The distribution network is the cornerstone of the travel industry and there are multiple layers in the network- all of which earn money by distributing the product and services of the travel industry suppliers.

There are a number of distribution channels that suppliers in the travel industry use. These include:

• Affiliate Networks
• Meta Search Engines
• Online Travel Agents
• Retail Travel Agents
• Tour Operators
• Corporate Travel Management Operators
• Suppliers Direct Sell Website
• Suppliers Call Centre

Even the GDS system which travel agents use to book flights earn about £5 for every segment booked!

Who pays commission?

Anyone offering a product or selling a service in travel will either:

1. Pay commission
2. Offer a highly discounted net rate which you can mark up

The type of product and service suppliers that pay commission include, but are not limited to:

• Bed Banks (Hotel Only Suppliers)
• Tour Operators
• Excursion providers
• Airlines
• Car Hire Operators
• Cruise Lines
• Theme Parks
• Theatres and Shows
• Hotels
• Ground Transfer Providers

Who Earns the Commission

When you find a flight, hotel, holiday, car or any other travel product  on Google Flights, Kayak, Skyscanner, Travel Super Market or other Meta search site and then click through to the supplier’s website to book, the meta search engine will earn a commission from the booking or a payment for the click depending on their commercial arrangement.

When you book through a travel agent, the travel agent earns a commission. When you book through an OTA or Tour Operator, you will be paying a marked up rate on a discounted net price that they have negotiated with the supplier.

When you see a link to a travel supplier on a blog or information site, the site owner will earn a commission when the user they have directed to the travel provider makes a booking.

Even the hotel in destination that promotes local tours and excursions, or sells tickets to local attractions, theme parks or events earns a commission.

Companies like Expedia operate the Travel Agents Affiliate Programme where travel agents can earn up to 11% on any Expedia product for sale on the Expedia website.

You can earn that commission!

As a travel agent, you earn the commission if you are booking for clients, friends or family. If you are travelling yourself and have been unable to secure an industry discount, you would still save money by treating the commission as a discount on the rate you are paying for your personal travel

Negotiate for even more

As a travel agent, it is not unusual to negotiate on a rate. For example, you may have a client that wants to stay at a particular hotel and has seen rates online. You have access to the same rates and can earn a commission, but you want to make sure you offer a little bit extra to secure the booking. As a travel agent, you would email the director of sales or head of guest services at the hotel and would tell them you are trying to confirm a client at their hotel over one of their competitors but need to secure a value added benefit to confirm the booking. This could be a room upgrade, a guaranteed early check in or late check out or even access to the executive lounge. More often than not, a hotel will offer a benefit to secure a booking.

How much commission can I earn

Commission rates vary from supplier to supplier, but you can generally expect to earn a minimum of 10%. Some suppliers are more generous and pay as much as 25% although this will generally be for complex multi destination bookings. We have negotiated with many suppliers to enable our travel agents to earn between 12%-15% instead of their standard rate of 10%.

So book 2 adults and 2 children on a £3,000 family holiday to Dubai for 7 nights and you will earn a minimum of £300 and as much as £450 if the booking is with one of our preferred suppliers. Do 5 of these a month, and you walk away with £2,250!

Hotels operate a vast range of rates for the rooms in their hotels. They will have the standard rates, rates for the loyalty club members, corporate rates, leisure rates, advanced purchase rates and much more. Hotels even go as far as operating different rate for different nationalities.

We have explained the different rate options below and also when you would need to pay for the hotel reservation based on the different rate types.

Tour Operator Rates

Tour operator rates, which we provide you access with, are net rates (non commissionable). Most tour operator rates will offer a number of benefits over the rates featured on a hotel’s own direct sales channel such as their website and call centre. They key advantages are:

• Generally at least 20% – 25% less than the rates on the hotel’s direct sales channel
• Value added benefits which can include
  • Free Breakfast
  • Free Half Board and sometimes even Full Board and All Inclusive
  • Welcome gifts such as free drinks, fruit basket
  • Complimentary spa treatments
  • Complimentary meals
  • Free nights
  • Complimentary space available room upgrades
  • Honeymoon benefits and discounts
  • Free airport transfers
  • Discounts at hotel outlets on other services

Tour operator rates cannot be sold as a stand-alone product and must be packaged together with flights, cruise, car hire or tour. A tour operator rate will generally not need to be paid for until about 4 weeks before departure, UNLESS the rate is a non refundable rate, in which case it must be paid at the time of booking. You make money on these rates by adding a profit margin.

