Travel agents don’t get discounts on airfare–neither individual airfare nor group airfare is typically discounted specifically for travel agents. Furthermore, we don’t get commissions either. There are some airlines that offer commissionable rates, but the percentages are extremely small, and the airfare is the same as what’s available to anyone online. Consequently, we often have to charge customers more for airfare.
Why not? We get discounts on most travel services (e.g., hotels, tours, transportation, etc., especially for larger groups.). The biggest reason is that the airlines can’t afford to give discounts. Flying is expensive, as explained HERE in this Wendover Productions video. Airlines are well known for needing government bailouts and struggling to maintain their businesses despite the impression of high profits.
Airlines count on selling a certain number of seats, and their pricing is carefully thought out and calculated in order to meet demand, compete in the market, and cover costs. The process of deciding ticket prices is complex and relies on numerous internal and external factors. Wendover Productions explains the basics of this process HERE.
Narrow profit margins and the complexity of this pricing system don’t allow for additional discounts, bulk pricing, or commission. Some flights even lose money just to compete for market share, forcing airlines to compensate for the losses with other, more profitable flights. Historically, flying has been more expensive, and travel agents DID get discounts and commissions in exchange for helping the airline sell their seats. With the invention of the internet, consumers were suddenly able to check multiple airlines’ pricing quickly and accurately. This made a middleman unnecessary and increased the demand for lower fares.
Some people prefer to pay for the convenience of a travel agent looking at the different options, making suggestions, and making the booking for them, but they aren’t saving any money, and travel agents are usually tacking on an extra $20 bucks for their time and effort.
The ticket market also fluctuates based on demand and perceived demand. Just looking for a seat can change the market price the next day. Buying two seats can change the price of the third. All these factors continue to play a role in the pricing of group airfare. When booking 20 tickets, the systems calculate the price changes as each ticket is added and provides an average per-ticket price that is often higher than what’s currently available online. These searches then impact the online price over time as the algorithms predict the demand for the remaining seats, even before the other tickets are actually sold.
One interesting thing about group airline travel is that you can reserve the seats but wait a few days to confirm and pay for them. The system views the seats as sold, and the remaining tickets are calculated based on those seats being sold, even if they aren’t finalized. This allows manipulation of the market. If someone reserves 20 seats at the lowest ticket prices possible, it forces the next ticket up several price brackets. They can force the ticket price to jump even if most of the seats haven’t really been sold. When some of the higher-priced tickets are purchased, the 20 seats can be released and will now sell for a higher price than they were originally reserved for. Travel agents will sometimes utilize this tactic, called Seat Blocking, to artificially inflate the market to help force customers to purchase their tickets. If the agent provides a price, they could also reserve a bunch of seats in order to force the public online price up, making their price look better than the market rate. This can also be used to quote a higher price than what the agent will actually pay so “savvy” clients will see a higher price online than what the agent is actually paying, leading the client to believe they are getting a better price with the agent.
Seat blocking is not something I have ever done, nor is it common among travel agents, but it’s an interesting quirk of the ticketing system.
The bottom line is this:
If you want to save the most money, use a service like Skipplagged to find the best pricing and include budget airlines, like Spirit and Frontier, in your search. Just be sure to pay attention to things like baggage fees, carry-on fees, etc.
If you want to find the flight times that work best for you at reasonable prices, look at the major airlines that aren’t budget airlines. Southwest is technically a budget airline, but it operates differently than Spirit and Frontier. With Southwest, you’ll often pay more than a Spirit flight, but you’ll get as many perks and inclusions as a Delta flight, sometimes even more. Southwest does not, however, offer business class, first class, or even assigned seating, just the option to board the plane earlier and pick a better seat.
If you don’t want to do all the research, give a travel agent your criteria and accept that you’ll pay $20 or $30 more for that service.
Side Note: There IS one way that travel agents will get discounted airfare. Brokers will buy up a lot of tickets when they’re first posted and sell those tickets at their own prices throughout the year. Generally, a broker will tack on a small fee to each ticket, but once that block of tickets has been purchased, all the other tickets go up in cost, making the broker’s tickets cheaper than the online rates. The broker will then sell these tickets to travel agents, who then tack on their own cost and sell it to the client at a higher but still discounted rate.
For example, the broker buys ten tickets for $155 each, forcing the online rate up a bit. They mark the tickets up to $170 each. A travel agent sells the same ticket for $185 when the published rate online is $195. The client still gets a discount, and all the middlemen still make money. This, in some ways, is also how ticket brokers sell event tickets, sports tickets, etc., but that’s a story for another blog.
