🚩 What Are Ancillary Services?
When you book a holiday through a travel agent, the flight and hotel are just the beginning. Travel agents also offer a whole range of extra services that go alongside the main booking. These are called ancillary services and they're a really important part of how travel agents operate.
Think of it like ordering a burger. The burger is the main product, but the chips, drink and sauce on the side? Those are the ancillary extras. They make the experience better and they make the business more money.
Key Definitions:
- Ancillary services: Additional products and services offered by a travel agent alongside the main holiday booking, such as insurance, currency, or car hire.
- Add-on: An optional extra that a customer can choose to purchase at the time of booking.
- Commission: A percentage of the sale price paid to the travel agent by the service provider (e.g. an insurance company).
- Cross-selling: Offering related products to a customer who is already buying something for example, offering travel insurance to someone booking a flight.
💡 Why Do Ancillary Services Matter?
For travel agents, ancillary services are a major source of income. As commission on flights and holidays has dropped over the years, agents have relied more and more on selling extras to stay profitable. For customers, these services add convenience everything is sorted in one place.
📋 The Main Ancillary Services
There are several key ancillary services that travel agents commonly offer. Let's go through each one in detail.
🛡 1. Travel Insurance
Travel insurance is probably the most important ancillary service a travel agent sells. It protects the customer if things go wrong like a cancelled flight, a medical emergency abroad, or lost luggage.
Travel agents are trained to recommend insurance at the point of sale. In fact, many agents are required by law to make customers aware of the option. If a customer refuses, the agent often asks them to sign a form confirming they've declined it.
✅ What Travel Insurance Covers
- Medical expenses abroad
- Trip cancellation or curtailment
- Lost, stolen or damaged luggage
- Flight delays or missed departures
- Personal liability (if you accidentally injure someone)
- Emergency repatriation (getting you home)
💰 How the Agent Benefits
- Earns commission from the insurance provider (often 20–40% of the premium)
- Builds trust with the customer by offering complete protection
- Reduces complaints insured customers are less likely to blame the agent if something goes wrong
- Meets legal and regulatory obligations
📄 Case Study: Hays Travel and Insurance Sales
Hays Travel, the UK's largest independent travel agent, trains all its staff to discuss travel insurance with every single customer. After buying Thomas Cook's retail stores in 2019, Hays Travel onboarded over 2,500 new staff and made insurance training a core part of their induction programme. Their approach shows how seriously the industry takes this ancillary service both for customer welfare and for business revenue.
💲 2. Foreign Currency and Travel Money
Many travel agents offer a foreign currency exchange service, either in-branch or online. Customers can buy foreign cash, prepaid travel cards, or traveller's cheques before they go on holiday.
This is a really convenient service customers are already in the travel agent sorting their holiday, so picking up their euros or dollars at the same time makes sense. The agent earns a margin on the exchange rate, meaning they buy currency at one rate and sell it slightly higher.
💳 Types of Travel Money Products
- Cash: Physical foreign notes and coins
- Prepaid travel cards: Like a debit card loaded with foreign currency popular because they lock in the exchange rate
- Traveller's cheques: Less common now, but still used they can be replaced if lost or stolen
📈 How Agents Earn from Currency
- They apply a margin (small profit) on the exchange rate
- Some charge a handling or commission fee
- Partnerships with currency providers like Travelex mean agents earn referral fees
🚗 3. Car Hire
Car hire is a very popular ancillary service, especially for customers booking independent holidays or visiting destinations where public transport is limited like rural France, the USA, or the Greek islands.
Travel agents partner with car hire companies such as Hertz, Avis, Enterprise and Europcar to offer bookings at the time of holiday purchase. This is a great example of cross-selling the customer is already thinking about getting around at their destination, so the agent suggests a hire car.
💡 Did You Know?
Car hire is one of the highest-commission ancillary products. Travel agents can earn up to 10–15% commission on a car hire booking. On a two-week hire in the USA, that could easily be £30–£60 per booking just for making the reservation!
🚌 4. Airport Transfers
An airport transfer is transport from the airport to the hotel (and back again) at the destination. This might be a shared coach, a private taxi, or a minibus.
For many customers especially families or older travellers knowing that transport is sorted when they land is a huge relief. Travel agents can book transfers through operators like Holiday Taxis or Hoppa and earn commission on each booking.
✅ Types of Transfers
- Shared transfer: Coach or minibus shared with other holidaymakers cheaper but slower
- Private transfer: A taxi or car just for your group more expensive but direct
- Executive transfer: Luxury vehicle often used by business travellers
👤 Who Buys Transfers?
- Families with young children (don't want to navigate public transport)
- Elderly travellers
- Late-night arrivals (when public transport isn't running)
- Customers staying in remote resorts
🏠 5. Accommodation Upgrades and Hotel Extras
Travel agents can also upsell room upgrades, board upgrades (e.g. from bed and breakfast to all-inclusive) and special extras like honeymoon packages, early check-in, or sea-view rooms.
These upgrades are often sold at the time of booking or just before departure. Hotels and tour operators pay agents commission for selling higher-value rooms and packages.
📄 Case Study: TUI Extras
TUI, one of the UK's biggest tour operators, offers travel agents a range of upgrades to sell to customers including room upgrades, meal plan upgrades and in-resort experiences like excursions. Agents who sell these extras earn additional commission and TUI benefits from higher revenue per booking. It's a win-win. In 2023, TUI reported that ancillary revenue per customer had grown significantly, with more customers opting for all-inclusive upgrades.
