Host Agency Commission Plan Comparison Calculator [+ Infographic]

September 8, 2020

Here's a little secret that you probably already know: Comparing host agency commission plans is maddening! Beyond different commission plans a hosts' fees vary, their resources vary, and their programs vary. This can make it difficult to do a side-by-side comparison. *Sigh.* There's no comparing apples to apples here. It's more like comparing apples to . . . goats? 😊

It can be tough to tell which host agency offers the best value for what you need, but running the numbers is important, our host agency commission plan calculator will help.

It can be tough to tell which host agency offers the best value for what you need, but running the numbers is important, our host agency commission plan calculator will help.

So whether you're a newbie looking for your first host agency, or you're a seasons pro considering switching hosts, this host agency commission plan calculator is here to help you out.

Before we launch into our calculator, we have a crash course on:

1. Commission payments for hosted agents

2. Host agency commission splits

3. Common host agency commission structures [+Infographic]

Don't need our commissions crash course? Skip this section and go directly to our commission calculator by clicking the button below.

Commission Calculator Shortcut

A Primer on the Commission Payment Process

We take a deeper dive into commissions here, but below are crib notes on commission payments for hosted agents, host agency commission splits, and common host agency commission structures.


Commission Payments for hosted agents 101

One of the primary benefits of using a host's accreditation is that you're likely to earn a higher commission cut from vendors.
Supplier, host agency, travel agent commission flow

There are lots of reasons travel agents sign up with a host agency but one of the main reasons is to book under the host’s accreditation number.

For many individual contractor (IC) agents (especially newbies), getting their own accreditation is not an option due to eligibility requirements. But even many seasoned agents choose to go with a host to spare themselves the bureaucratic fun of apply for an accreditation.

Just to give you a ballpark idea, only 16% of agents reported have their own accreditation in our latest fee survey. The rest were hosted.

When you book under a host's accreditation here's how the commission ends up in your bank account:

You book with supplier, Rigel's Space Tours using Awesome Host Agency’s accreditation number.

Rigel's Space Tours recognizes your booking as belonging to Awesome Host Agency and pays the appropriate commission to your host.

Awesome Host Agency receives the commission then looks in their records to see which IC made that booking. Through the magical powers of backend invoicing and commission-tracking (yet another advantage of using a host), Awesome Host Agency knows the commission belongs to you. They take their agreed upon commission percentage and pay the rest to you!

Okay, so you know how ICs get their cut from suppliers via their host agency. What's the deal with a host's commission split, and how can it possibly add up to more moolah for you? Read on.

Parched for more info on the booking process? This will quench your thirst for knowledge.


Host Agencies and Commission Splits

Even if your host agency has a 60/40 split, you may very well earn more with a host than on your own. Here's why:

A primary benefit of using a host's accreditation is that you're likely to earn a higher commission cut from vendors.

A primary benefit of using a host's accreditation is that you're likely to earn a higher commission cut from vendors. Since a host’s sales are an aggregate of all their ICs, host agencies typically have much higher sales than individual agents or agencies.

Money talks and suppliers are likely to offer more favorable contracts to hosts due to their higher sales volume than a solo agent or agency.

If you belong to a host agency, chances are that your contract will include a commission split. Some agents express woe at having to split commissions with a host, but it’s important to remember what you get in return.

With a host's higher sales volume, you’ll be able to earn a much higher commission from a host’s preferred vendors than you would earn on your own, big time . . . even if they have a 80/20 split.

Want to read up more on preferred suppliers? Check out this resource!

Here's a concrete example:

Let's say you have annual sales of $5,000 with Rigel's Space Tours. According to their commission tier table, you'd earn 10% if you booked them on your own. But Awesome Host Agency earns a 15% commission from Rigel's Space tours because they book over $500,000 among their IC network.

Yay! You're a part of Awesome Host Agency's IC network! This means your $5k booking now earns 15%. Hurray, 5% more!

So on a $5,000 booking you went from earning $5,00 in commission to $750. Woo hoo! Now let’s factor in your commission split with Awesome Host Agency.

If you're on an 80%, that leaves you with $1,200—$200 (or 20%) more than if you had booked on your own. That's just for one booking. If you multiply it by every booking you make, it can really add up!

