Excellent question. The business model of AAA (American Automobile Association) travel agents is a bit more layered than that of a typical independent travel agency. Here’s a detailed breakdown of how they make their money.
The core answer is: Primarily through commissions from suppliers, plus membership fees that support the overall organization, and some service fees.
Let’s break it down:
This is the traditional travel agency model. When a AAA agent books the following, the supplier (cruise line, tour operator, hotel, etc.) pays them a commission, typically a percentage of the sale. Cruises: This is a major profit center. Commissions can be significant, especially for premium lines. Packaged Tours: Companies like Globus, Collette, or Tauck pay commissions to AAA for booking their all-inclusive land tours. Hotels & Resorts: They earn commissions on booked rooms, though this has diminished with the rise of online travel agencies (OTAs). Car Rentals: Agencies get a small commission or referral fee. Theme Parks & Attractions: Selling tickets to Disney, Universal, etc., often comes with a commission. Travel Insurance: Selling policies (often through partners like Allianz) provides a commission. This is a high-margin product for agencies.
Key Point: The client does not pay extra for this commission. The price is built into the cost of the travel product, whether you book direct or through an agent.
This is what sets AAA apart. Customers must be AAA members to