Travel hack: I became a travel agent
Alright, this might sound like a shameless plug, but it’s also a bit of an FYI on how else I’ve been spending my time after I quit my job and a pretty good “hack” if you also are going to be traveling for an extended amount of time: becoming a travel agent.
I signed up to be a travel agent with Fora Travel after my friend recommended it (and gave me a referral discount on their membership fee). The main takeaway is only do this if you’re going to be traveling A LOT yourself or you plan on actually building out “a book of business” with friends/ family/ strangers. Scroll down on how much is A LOT: I do some math on what the hurdle actually is (it’s pretty high). Here are some quick things to know and facts I’ve learned throughout this time.
If you know your hotel/cruise/VRBO/car rental and dates, shoot me an email at alice.zhao@fora.travel or contact me through my page. I'll see if I can get you a better deal or better perks for the same price at no cost to you and no obligation to book through me either!
What is a travel agent?
A travel agent is like your personal travel concierge, someone who historically has taken care of all the nitty-gritty details of planning a trip so you don’t have to. They can find the best flights, accommodations and experiences to match your preferences and your budget.
Plus a lot of travel agents (myself included) can get you access to insider perks like room upgrades, hotel credit for spa/ dining and late checkouts because we have memberships to VIP hotel programs. Sometimes, these VIP hotel programs are exclusively available through travel agent memberships. Other times, they offer the same perks that come with the highest levels of individual hotel status, allowing you to enjoy those benefits without having to spend the whole year earning that status yourself.
How much does booking with a travel agent cost?
Usually free if it’s a straightforward booking: you know your hotel, car, cruise etc information already and want to get the additional perks via the travel agent. There isn’t much research time for the travel agent and the payment is the commission from the property because you’re “bringing the hotel your business”.
If you want them to do full on planning, that’ll normally incur a “planning fee” since it’s more time intensive versus a straightforward property/ car rental/ cruise booking.
In either case, you, the client, generally pay the same price as you see on the hotel website but with valuable perks included. I’ve seen hotel stays are come with the perks that are even cheaper than the direct website booking. I’ve also seen hotel stays that are a little bit more expensive but come with a $100 hotel credit or something like that. Almost always, it’s net net more beneficial to book through a travel agent at no cost to you.
This seems fake. How do the economics work?
The commission is coming out of the “marketing budget” instead of spending it on third-party platforms like Expedia or Hotels.com or traditional advertising costs. Also, clients that booked through travel agents have historically been less likely to cancel stays versus if they booked through Expedia or Hotels.com, more respectful of the property, and on average, spend more on the property.
Why is this better than Amex Travel or other OTAs (online travel agencies)?
Upgrades and customer service. Each hotel has an upgrade priority system and reservations made via travel advisors are always at the top fo the list for consideration and these are even above Amex and OTAs (Expedia or Orbitz). Technically if you’re booking via Amex, you’re booking via the “Amex travel agency” so Amex is getting the commission but that travel agency is a less supportive one since they only share the client name and payment. They don’t physically email the hotel reservations system and pull special strings or make special requests like we do :)
What are some of the special programs and perks?
I’m not going to list all of the perks for each hotel program but here are some of the hotel programs I have access to and example perks:
Virtuoso is a fancy hotel/cruise/tour operator program and network. You can get preferred rates and benefits. The standard Virtuoso benefits include:
Daily complimentary breakfast for two
Extended check-in/out hours
Complimentary room upgrades (when available)
Property credits (e.g. spa, food/beverage, shopping)
The Four Seasons Preferred Partner program is nice because they don’t have your normal loyalty program. You’ll be on the top priority of any waitlist situations and a strict no walk policy (meaning if the hotel oversold, you won’t be sent off to another hotel). Four Seasons Preferred Partner reservations will also typically include the following:
Daily full American breakfast for two people per bedroom, served through In-Room Dining or in the hotel restaurant (including buffets)
Spa OR food/beverage credit of USD100 once during stay (whether it’s a spa or F&B offering varies by property)
Upgrade of one category, based on availability at time of check-in (excluding signature suites, villas, and private residences)
Complimentary basic Internet in all guest rooms; complimentary premium Internet in all suites
Some other programs are below and more or less they’re all a variation on early/late checkout, first in line upgrades, some spa/dining credit, welcome amenity. As a personal Marriott loyalist, I’ve generally found Marriott Stars/Luminous rates to be slightly higher than the cheapest Marriott option but you still come out on top after you net the $100 spa/dining credit from the rate.
Hyatt Prive
Marriott Stars
Marriott Luminous
Hilton Impresario
Relais & Chateaux Preferred Program
Rosewood Elite
Shangri-La Luxury Circle
Small Luxury Hotels
How do you get started? What is this Fora thing?
Fora has made it super easy to get up and running …but obviously with a (membership) cost. Historically to become an independent travel agent, you would have to get all of this logistical stuff set up, billing, data feeds for hotel pricing, get “licensed” via an IATA number, etc but Fora takes care of it for you as a startup.
Think of being a travel agent with Fora as being like an Uber driver. You’re driving your own car (in this case, booking trips yourself for clients), but Fora handles everything else, like billing and tech. Uber takes a cut of the fare price, and Fora takes a 30% cut out of your commission. When I got started, I had to take some trainings but it was pretty fast to book my first stay.
The math breakdown
I’m assuming you get the referral discount (here use mine), the commission rate is 10%*, you do the annual billing plan versus monthly, and your tax rate is 25%. The annual plan is much cheaper than the monthly plan annualized ($49/month aka $588 annualized vs $299/year)
*I’ve had commission rates range from 5-15% and so far in my 34 bookings, the dollar-weighted average commission is around 10%.
Here’s the math on how much you need to spend to break even post-tax:
Base cost (annual): $299 per year
After a referral discount ($50): $249 per year
Post-tax income on a 10% commission rate, after a 30% Fora cut and 25% tax: 10% * (1 - 30%) * (1 - 25%) = 5.25%
So for this gig to make sense, you need to book $249 / 5.25% = ~$4,750 of commissionable value to break even on your annual plan membership fee.
Note, commissionable value (ie room rate) doesn’t include taxes/ fees which can be ~ 15% so if you want to be super accurate, you need to spend or have your clients collectively spend around $5k on stays to break even in a year.
Yes, it’s a substantial amount of travel expenses if you’re thinking about becoming a travel agent solely for your personal use. However, if you're thinking about making this a part-time or full-time gig, you can spread out that ~$5k in spending by booking for friends and family. The tradeoff, though, is that you'll need to invest more time and effort into marketing yourself and building up your business. Also remember, this number is just to break even.
On the other hand: you can count this membership fee as a business expense and make it tax deductible so it’s all free. Girl math!
For us, it made sense: we were going to spend that money on travel regardless, so why not earn some commission back for ourselves even if the commission is taxable?
Now, in addition to looking at the hotel website or OTAs like Expedia or point transfers, I’m adding the travel agency rates (and access to perks) to my toolkit of options.