Belonging to More Than One Host Agency
I'm asked from time to time if it's okay to belong to more than one host agency. The simple answer is yes. But, we all know there's a lot more to it than meets that eye when it comes to "simple" answers! So, while you can definitely align with multiple host agencies, there's a few things you might want to take into consideration before making that leap.
Don't Take No for an Answer
Well, the first thing to know is that as an independent contractor, you have the right to belong to multiple host agencies. Be wary of a host agency that tells you that you cannot belong to another host agency.
Why should you be leery of that limitation? If the host agency is restricting what you can and cannot do, you may not have the independent contractor status, which is at the very foundation of a host agency model. Mainly, if host agency restricts what you do or how you work, it's more likely you are considered an employee than an independent contractor. This can have serious misclassification consequences that you should be aware of: Why is this an issue? Well it can be a huge issue if the host agency is audited by the IRS and is cited for the misclassification—fines for misclassification can be insane and not something you want your host agency to have to pay.
Multiple Affiliation: Let's Put It in Perspective
Second, you'll want to sit down and ask yourself why you want to align with multiple host agencies. As a former host agency director, I ran into quite a few travel agents that did this and usually, I didn't quite understand why they chose that route. I'm not entirely sure they were looking at the big picture when they made their decision.
One agent explained to me the other host agency provided leads so she used them for some things. One agent said they were earning 1% more commission on a cruise line.
Let's look at a few things.
Using multiple hosts means you aren't going to get as much out of the host agency as you could. A few main places this will hurt you:
- Spreading your revenue between hosts affects the way the host perceives your business. Hosts have to rely on the financial information that they have, so if you are split between multiple hosts, it will look as though you are earning lower sales figures than you actually are. In short, they won't have the whole picture. But if you put all your revenue at one host agency, that host agency can see a true reflection of your travel agency's earning potential.
- Relationships with the host agency staff suffer. Dealing with multiple host agencies means you're working with multiple staff. This dilutes your ability to form strong relationships with the people that can help you, and frankly takes more time.
Have you ever read two books in the same time frame? Did you get as much out of them as you would have if you were only reading one? Probably not. Same thing goes for having multiple host agencies. You're learning two different systems (and business cultures) and chances are you're going to miss or under-utilize quite a few things that could be helpful to you. You'll have access to double the resources, but that positive becomes a negative if you don't have the time or energy to retain the information.
Some agents go with multiple host agencies because they can make more money on certain bookings with one host than they can at the other. In business terms, this may sound like it makes financial sense. But, there's a definite cost too.
We've already factored in the non-tangible losses from above, but let's also plug in some real numbers: Sometimes it's worth it, but more often than not, an agent is choosing to go with multiple hosts for just a few percentage points more from a few vendors.
When you break this down to real numbers and factor in the costs of two hosts, the time, energy, and challenges of associating with two hosts, it becomes clear that there may be better ways you could be spending your time—ways that will make you more money than you'd earn with 1 or 2% higher commission on a few bookings. (Maybe use your extra time to try out some tactics from our $100 marketing plan?!)
The Flip Side
All this said, multiple affiliations work for some agencies and can be a great thing. My theory is that belonging to more than one host can be a very bad decision if you're drawn to it for the wrong reasons: My concern is rooted in my experience with agencies that haven't thought through the repercussions of belonging to more than one host agency, and decides to affiliate with multiple hosts just for an extra 3% commission on a few bookings a year.
Multiple affiliation is not something I'd recommend for most agencies, especially newbies. However, if you think multiple host agency affiliations is still something you're interested in, here's a story of an agent that chose (and is happy with) multiple host affiliations. We can't have our article being completely slanted, right? 🙂
If you've got a unique business model and think that multiple affiliation might might be a good fit for you, feel free to drop me a line via the contact us form and we can take a closer look.
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