Comparing host agency commission vs independent travel agent commission

There's a ton of factors that will impact your bottom line, but it should give you a general overview of how to start thinking about host commissions.


Common Host Agency Commission Structures

There's over 150 host listings on our site, and each hosts' commission splits and fees will vary. To make matters more complicated, many host agencies offer multiple commission split options.

Sometimes they're straightforward. Other times, a host's commission may depend on factors such as your sales volume, whether you’re using their lead program, and what commission split you’re able to negotiate with your host (for those open to negotiation).

I took a look at our most highlighted hosts to give you a general idea of what kind of commission splits and fees you can expect:


Our FREE Host Agency Commission Plan Calculator, Served Two Ways

If you're here, you know that host agency commissions plans are complicated. Our commission split calculators will help you wade through all that information and help you make an informed choice in selecting the best host agency for you.

You're probably thinking, Did you say commission calculators . . . plural? Yes we did. We created two slightly different commission calculators:

1. Comparing different commission tiers from one host: Sometimes hosts offer different commission plans. If you're set on one host, but unsure of which plan to sign up for, this calculator is for you.


2. Comparing commission plans from two (or more) host agencies: This commission calculator is for those who are looking to compare commission plans for two (or more) host agencies. It includes fields to weigh in different fee structures of the agencies you’re comparing.

Here's a quick video to show you how the calculators work for you visual learners!


Here's some more deets:


1. Comparing Different Commission Plan Tiers from One Host:

Many hosts offer different tiered plans for different costs. Is it worth it for you to bump up to a higher tier? To find out, enter the total amount of commissions you earned over a one-year period. You want to enter the full amount before your commission split and/or fees were taken out.

Many hosts offer different tiered plans for different costs. Is it worth it for you to bump up to a higher tier?

Just starting out and not sure what to enter? Use $3,250 as a baseline. According to our most recent Travel Agent Income Report, this is the average annual income for newbies was $3,250 in 2019.

Next, enter in the plan details


Finally, check out your bottom line!


2. Comparing Commission Plans from Two (or More) Host Agencies

Take the same steps as above except you'll have a lot more details for each plan to fill out. See below:


5 Secret Sauce Host Agency Commission Calculator Tips:


1. If you’re unsure of one host's fees, leave it $0 for all hosts so it doesn’t skew your numbers


2. If one host offers a program that another host doesn’t—keep that in mind when looking at your bottom line. It might look like one host has a lot of fees, but this expense may be justified depending on what programs they offer.


3. If a host's program is optional and you won’t use it, don’t add it to the calculator!


4. Don’t forget it isn’t a straight numbers game. How you get along with the host, who their preferred suppliers are, what programs they offer, etc. are all going to vary and what is best for you will likely be different from another agent.


5. Run the commission calculator every ABC. What's ABC? . . . allow me to elaborate


Run the Calculator Every ABC

Most agents will do their due diligence when they first start out, comparing the program costs and commission splits in order to find the best one for their travel agency. But what about later on?

New players enter the market and different programs pop up from time to time. This is especially true when the industry goes through major upheaval (e.g. COVID, 9/11, etc.). Running the commission calculator could save your agency a chunk of change. 

We recommend, at minimum, you run the our calculator according to the ABCs:

nnually

efore any Big Bookings (especially groups)

hanging Host Agencies or Consortia


How Did Your Hosts Compare?

Choosing a host agency or consortia can be a time-consuming and tedious for many agents. I hope our calculator helps make things a bit easier for you! If you'd like us to send you a reminder to check the calculator, we'll send you one every spring. Just sign up below: 

If you're a new agent, make sure to check out our Tips on Finding the Best Host Agency article and sign up for our FREE 7 Day Set Up program to get your agency off the ground and running. 

Questions? Comments? Experiences of using our commission plan comparison calculator? We want to hear all about it in the comments below.

Editor's Note: This article was originally published April 29th, 2018 and was updated with current information in 2020.



About the Author
Bridget Lee - Host Agency Reviews

Bridget Lee

Hey there, I’m Bridget!

Having grown up in the travel industry I can attest, it’s hard to get travel out of your blood once the travel bug bites you! I’ve been working in the travel industry (or traveling) as long as I can remember. My favorite thing? Working with entrepreneurs and digging deep into the data to help others get a clearer picture of our industry.

If you have any questions or are itching to connect, I’m happy to help. 🙂