a visitor in lieu of a visa, usually for a short duration visit.

Tourist – This is the majority of adult travelers, when not vacationing. Tourists may be couples, families, or just a person or two who visit locations.

Tours – a tour is a journey for pleasure which includes the visiting of a number of places in sequence, especially with an organized group often led by a guide.

Tracking study – A survey of customers before and after implementing a promotion campaign to assess changes in consumer behavior.

Trans-canal – passing through the Panama Canal.

Transcon – Having to do with crossing a continent. For example, travel of this sort would be from one end of a continent to another.

Transcontinental – Having to do with crossing a continent. For example, travel of this sort would be from one end of a continent to another.

Transfer – Local transportation and porterage from one carrier terminal to another, from a terminal to a hotel, or from a hotel to an attraction.

Transient Occupancy Tax – Also known as a Bed Tax, it is a City or County tax added to the price of the room.

Transient – A person who stays in a place for just a short while; not a permanent resident, such as a visitor or tourist.

Transit visa – A visa allowing the holder to stop over in a country or make a travel connection or a brief visit.

Transportation – Any method of moving travelers from one point in a journey to another, such as air, ship, rail, and motor coach travel.

Travel advisor – a travel advisor simplifies the time-consuming and complicated process of planning travel for their customers in addition to providing consultation services and entire travel packages. They may book flights, cruises, rental cars and hotels, as well as resort stays and events. Agents cater to a wide demographic, serving both individuals and corporations. They may also concentrate in a special segment of travel; many advisors specialize in leisure, business or group travel, or destination-specific journeys.

Travel advisory – a travel warning issued by the US Department of State, indicating a special caution should be taken in a country due to political unrest, natural disaster, or other special situation. These can be obtained from any good travel agent, on any area you are considering visiting.

Travel agency – Usually used in the travel industry to refer to an ARC-appointed storefront retailer.

Travel agent – A person or firm qualified to arrange for lodging, meals, transportation, cruises, tours, and other travel elements, typically on a commission basis. A travel agent simplifies the time-consuming and complicated process of planning travel for their customers in addition to providing consultation services and entire travel packages. They may book flights, cruises, rental cars and hotels, as well as resort stays and events. Agents cater to a wide demographic, serving both individuals and corporations. They may also concentrate in a special segment of travel; many agents specialize in leisure, business or group travel, or destination-specific journeys.

Travel component – Transportation, lodging, dining, attractions, entertainment, guide services, and other travel elements offered as part of a travel package.

Travel Destination – a place to which one is journeying.

Travel Experience – A travel experience or experiential travel (also known as immersion travel) as it is commonly referred to, is a form of tourism in which people focus on experiencing a country, city or particular place by connecting to its history, people and culture.

Travel Institute – the primary educational and certification arm of the travel industry. Was formerly the “Institute of Certified Travel Agents” (ICTA), located in Wellesley, Mass.

Travel Insurance – Travel insurance is insurance that is intended to cover medical expenses, trip cancellation, lost luggage, flight accident and other losses incurred while traveling, either internationally or within one’s own country.

Travel Itinerary – a travel itinerary is a travel plan or organization of your travel and involves all of the details, times and dates concerning things like airline, cruises and train transportation confirmations, hotel, villa and accommodation reservations, rental car information, restaurant reservations and much more.

Travel Policy – A fluid internal document, pertinent to the company’s culture that outlines the guidelines for business travel and expenses within a company.

Travel rewards – Travel reward programs are often referred to as a loyalty rewards program, and they are generally a campaign devised to generate repeat customers for a particular company by offering a point gratification system for the customers’ business. They are also meant to provide customers with a “thank you” for their loyalty to a company’s product or service. That benefit is typically some sort of discount on certain items or services. Travel specialist – a travel specialist is a travel agent or travel advisor that concentrates in a special segment of travel; many travel agents or travel advisors specialize in leisure, group or business travel, or destination specific travel.

Travel Tours – a travel tour is a journey for pleasure which includes the visiting of a number of places in sequence, especially with an organized group often led by a guide.

Traveler – One who travels.

Travelogues – Many travel websites are online travelogues or travel journals, usually created by individual travelers and hosted by companies that generally provide their information to consumers for free. These companies generate revenue through advertising or by providing services to other businesses. This medium produces a wide variety of styles, often incorporating graphics, photography, maps, and other unique content.

