Host Agency Commission Plan Comparison Calculator [+Infographic]
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 commission crash course? Skip this section and go directly to our commission calculator by clicking the button below.
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 Advisors, 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.
There are lots of reasons travel advisors 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 applying for an accreditation.
Just to give you a ballpark idea, 18% of agents reported having 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 joining a host agency), 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? HAR's Travel Agent Booking Basics 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 an 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!
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 Split Structures
There's ~200 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 commission 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 are 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? According to our most recent Travel Agent Income Report, this is the average annual income for newbies (0-2 years experience) was $11,694 in 2022.
Next, enter 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:
A nnually
B efore any Big Bookings (especially groups)
C hanging Host Agencies or Consortia
How Did Your Host(s) Compare?
Choosing a host agency or consortia can be time-consuming and tedious for many agents. I hope our calculator helps make things a bit easier for you!
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 for Host Week and republished on date posted above.