These rates will NOT qualify for points under the hotels loyalty programme.

Travel Agent Rates

These rates are generally identical to the rates offered on the hotel website. The key difference is that the rate will be commissionable. The typical rate of commission is between 10-12%. Most travel agent rates require the customer to pay on arrival at the hotel. The room is guaranteed by the customer’s credit card and generally can be cancelled up to 48 hours prior to arrival. Failure to cancel will generally result in a penalty of 1 night. Once the guest has paid the hotel for their stay, you will be entitled to claim your commission.  

These rates WILL qualify for points under the hotels loyalty programme.

Corporate Rates

Corporate rates are live and can be booked using the hotel’s travel agent booking platform or on the GDS. Your corporate client will have a Corporate code which you will use to access their rates. The corporate rate is commissionable in the same way as the travel agent rate. You secure the reservation with the client’s credit card and the client will pay upon check out. You will be entitled to claim your commission once the client has completed their stay.

Corporate rates will allow clients access to:

• Discounted Rates
• Value Added benefits
• Upgrades
• Bonus Miles

These rates WILL qualify for points under the hotels loyalty programme.

Educational Rates

Educational rates are offered by hotels to encourage agents to come and experience their product. The rationale behind this is that the agent will be able to promote the hotel more effectively and therefore more likely to sell it. Educational rates can be as much as 80% less than the standard hotel rates and therefore represent exceptionally good value. The only downside of this rate type is that you can only book one room for personal stay and therefore won’t help travel if you are travelling with your family.

Educational rates are also generally more limited in availability and also restrict stays to a maximum number of days – typically in the region of 3-5 days. To qualify for the educational rate, you will generally need to complete an online training programme with the hotel group. In addition you will need to present an IATA ID card at check in to qualify for this rate.

The educational rate requires you to guarantee the room with your credit card and pay for the room on the day of checkout.

Industry Discounted Rates

This is a straightforward discounted rate which travel agents can book for themselves for their personal travel and doesn’t come with the restrictions of the educational rate. The rates are often 50% less than the standard rates. You can generally book multiple rooms for longer stays. There is also generally more availability on industry discount rates than on educational rates. You will need to present an IATA ID card at check in to qualify for this rate.

The industry discount rate requires you to guarantee the room with your credit card and pay for the room on the day of checkout.

The Caveat

We have provide a general overview of the typical rules that apply to the different rate types. When it comes to booking a hotel room, you will see the exact rule that apply to the rate prior to confirming. These may differ to the general rules we have stated above.

Airlines manage their flights, reservations, yields and many other aspects of the flights they operate on a GDS (Global Distribution System) which is sometimes also called a CRS (Central Reservations System). Travel Agents use the same GDS system to book flights and manage flight reservations for their customers.

There are 4 main GDS globally:

• Amadeus
• Galileo
• Sabre
• Worldspan

When you become a member of TPC, you will have access to all 4 of these which will particularly benefit those that have worked in travel before. We can also arrange training for you on any of the 4 main GDS platforms.

The history and evolution of the GDS

Those of us who are old enough to remember air travel in the 1970s will recall that travel agents had card imprinters (similar to the credit card imprinters that shops used at that time). They would place a gold coloured metal airline card (known as a plate) under a blank ticket and then swipe across. They would then fill in the flight details and pricing on the ticket by hand and then tear out various carbon copy coupons. They would phone the airline and tell the airline that they had issued a ticket, and they would give the airline the ticket number that was pre-printed on the ticket. The airline would load this information into the GDS. At the time of travel the check in clerk would match the details from the GDS to the ticket presented to them for travel. Every month, the travel agent would complete a BSP return and submit the audit coupons of every ticket to IATA so that they could be billed for all the tickets they had issued.