Trip director – An escort for an incentive company. Larger companies reserve this title for the person who directs all personnel and activities for a particular incentive trip.

Trundle Bed – Bed that stores itself under another bed, usually on casters. Often found in smaller hotel rooms or in cramped transport accommodations.

Turn – Airline parlance. A flight that leaves base and returns back to base in the same day. Also known as a turnaround.

Turnaway – A potential reservation that couldn’t be satisfied because the tour (or hotel, ship, etc.) was fully booked.

Twenty-four hour time – used extensively in Europe and other countries, 1pm becomes 1300 hours, 4pm is 1500 hours, etc., up to 2359 ( 1159pm ). Midnight is then considered 2400 or “zero ” hours. 1-20am is then 0120 or “one hour, twenty minutes “and so on. Most schedules and timetables in the majority of other countries are listed in the 24-hour format.

UNESCO World Heritage Sites – a UNESCO World Heritage Site is a place (such as a building, city, complex, desert, forest, island, lake, monument, or mountain) that is listed by the United Nations Educational, Scientific and Cultural Organization (UNESCO) as being of special cultural or physical significance.

Unlimited mileage – No mileage restriction when renting a car.

Unrestricted fare – an airfare that has no special advance purchase, Saturday stay or certain days to travel requirements, and is usually refundable. Many full coach and most first-class fares are unrestricted. An airfare with no limitations. It is typically refundable and has no blackout days.

Upgrade – To move to a better accommodation or class of service.

USTOA – United States Tour Operators Association – a trade association which requires its members to be very financially stable and to have a million dollars or more in funds set aside for consumer protection against defaults. Visit www.ustoa.com for more information.

Value added tax (VAT) – a tax on goods in Europe, which under certain circumstances can be refunded.

Value season – similar to shoulder or low season, when pricing is lower. See off season.

Value – The relationship between the benefits associated with a product or service and the costs of obtaining the product or service. See also perceived value.

Value-added tax (VAT) – A type of tax system which adds a fixed percentage of taxation on products and services at each step of production or service delivery.

Value-based pricing – Pricing a product based on buyer perceptions of value rather than actual product costs.

Variable costs – Costs that change with sales or production levels.

Variance report – A summary of how much a company has gone above or below budget.

Verandah – a roofed-porch, such as connected to a cruise ship stateroom.

VIA rail – the Canadian railway system.

Villas – a large and luxurious country residence. A villa is a fancy vacation home. The word has been around ever since ancient Roman times to mean “country house for the elite.” In Italian, villa means “country house or farm.” Most villas include a large amount of land and often barns, garages, or other outbuildings as well.

VIP experiences – a VIP Experience is the most exclusive way to go behind the scenes or experience a travel destination, accommodation or mode of transportation.

Visa – usually a stamp in a passport allowing entry into a country for a specific purpose and a finite amount of time.

Visa service – a service that can expedite the processing of a visa, sometimes even at the last minute. A fee is charged that varies, depending on the nature of the service needed. Visas are usually stamped into the pages of a valid passport and are issued for varying reasons and periods of time. Not all countries require them, especially for United States Citizens.

Volume incentive – See override.

Volume purchase – The purchase of large quantities of a product or service.

Voucher – Documents that are exchanged for goods and service to substantiate payment that will be or already has been made.

Voyage – a voyage is a long journey involving travel by sea or in space.

Waitlist – A list of clients awaiting transportation or accommodations at times when they are not available. Waitlisted clients are confirmed as a result of subsequent cancellations.

Waiver – a written acknowledgement that a passenger has declined something, such as insurance coverage for a trip, for example. Also, the formal acknowledgement of the waiving or dismissal of a requirement, such as a waiver of a penalty for late booking, etc.

Waiver – A written acknowledgement that a passenger has declined something.

Walk-up – one who purchases an air ticket at the last moment, usually at the airport ticket counter.

Wants – Ways in which a person satisfies a basic need.

Wellness Travel – wellness travel is a category of travel for the purpose of promoting health and well-being through physical, psychological, or spiritual activities

Wet bar – the area of a hotel room that has a bar or other counter space with running water, used for the preparation of drinks.

Wholesale – Sale of travel products through an intermediary in exchange for a commission or fee generally at reduced tariffs.

Word-of-mouth promotion – Personal communication about a product or service from one customer to another.