✈ 6. Airport Extras: Parking, Lounges and Fast Track
Many travel agents now offer a range of airport services that make the departure experience smoother. These include:
🚗 Airport Parking
Customers can pre-book parking at their departure airport. Options include on-site parking, off-site parking with a shuttle bus, or meet-and-greet (where someone parks the car for you). Agents earn commission through providers like Holiday Extras.
🍷 Airport Lounges
Access to airport lounges (with free food, drinks, Wi-Fi and comfortable seating) can be booked in advance. Popular with business travellers and those on long journeys. Agents earn a referral fee for each lounge booking.
⚡ Fast Track Security
Allows customers to skip the main security queue. Particularly popular at busy airports like Heathrow or Manchester. A small but appreciated luxury that agents can easily add to a booking.
💊 7. Visa and Passport Services
Some destinations require a visa an official permit to enter the country. Travel agents can advise customers on visa requirements and, in some cases, help them apply or direct them to a specialist visa service.
Similarly, agents may remind customers to check their passport is valid and, in some cases, partner with fast-track passport renewal services. This is a value-added service it doesn't always generate direct income, but it builds trust and keeps customers coming back.
Countries that commonly require visas for UK tourists include the USA (ESTA), India, Australia (ETA), Turkey and Egypt. Getting this wrong can mean a customer is denied boarding so good advice here is genuinely valuable.
🏞 8. Excursions and Activities
Travel agents can book excursions day trips and activities at the destination either before departure or through in-resort representatives. Examples include boat trips, city tours, theme park tickets, safaris and cooking classes.
Pre-booking excursions through the agent is often cheaper and more reliable than booking on the street at the destination. Agents earn commission from excursion providers and customers get peace of mind.
📄 Case Study: Attraction World
Attraction World is a specialist supplier that works with travel agents across the UK to sell theme park tickets and attraction passes including Disney World, Universal Studios and Legoland. Travel agents can earn up to 10% commission on ticket sales. For a family of four buying Disney World tickets, that's a significant sum. Attraction World provides agents with training, marketing materials and a booking platform, making it easy to cross-sell to customers booking Florida holidays.
🔄 How Ancillary Services Fit Together
A good travel agent doesn't just sell one ancillary service they think about the customer's whole journey and offer relevant extras at each stage. This is called a customer journey approach.
📋 The Customer Journey and Ancillary Services
📅 Before Departure
- Travel insurance
- Foreign currency
- Visa assistance
- Airport parking
- Airport lounge access
- Fast track security
✈ At the Destination
- Airport transfer
- Car hire
- Room/board upgrades
- Excursions and activities
- Attraction tickets
💰 Revenue for the Agent
- Commission on each product sold
- Margin on currency exchange
- Referral fees from partners
- Increased customer loyalty
- Higher overall booking value
🔥 Why Ancillary Services Are So Important to Travel Agents
In recent years, travel agents have faced serious competition from online booking platforms. Customers can book flights and hotels directly so why use an agent? Ancillary services are a big part of the answer.
👍 Benefits for the Travel Agent
- Extra revenue from commission and margins
- Differentiates them from online-only competitors
- Builds stronger relationships with customers
- Increases the total value of each booking
- Helps justify the agent's existence in a digital world
👤 Benefits for the Customer
- Convenience everything sorted in one place
- Expert advice on what they actually need
- Often competitive prices through agent partnerships
- Peace of mind (especially with insurance)
- Personalised service tailored to their trip
💡 Exam Tip
In the exam, you may be asked to explain or evaluate the ancillary services offered by travel agents. Always try to link each service back to how it benefits the agent financially (commission, margin) AND how it benefits the customer (convenience, protection, value). If you can name a real example like Hays Travel selling insurance or Attraction World supplying theme park tickets you'll pick up extra marks.
🔥 Challenges and Criticisms of Ancillary Services
It's not all positive. There are some criticisms of how ancillary services are sold and the exam might ask you to evaluate both sides.
👎 Potential Downsides
👎 For Customers
- Can feel pressured into buying extras they don't need
- Insurance sold by agents may not always be the best deal customers could find cheaper policies elsewhere
- Currency rates at travel agents are not always the most competitive
- Some customers feel the process becomes too "salesy"
🚫 For Agents
- If a customer has a bad experience with an ancillary product (e.g. poor car hire), they may blame the agent
- Regulatory requirements around insurance sales add complexity
- Online competitors often offer the same ancillary products cheaper
- Staff need ongoing training to sell ancillary products correctly
📚 Summary Key Points to Remember
- Ancillary services are additional products and services offered alongside the main holiday booking.
- The main types include: travel insurance, foreign currency, car hire, airport transfers, accommodation upgrades, airport extras (parking, lounges, fast track), visa services and excursions.
- Travel agents earn money from ancillary services through commission, margins and referral fees.
- Ancillary services are increasingly important as agents face competition from online booking platforms.
- They benefit customers through convenience, expert advice and peace of mind.
- Criticisms include pressure selling, uncompetitive rates and potential reputational risk if products disappoint.
- Real examples: Hays Travel (insurance), TUI Extras (upgrades), Attraction World (excursions), Holiday Extras (parking and lounges).