Written By: Tom Ogg
When a new agent is just starting out they are confronted by a good number of decisions to make while they launch their business. Launching a travel business independent of a host agency is possible, but also very time and resource consuming. This might be a good choice for someone that is already set up with a supplier, has a history of handling transactions and clients and also has a back office operation at their disposal.
Building new travel businesses is complex and unless you have quite a bit of experience operating a travel agency, your best choice is to work through a host agency to get your business up and running. You will save a considerable amount of time on the operations side of your business and be able to spend the lion’s share of your resources on the thing that it needs the most, and that is marketing.
In addition to the immediate jump start operationally you will find that it is considerably less expensive to start up your operation by using a host than it is to go direct. Here are some excellent reasons to start your operation with a host agency rather than starting up independent of a host.
Ease of Entry: Using a host agency makes starting your travel business easy because the host agency has all of the support to get you going immediately. You can actually sign with a host agency and start selling travel on the very same day with confidence.
Cost of Entry: Since your host agency already has their operation in full business mode, you simply tie into their operation, which reduces the need for you to invest in establishing your business as a start up.
Knowledge and Expertise: While you are in business for yourself, you are not by yourself. In fact, host agencies bring a level of knowledge and expertise to the table that will enable you to sell with confidence. Having a knowledgable support staff behind you for support makes all the difference in the world when it comes to making sure that your clients understand that you work with professionals.
Training: Most host agencies offer training opportunities whether its in the shape of national conventions, regional seminars, webinars, one-on-one mentoring or tutorials. The training and mentoring host agencies offer in itself is critical for your success as a newer agent in the business. This alone should help you make your decision.
Mentoring and Business Coaches: Many host agencies offer mentoring for newer agents and business coaches for established agents. These resources can keep you on track and really off the kind of support that solo agents need. If you are working by yourself in a home based location having either a mentor or a business coach will really help you succeed.
Commissions and Overrides: Host agencies act as aggregators for suppliers who pay extra commissions for revenue volume. While an independent agent may be able to gain a full 10% commission from a supplier, it is likely that a host agency may be receiving 16% or more based on the total productivity of their network. If your host splits commissions on a 80/20 split, that means that you would be earning a 12.8% commission on the same sale. This is a 28% increase in your earning power.
Supplier Relations: Since you will be working through your host agency, you access all of their suppliers, as well. This includes their preferred suppliers, cruise lines, tour operators, hotels and resorts and every other aspect of selling travel. By aligning yourself with a quality host agency you bypass the need to open accounts with each supplier, which can be quite time consuming.
Back Room Accounting: Many newer agents do not put enough thought into the need for a sophisticated accounting and commission follow up system. Having a sophisticated back room operation with your host agency not only frees your time up to sell and market more, it also maintains the necessary control over your business.
Technology: Many host agencies offer a full range of technology solutions from consumer branded websites to CRMs to GDS access. Technology can be a very important element of your relationship with your host agency, so make sure you understand what they are offering and what you may need.
Competitive Pricing: Most quality host agencies operate group departments for the purpose of obtaining the best possible pricing for cruises, as an example. Being able to access group rates for individual clients propels your business into success because you are competing with all of the large distribution networks that do the same thing.
Sales Leads: If you would like to have your host agency provide leads for you to work on, many hosts can provide leads. These are especially attractive if you do not have a large book of business and would like to build your revenue quickly.
Perks: Host agencies can be huge generators of revenue for many suppliers. Suppliers respond by including the host agency in promotional events to show off their products. Fam trips, cruise ship inaugurals, attractive promotional rates at hotels and resorts are all a part of what you might be offered through a host agency. Of course, these benefits go to the agents that are productive for the supplier.
Relationships and Networking: Besides the staff that the host agency provides for your support host agencies always have a good number of other independents that you will probably meet and network with. Having access to a network of agents is very beneficial for your business, as they may provide knowledge, support and friendship.
As you can see there are many benefits of using a host agency. The trick is to find the perfect host for you and your business. Be sure to read and watch the other tutorials here to help you along your way.