World Travel Guide – a yearly publication that provides detailed information on most every country in the world, with entries on currency, transportation, climate, visa and passport requirements, sightseeing opportunities, etc. A primary book of knowledge for the professional travel agent.

Yield management – Calculating and analyzing the profits earned per customer.

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Travel Agency Commissions - Who Pays Them?

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How to Make an Override Commission From Other People's Sales

by John Csiszar

Published on 26 Sep 2017

A commission is a fee paid to a sales representative for selling a company's products. For example, if you work on commission in a retail clothing store, your employer will pay you a percentage of each sale you make. An override commission is a commission that a sales representative earns when another employee makes a sale. Typically, employees such as managers earn override commissions when sales reps that they manage make their own sales. Companies use override commissions to motivate sales managers or other employees to generate sales from other representatives.

Enter the right industry. Most employees earn salaries or wages from an employer, not commissions. Typically, only salespeople earn commissions, with the amount of the commission based on the amount of generated sales. While some industries, such as retail clothing, often pay a base salary plus a sales commission, others, such as the financial services industry, often pay only 100 percent commission to salespeople. Before you can earn an override on another person's sales, you must find an industry that pays that type of commission.

Become a manager. Most sales managers start out as retail salespeople before moving on to management. If you learn the business and prove that you can generate sales, your employer may eventually offer you a management position, in which you are in charge of generating sales from a group of salespeople.

Ramp up sales. To get an override commission, you must motivate your sales team to generate their own commissions. The more strategies you can devise to increase sales, the greater the chance you have to earn override commissions. As a sales manager, your employer will probably provide you with some leeway regarding your motivational strategies, so you may be able to pay a small base salary to your sales force or devise some type of incentive plan to motivate them to sell more. As an experienced salesperson who has "been in the trenches" and can relate to the day-to-day experience of the average salesperson, you should be in a good position to be able to motivate your sales staff to higher sales figures. Some employers may only pay you an override commission if you increase sales over a certain base level.

A flurry of new rules from the Biden administration attempt to ban noncompetes, boost overtime pay, and increase refunds for delayed flights

The Biden administration issued new rules designed to boost workers' wages and business competition.
They aim to raise an overtime threshold, ban noncompetes, and offer refunds for flight delays.
The rules, already facing legal challenges, could reshape labor-market dynamics and consumer rights.

The Biden administration this week pushed out a slate of rules it says are meant to boost competitiveness and put more money into workers' pockets.

There are already challenges to at least one of the rules — but together they could land overtime pay for millions more workers, ban noncompetes that prevent workers from moving into jobs in similar industries, and help people get automatic refunds for delayed or canceled flights.

"By increasing competition, these rules give workers their fairly earned wages and gives consumers more power to purchase the best option," Lael Brainard, the director of the National Economic Council, told Business Insider.

More workers eligible for overtime pay

Under the Department of Labor's new rule , many workers who make under $43,888 will be eligible for overtime pay effective July 1. That's nearly $10,000 higher than the existing threshold of $35,568; next January it's set to rise to $58,656.

The department estimates the change will affect 4 million workers.

Judy Conti, the government affairs director at the National Employment Law Project, previously told BI that "the current salary threshold beneath which all workers are entitled to overtime is pitifully low."

In 2016, a federal judge blocked a similar attempt to raise the cutoff.

Automatic refunds for canceled or delayed flights

The Department of Transportation announced a new rule that would mean travelers get refunds automatically when their flights are canceled or delayed for over three hours domestically and six hours internationally.

The department also said it was looking to ensure that parents are able to sit with their children without having to pay extra.

A ban on noncompetes that keep workers from taking new jobs

Perhaps the most sweeping action for workers came from the Federal Trade Commission, which finalized a rule to ban noncompetes in most cases. That means workers would no longer be restricted from taking roles in similar industries or starting up new businesses in the same field.

"For workers and employers, it tilts that playing field back more in favor of workers," Brainard said.

The agency estimates the new rule will lead to 8,500 more new businesses every year — a 2.7% increase in business formation — and an average of $524 extra annually for workers. That's not chump change for many Americans, especially those with lower wages who have ended up stifled in finding new work .

"These new regulations will promote healthier labor-market competition," Aaron Sojourner, a senior researcher at the W.E. Upjohn Institute for Employment Research, told BI. "One in five American employees will benefit from the new freedom to accept job offers from any competing employer rather than live bound to their current employer, unable to work for many employers who value their skills and time more."

