Top 10 Benefits of Using a Host Agency
For a lot of travel agents starting their own company, it's hard to tell if going with a franchise, consortium, or a host agency is the right choice. Why use a host agency? What are the benefits of using a host agency? As a person that specializes in that niche, I can tell you the benefits of using a host agency so you can make the right decision!
Before we start, you need to be aware what a host agency is. You also need to be aware that there are numerous host agency business models. Some host agencies provide limited services beyond the use of their accreditation number (more on accreditation options for agencies). Other host agencies provide everything but the kitchen sink. Since different travel agents have different needs, it's important to keep in mind there are many ways to 'host'. More on finding the best host agency for you.
Connecting with host agencies can't be easier! You can go directly to their profile to write them via Host Agency Reviews' Q&A feature. The beauty of this is that tons of agents will also get to learn from your question too!
So, we get that you need to find a host agency that fits the needs of your particular agency, right? The advantages below are based on basic services most host agencies provide. Before you sign up, make sure to confirm your prospective host agency provides these services.
Top 10 Benefits of Using a Host Agency
A host agency should play the role of a part-time bookkeeper at your travel agency. That's a huge benefit of using a host agency. So keep in mind part of your commission cut is paying for a bookkeeper. They can run reports on the bookings you've made without you having to purchase any software. They will issue you commission statements and, at the end of the year, send you a 1099 with all your earnings. The more advanced hosts should allow you to look up bookings, run reports, etc. as part of what they provide.
↳ Ask your prospective host agency if they provide on-demand reports. Make sure to ask if there's a fee. You may also want to ask them how the commission system works. If you have no idea what that means, don't worry. All you're really looking to know is how the commission check gets from the vendor, safely into your pocket . . . from when you make the booking, to how it's tagged to you, to what you need to do to get the commission.
A travel agency's commission level is based on their vendor revenue. A big benefit of using a host agency is that all of the home based agents under that host are seen as one travel agency. If it's a decent sized host, the combined buying power should give you top commissions on all major suppliers. Find your host agency in our host agency list and open their profiles to get an idea of their revenue.
↳ Ask your prospective host agency the commission level of the vendors you'll be booking the most. Note: Commission agreements are confidential so don't expect the host to give you their full list of preferred supplier commissions. Instead, ask for your top vendors.
The business development managers (BDMs) that work with travel agencies have large territories. One of the benefits of using a host agency is that hosts have already established relationships with these BDMs. Many hosts are most likely a larger account for the BDM. So if you have problems with a booking, the sales volume and long-standing partnership of your host will—if necessary—allow the situation to be escalated through the host agency's channels.
↳ Ask your prospective host agency how long they've been in business and their sales figures. This will help to paint a picture for you. Visit our host agency list to find the host agency details below and more.
One of the many benefits of using a host agency is that the top host agencies offer a whole arsenal of technology. Ask if they have a Customer Relationship Management (CRM) tool like Clientbase or ClientEase. Examples of programs commonly offered—often at a better rate than what you could get on your own—are direct mail programs, consumer website programs, corporate booking engines, etc.
↳ Ask your prospective host what sort of technology and marketing tools are available to their home based agents. Ask the costs associated with them. If you're not sure what you need, ask them what tools they recommend for a new agent.
Host agencies are top recruiters of the (much needed) new blood in the travel industry. Because of that, many host agencies will not only offer continuing education, but also a training or mentoring program. It's also common to see a host agency offer online training tailored towards new agents. While it's possible to learn how to be a travel agent without any training, a good training program can hurry you along a steep learning curve and help you start making money quicker. This is one of the major benefits of using a host agency—it's a great gateway into the industry. For experienced agents, hosts often put together their own FAMs for continuing education and may partner with vendors to provide continual continuing education for their agents. Side note: You can find some great info on travel agent training and education in this article as well as more educational materials on our resources page.
↳ Ask your prospective host what type of educational opportunities are available to new travel agents. Ask what type of continuing education is available for established agents. If possible, see if you can sit in on an online training or if they have a recording training you can listen to.
Being a home based travel agent has its advantages but one common complaint is the social isolation. A host agency that cultivates community can ease the isolation by helping you meet other travel agents. These agents are a great source of knowledge to help you build your business and support you as you grow.
↳ Ask your prospective host agency what types of opportunities are available for you to meet other agents online and in person. Do they have a FB group, an online agent forum? Do they have regional or national meetings you can attend?
7. Lower Start Up Costs
Another benefit of using a host agency is that host agencies are typically less expensive than going with a franchise or consortium. It's a great avenue for those new to the business or smaller agencies. Some hosts offer 100% commission plans but typically there is a commission split involved. Even with the split, the advantages of higher commissions and the benefits listed above make it worthwhile for many home based travel agents. For instance, consider the $250/yr you would save by using your host agency's seller of travel number vs. having to get your own.
↳ Ask your prospective host what the total cost would be to sign up and if there are any extraneous fees that you could expect while if you were an agent with them. Word of warning: If the host is paying 100% commission and barely charging a fee, be skeptical. Host agencies are a business and they need to make money somewhere beyond the back-end overrides. Giving everything away for free is not a sustainable business model—buyer beware.
8. Air Ticketing Support
Ticketing air-only travel is not as simple as it seems, and most new travel agencies can't afford the cost or risk of using the Global Distribution System (GDS) to book air-only travel. (Read up more on the GDS here!). Some (not all) host agencies offer airline ticketing support through their ticketing desks and consolidators.
9. Seller of Travel
Navigating Seller of Travel (SOT) laws isn't exactly a walk in a park. There's legalese, red tape and the cost of getting licensing for SOT if agency is located in (or you sell to residents of) CA, IA, HI, WA, and FL. If you go with a host agency who is already registered for SOT under those states, they may be able to extend that licensing to you, the IC! This cuts down on red tape and provides more real estate in your brain for other issues—like building a client base or planning a group trip.
10. ERrors and Omissions (E&O) Insurance
Some host agencies will extend E&O coverage to their ICs. This is coverage to protect agents from costly lawsuits in case a client holds you (the travel agent) responsible for something that goes horribly awry with the trip or booking.
Curious to know which hosts offer E&O coverage? You can use our handy dandy filter on the host list to figure out which host agencies provide this type of support!
There are boatloads of benefits to using a host agency. It's a fantastic way to start up your travel agency and have both independence to run your travel agency the way you want to and also have built-in support. With low risk, low start-up costs, and a community of agents and staff to help you on your way, joining a host agency is a great fit for many travel agents.
If you're ready to get going, sign up for our 7-Day Setup Travel Agency Challenge:
It provides daily emails for a week that will walk you through the steps you'll need to take before signing on with a host!