Faraway - how do travel companies make money?

How does Faraway make money?

As a young startup with quite a unique offering, we get asked this question a lot. We realise it’s not always clear to people how the travel industry works, and how companies like ours make money. So, in the interest of transparency, and to explain where your money goes with us, we want to be honest about how we work as a business.

First, how do travel companies make money?

While this post is very much about Faraway, we wanted to give some background about the industry in general and how travel companies make money to contextualise how we operate. We’re a relatively small fish in a very big pond. 

The travel industry is huge and complex - it's one of the largest in the world*, and it’s growing and changing all the time. At one end of the spectrum, two of the biggest travel companies, Expedia Group and Booking Group, both made over $80bn in annual sales last year **. For companies of this size, their revenue mostly comes from taking commission on online bookings, bulk-buying rooms at a discount, and advertising - all at mass scale. However, most of us will have to settle for more modest sums.

As the industry continues to adapt and evolve, there are more ways than ever to make a living in travel. Commission, which used to be one of the biggest sources of revenue, is being squeezed across the board and so many travel companies, Faraway included, will combine a couple of ways to make money. Right now, some of the more popular ones include: advertising, paid partnerships with brands, content creation, publishing books and magazines, corporate travel concierge services, industry consulting, hosting guests and leading tours.

So how does Faraway make money?

We try to keep things simple, and aim to offer great value for money while delivering exceptional, unforgettable travel experiences. With this in mind, we currently make our money in three ways:

1. An upfront planning fee

We charge an upfront fee for the work we do to plan each trip from scratch. (NB - you only pay this after a free call to decide if you want us to work with you).

We put a lot of our time, effort, expertise and passion for travel towards organising your escape based on the things you love. Our experience of travelling and the knowledge and connections we’ve built up mean that we can advise you on where to go, how long for and at what time of year - all things we think are valuable and worth paying for. For any trips planned in April 2019 onwards, we will also donate 10% of this sum to charity.

2. Commission

Once we’ve planned your trip and you’re happy with everything, we will take care of all of your bookings, and receive a commission on these. As mentioned above, this is an industry-standard way for travel companies to make money. It’s deducted from the price that the hotels and experience providers publish on their website, so at no extra cost to you. 

The amount that can be made from commission varies widely between countries, hotels and agents. As a small startup, we work on a much smaller scale than some of the big companies mentioned above, and our commission rates reflect that.

Note - it’s an important part of our ethos that, as an independent company, we’re not tied into working with specific places. We will only recommend hotels and experiences that we genuinely think you’ll love, and our recommendations can't be bought. This means, if we discover a small jungle lodge (for example) that we think would suit you perfectly but it can only afford to pay us a low commission, we’ll still work with them, as long as we can come to a fair agreement.

3. Organising group escapes

As well as planning bespoke trips, we also organise founder-led group escapes. Last year we ran our first, bringing together sixteen busy 30-something strangers on an immersive 10-day adventure in Malawi

A huge amount of work goes into them and there are lots of costs involved beyond a normal bespoke trip. These include a photographer, our time guiding the trips, a local charity donation linked directly to sales (not profit), goodie bags for our travellers and more. We design them to be luxurious, adventurous and one-of-a-kind, and are able to offer fantastic value on them due to the size of the group. We make a small margin on these escapes, and plan to run two more later this year.

Why are we telling you this?

We want to be as open as we can to help you understand how travel companies work. Whilst we love working in travel, we know it can be complex and opaque, both for consumers and those of us trying to make a living in it. We think our travellers - like us - value transparency, and so that’s what we’re trying to offer. 

Want to know more about how we work?? Read the answers to our most common questions.

(* World Travel and Tourism Council)

(**Travel Weekly’s annual “Power List” of companies with at least $100m in annual sales)


At Faraway we create bespoke escapes you’ll never forget; we understand how important your time off is, so we're here to take away the stress and help you go on an incredible trip.

Would you like us to plan your dream escape? Book in a free exploratory call here to get started.

Team Faraway x

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