That rule is already getting pushback from businesses and business interests. Ryan, a company that provides tax services and software, said it filed a lawsuit against the FTC, accusing it of taking "lawless action."

"With history, logic, law, and the Constitution on our side, we look forward to righting this wrong by the FTC against employees and employers alike," John Smith, Ryan's chief legal officer and general counsel, said in a press release.

The US Chamber of Commerce, the Business Roundtable, and the Texas Association of Business have also sued to block the rule .

"The Federal Trade Commission's decision to ban employer noncompete agreements across the economy is not only unlawful but also a blatant power grab that will undermine American businesses' ability to remain competitive," Suzanne Clark, the president and CEO of the Chamber of Commerce, said in a statement.

Jeremy Merkelson, a partner at the law firm Davis Wright Tremaine, speculated that the groups challenging the rule were likely to succeed. Merkelson said that while a Supreme Court majority would "likely reject that such a broad concept gives the FTC specific authority to upend millions of worker contracts," a court might let the ban on noncompetes survive for lower-level workers while invalidating the rule for senior executives.

Brainard argued that "a lot of Republicans and some of the businesses and special interests that they're supporting will try to challenge these actions because it means that they have to pass on savings to consumers," adding, "They have to lower prices; they have to give working families a break."

Elizabeth Wilkins, the former chief of staff to the chair and director of the Office of Policy and Planning at the FTC, described noncompetes as "fundamentally at odds" with the American promise of being able to find opportunities that fit workers' skills and talents. Zooming out, she said, the ban might make a labor market with less friction, where workers can match with employers that make sense for them, boosting productivity.

"To me," Wilkins said, "this rule represents the absolute best of government working for people."

Will a ban on noncompetes, new overtime thresholds, or airline refunds affect your life? Contact this reporter at [email protected] .

Watch: Why flying is so terrible even though airlines spend billions

Main content

IMAGES

Travel Technology for Dummies: What Are Incentives, Commission
Apa Itu Override Commission Dan Cara Menetapkannya
Explaining Travel Agent Commissions [Infographic + Charts] (2022)
Overriding commission in consignment
Apa Itu Direct Override Commission Dan Cara Menetapkannya
Commission (Quota and Override)