Of course for all this to work, the travel agents had to first call the airline and make the reservation. They would not be liable to pay for the reservation until the ticket was issued and the ticket number was stored with the reservation or, as it is known in the industry, the Passenger Name Record (PNR). The reservation could not be cancelled by the airline, because the travel agent would need time to issue the ticket. So the airline would set a ticketing time limit (TTL). If the ticket was not issued within the time limit, the airline would then cancel the PNR.

Things had to change!

This very long and convoluted process had to change and in the mid 1980s as the price of computers reduced, travel agents gained their own access to the GDS. Using dial up modems connected to the telephone line, travel agents were perhaps one of the first industries in the world to make the technological leap globally connected computer networks!

Once connected to the GDS, the travel agent would follow the same process as they did in the old days. They would first make the reservation and create the PNR. They would then use their ticket printer to issue the ticket. The time in between would be the period prior to the TTL.

That process that applied in the 1970s remains the same today. Travel agents first make a reservation in the GDS. The GDS will then set a TTL (usually 72 hours) within which tickets must be issued or the PNR will be auto cancelled.

Holding tickets for longer than 72 hours

Some contracted Seat Only (SO) and IT fares do not have to be issued until 30 days prior to the flight. During this time, the fare quoted at the time the booking was made remains valid but no cancellation charges apply if the ticket is cancelled.

For example, I make a booking using an IT fare to Johannesburg travelling in 10 months time. The fare is £500. In 9 months time, I have to issue the ticket. At that point the cheapest fare available on the same flight is now £1,100. I would still only pay £500. If I decide that I no longer want to travel, I just cancel the PNR and don’t loose ANY money.

The benefits of holding tickets

1. The price could go down further or there could be a sale within the next 9 months that I could take advantage of.

Example: I book in July for travel next May. In January most airlines have sales. In the same, the price for my flight goes down to £300. I simply cancel my previous booking and re-book at the lower fare. If we are a family of 4, I save £800

• I am unsure about my travel plans

I am thinking of travelling to South Africa but have also through about Kenya. I don’t want to risk the air fares going up, so I book both destinations now and cancel the one that I don’t need later without any penalties.

• I want to wait for other people or other items to confirm

I am waiting for my partner to confirm they can get time off work, or I am waiting to see if I can get tickets to the event we are going for. There are so many contingencies involved when we travel and being able to hold a flight reservation and guarantee the price removes one of the stresses involved!

Providing a service that the internet wont

If you are joining the club to sell travel then the ability to hold tickets is something which sets you apart from the internet. You are able to offer a service that websites either cant or will charge a premium for. This is a USP that you can promote on social media and amongst your networks. Many travel agents still sell a lot of tickets simply because they offer the flexibility to hold confirmed reservations without having to pay for the ticket.

Airline and hotels both have a special category of rate that are designed for the leisure traveller but that you can never find online. These rates can offer savings of as much as 80% off the standard cost, and in this article we explain how it all works.

Discounting without competing against their own direct sales channels

Airline and Hotels now increasingly offer best price guarantees on their websites. Direct sell websites even go as far as saying that they will refund you double the difference if you find the same deal cheaper anywhere else. The principle that drives this is simple- drive customers to book direct, cut out the middle men and make more money. And, to ensure that no one is selling cheaper than the direct consumer site, they offer an incentive to customers to report anyone that does so that those companies can be reprimanded or have their sales contract taken away.

But airlines and hotels still need to fill up their seats and rooms, which means they need to be creative with their distribution strategy. They can’t offer rates to travel companies that are much cheaper than their own direct sales channels because if they do, it is inevitable that someone will undercut them.

That’s why we have IT Air Fares and FIT hotel rates

Let’s begin by clarifying- you don’t need to be a geek who knows how to write code in PHP or someone who has the body of an athlete and resting pulse under 60 to qualify for these rates. IT stands for Inclusive Tour and FIT stands for Fully Independent Traveller. These are rates that MUST be packaged with other products and sold at one fully inclusive price without revealing the sum of its parts.

This model allows hotels to sell rooms cheap and airlines to manage their yield by releasing seats at a lower price without having to discount against their own direct sales channels. They can still earn the higher margins on their room only or flight only sales both on their own platforms and through the travel trade whilst releasing discounted seats and not alerting the market.

What is the difference?

