CONFUSED ABOUT HOST AGENCIES
By Peter Stilphen, ACC, MCC. ECC
CEO, Coral Sands Travel, "America's Host Agency"
We have all heard about the home based independent travel agent phenomena. It's now the fastest growing segment of the travel industry. The recent travel seminars and conferences we have attended in the past year have been comprised of 80%-plus home based travel agents.
A great majority of home based agents entering the profession lack the credentials to deal with travel suppliers and sell travel to the consumer. Enter the Host Agency.
Host Agencies have the credentials that the home based agent requires, plus can offer support - especially for newer agents - and higher commission rates than those agents can obtain when going alone.
As in any industry that is growing at the rate of home based travel agents and host agencies, our industry is attracting what we called "carpetbaggers" in the old days.
"Carpetbaggers" come in all shapes and sizes and today they are commonly referred to as "card mills" and "multilevel marketing firms." I'll give you an overview of each.
"Card mills" are those agencies that promote their own photo ID card with promises of steep discounts in all areas of travel. The process is legal but the business is outside the mainstream travel industry. You generally receive no support and face possible embarrassment if confronted by a travel supplier or reservations person who recognizes your card as a "scam." You can do much better with a legitimate host agency without having to fork out $495 for fees.
The multilevel marketing travel agency is a little more difficult to recognize, but I will attempt to point out some of its traits. Originally, they were a form of the old "pyramid scheme" and some still are. They would offer you benefits which grew as you brought people into the fold with the process being duplicated over and over.
Generally, those people who entered the "pyramid" at the top benefited, while the latecomers rarely saw any benefits.
Now, you are seeing new, self-proclaimed host agencies enter the travel marketplace with variations of these marketing schemes.
You can spot these so-called marketing host agencies by identifying some of the same traits used by the MLM's in the past:
1. An overuse of individual testimonials, of which many are solicited;
2. Using "hyped" wording in their advertising and E-mail broadcasts that get your attention;
3. Promises of wealth and benefits in the travel business. I saw one of these agencies presenting a seminar where they used the sound of an old cash register each time the demo screen changed. How tacky!
4. High pressure tactics, usually at seminars or trade shows;
5. Using the printed media to offer staged interviews about how good the product is;
6. Promising high commission rates without telling you about setoffs and deductions.
These marketing firms offering themselves out as host agencies generally lose considerable money. If any of these firms go out of business, and they all might eventually, it will give the industry a black eye, including the legitimate host agencies. There will be literally thousands of home based agents owed commissions they will never receive.
And finally, here are a few things you should look for in a good agency.
1. How long has the host agency been in business?
2. Is it properly licensed and bonded?
3. Will you receive the needed support?
4. Does your host agency communicate with you?
5. Is the host agency up to date with technology?
6. Are you able to sell travel with any supplier?
7. What is your commission based upon and what deductions are made from your commission check?
8. Do you have an IC agreement with your host agency?
Of course, this was intended to give you a list of some of the more important items. It comes down to doing your homework when choosing a Host Agency. You can also visit www.choosingahostagency.com
It's not about how large or what the costs are of joining a host agency, but instead it's all about you being comfortable with your choice.