VIDEO

Override
Safety System Bypass/ Override of UV/IR Detector Systems

COMMENTS

What is Overriding Commission & How to Calculate it
What is the override commission in travel industry? In the travel industry, override commission refers to the additional commission earned by travel agencies or agents based on the sales performance of their sub-agents or the travel consultants they manage.
Travel Technology for Dummies: What Are Incentives, Commission
An agency makes 240 bookings a year. 40 bookings of this agency are made with airline A - all others are made with any airline bookable in a GDS. The agency has two GDS contracts (A & B) and gets the following commission and overrides: $1 for each booking in GDS A. $1.10 for each booking in GDS A if the agency makes equal to or more than 100 ...
Explaining Travel Agent Commissions [Infographic + Charts]
Airlines offer travel agent commissions through two routes: 1. AIRline Consolidators: These are airline wholesalers. They specialize in air and have private contracts with the airlines. Travel agents can make money with these airline consolidators in one of two ways: commission and marking up net rates.
How Do Travel Agencies Make Money? Revenue Models, Fees, And Ancillary
Furthermore, override commissions can foster healthy competition within the team, driving individual and collective performance. Related: How Much Does Course Hero Cost? Pricing Plans And Fees Explained. To summarize, the commission-based revenue model in the travel industry offers various options for travel agencies and agents to earn income.
What is a commission override?
A commission override is an additional sales commission or bonus given to managers based on the sales performance of their team. It serves as an incentive for managers to motivate and lead their team effectively, as they receive a percentage of the total sales made by their subordinates. This practice aligns the interests of sales managers with ...
The Travel Agency Perspective of Revenue Management
This chapter discusses revenue management tools required for online and offline travel agencies to generate incremental revenues based on their negotiated contracts with travel suppliers. The display and ranking of hotels, opaque hotels, packages, and air itineraries to maximize conversion rates are reviewed. Air override commissions (back-end ...
Will Commission Cuts Kill the Small Travel Agent?
Override commissions are kickbacks from airlines to travel agents for steering plenty of business to one preferred supplier. There's no requirement for travel agents to disclose preferred ...
The override argument: Travel Weekly
The override argument. Q: A recent article in the Business Travel Update section of Travel Weekly quoted a corporate travel manager at the National Business Travel Association annual meeting as ...
Agency Revenue Management
Revenue management for travel agencies is rarely discussed at industry conferences and public forums. This chapter provides a brief overview of the types of problems that are addressed to support the travel agency community. ... Airlines negotiate override commissions with travel agents. These are performance-based contracts where the agency ...
PRACTICAL TRAVELER; Airline Rebates for Agents: The How and the Why
IN the travel business, override is a buzzword that behaves like a four-letter word. If a newspaper says that a travel agent receives override commissions, meaning bonuses above 10 percent for an ...
Sales Commission
Override Commissions - There are two possible meanings for "override". The first definition of override commission is commission received by managers based on some type of rollup (ex: team rollup, territory rollup). Example: "VPs will receive a 0.5% override commission on all sales within their territories".
Define Override, Override Commission
override, override commission. An additional commission percentage paid when a certain volume level is achieved. To find the abbreviation, acronym, or term you're looking for, use the Search box (below) or click on any letter (above). A definition of override or override commission as used in the travel industry.
What commission does a travel agent make?
Travel agent commissions are a critical aspect of the travel industry and significantly impact the revenue and operations of travel agencies, tour operators and other industry stakeholders. ... Commission override: Travel agents earn a higher commission rate when they reach a certain sales threshold. For example, an agent may earn a 10% ...
How much commission should you pay for distribution?
Here are the general guidelines for commission rates throughout the industry. 1. Travel agents - 10% - 20% of retail price. Nowadays, ... Override commission is the extra commission you give to certain distributors to incentivize them to promote your tours over your competitors. Of course this commission is completely up to you, and you're free ...
How do most travel agents get paid?
While travel agents can earn commission on a wide range of bookings, not all travel products offer commission. For example, certain low-cost airlines or online travel agencies may not provide commission to travel agents. In such cases, travel agents might charge a service fee to compensate for their time and effort. 5. What is override commission?
Travel Terms Glossary
Override - A commission over and above the normal base commission percentage. Packaged travel - A package in combination of two or more types of tour components into a product which is produced, assembled, promoted and sold as a package by a tour operator for an all-inclusive price.
Leading Hotels sets 5% commission override
NEW YORK -- The Leading Hotels of the World will pay agents an extra 5% in override commission when they book suites at 180 participating member properties worldwide from Oct. 1 to Jan. 31, for ...
Tourism Glossary
In the travel industry, travel agents receive commissions for selling tour packages or other services. common carrier: a privately owned carrier which offers transportation for a fee ... override: a commission over and above the normal base commission percentage pacing: ...
Travel Agency Commissions
BY Vimanav - Sat Dec 13, 2003 12:33 am. Commissions are still very much paid by airlines to travel agent for tickets sold on their services. Commissions are of different types and are commonly guided by IATA regulations on these. The commission rates vary between 5 - 9%. Commission on domestic tickets may be lower than international rates which ...
How to Make an Override Commission From Other People's Sales
A commission is a fee paid to a sales representative for selling a company's products. For example, if you work on commission in a retail clothing store, your employer will pay you a percentage of each sale you make. An override commission is a commission that a sales representative earns when another employee makes a sale.
Home Based Travel Agent Expect Income
Industry resources show relatively low incomes for agents at an average of around $37,000 per year and this is because many home based travel agents only work part time and do not have the expectation of generating large incomes. Many are retired from other careers and have pensions and investments they depend on and enjoy the benefits of being ...
Chargebacks: an overview for the travel industry
One of the advantages of paying for travel services by card is that the cardholder is able to reverse a transaction if the travel services are not provided. This is commonly referred to as a ...
Overriding Commission Meaning & Definition
Overriding Commission is a term that may refer to a commission on sales, or a commission on the sales of another agent or broker. In insurance, it is a commission paid to an agent or broker for bringing in a customer or lead, or for placing a policy with a particular company.
New Biden Rules on Noncompetes, Overtime, Airline Refunds
The department estimates the change will affect 4 million workers.. Judy Conti, the government affairs director at the National Employment Law Project, previously told BI that "the current salary ...
Net neutrality is back as FCC votes to regulate internet providers
A demonstrator opposed to the roll back of net neutrality rules holds a sign outside the Federal Communications Commission (FCC) headquarters ahead of a open commission meeting in Washington, D.C ...