It is well known that flight prices go up the closer you get to the departure date. The reason for this is that airlines know that travellers will pay a premium when they NEED to travel. Because most airlines follow the same strategy, the consumer has little choice but to pay the premium. Hotels also have the highest rates for last minute bookings. The highest rate of all being the rack rate or walk in rate where someone comes in without a reservation asking for a room.

It is however also well known that you can often get a big discount on last minute holiday deals.

So how does that work?

A holiday is a flight and a hotel which are more expensive the closer you get to the departure and yet a flight and hotel combined can often be cheaper?

In short, the answer is yes. FIT and IT rates are fixed and don’t generally have advanced date booking requirements. This can have a crazy impact on pricing. A flight on Virgin Atlantic to New York tomorrow for 5 days will cost me a whopping £1,061 when I check the best rates on Kayak, Skyscanner and Momondo. The IT fare on the other hand, which is available on the same flights is only £360. As a travel agent, you can buy an IT fare for yourself but you obviously can’t sell it.

Here is how you make some serious money!

The cost price of our cheapest hotel in New Jersey (another state, but just across the Hudson and a short drive from Manhattan) is only £34 per night. 5 nights will therefore cost £170. Add this to the £360 for the flight, and the cost price for the holiday is £530. The cheapest flight only deal is £1,060. If you have someone who just wants a flight to New York because they are visiting family, joining someone else who already has a hotel booked or are having their accommodation being taken care of by their host in New York, they would have to pay £1,060 for their flight. You could sell them the same flight (including the hotel) for £899.

Your customer saves £161 and you make a whopping £369. If you have 4 travellers who need these flights then you would make over of £1,500 because the room actually sleeps 2 people, which means you can split the hotel cost between 2!!!!!

You can tell the customer you have thrown the hotel in for free, whether they choose to use it or not!

The Sunday Rule

In addition to advance purchase rules, many airfares have what’s known as the Sunday Rule or Saturday Night Stay rule. This is designed to prevent business travellers using cheaper leisure fares for corporate travel where airlines tend to make most of their profits from. The Sunday rule applies to flight only sales but often will not apply to IT fares. Whilst big corporate travel companies will have the services of a Corporate Travel Management company, there will be many smaller businesses that simply book their travel online. If you are one of these people, you could save a fortune every year by using IT fares for yourself. If you are selling travel, let your contacts know that you can save money for business travellers and start making some serious money.

FIT Rate Advantages

For hotels, the FIT rates won’t just provide you a cost saving on the room only rates available on hotel or online travel agent websites. FIT rates will often feature some added value benefits. Most rates on hotel websites will be room only whereas the FIT rate will generally include breakfast and sometimes even have free upgrades to half board. FIT rates will provide family deals, all inclusive deals and the use of some services (such as the Spa) for free that would normally be chargeable.  

Access IT Fares and FIT rates on the Portal

Our travel agent portal which is available to all paid up members features all our IT fares and FIT rates. Simply login and use the search facility to see rates and check availability. If you complete our GDS Training Programme, you will also be able to use the GDS to search and book your IT fare.

We have IT or Seat Only rates with all the following airlines:

• Air Europa
• Air France
• Alitalia
• Aer Lingus
• Air Canada
• Aerolinas Argentinas
• Air Malta
• Air Mauritius
• Air India
• ANA
• American Airlines
• Asiana
• Avianca
• Air China
• Austrian
• Air New Zealand
• Brussels Airlines
• British Airways
• Cathay Pacific
• Czech Airlines
• China Southern
• China Eastern
• Delta
• Egypt Air
• Ethopian
• Emirates
• Etihad
• Eva Air
• Finnair
• Garuda
• Gulf Air
• Iberia
• Iceland Air
• Kenya Airways
• KLM
• Korean
• LATAM
• LOT
• Lufthansa
• Malaysian
• Oman Air
• Philippine Airlines
• Qantas
• Qatar
• Royal Brunei
• Royal Air Maroc
• Saudia Arabian Airlines
• SAS
• Singapore Airlines
• South African
• Sri Lankan
• Swiss
• TAP
• THAI
• Turkish
• Ukraine
• United
• Virgin Atlantic
• Vietnam Airlines