When it comes to working with host agencies there are a lot of myths and misunderstandings out there. Over the past couple of weeks I have talked to dozens of agents and heard lots of them. So just call me Snopes because I am going to fact-check some of them for you today!
Myth 1: A host agency can keep you from being hosted with more than one agency. Here’s the thing: you are an independent contractor and you can host with as many companies as you want to. Of course, it doesn’t make sense for most people to have more than one host, but it can be done. It happens most often when agents are moving from one agency to another; but sometimes agents host with one agency for one product (Disney, for example) and another for everything else. However, they can incentivize you to host only with them. They can offer things to agents who are only hosted with them that aren’t available to agents who are dual hosted (FAMs, for instance).
Myth 2: Your host agency can require you to sell certain vendors and keep you from selling others. Based on my answer above you might think I am going to say, nope they can’t do this. But they can. Why? Because you are using their credentials (IATA number, ARC, CLIA, etc.) and they have the right to control how they are used. If these credentials are violated in any way it can substantially damage their business and they have the right to protect them.
Myth 3: A host agency can require you to work certain hours. This is a HUGE no-no and is a violation of IRS policies that distinguish employees from independent contractors (ICs). Any host agency who tries to treat their ICs as employees could face substantial fines from the IRS (and the IRS and state governments are really cracking down on this in the travel industry). As an independent contractor you are free to work where you want, when you want, and how you want. This is one of the reasons a lot of travel agencies don’t have ICs: they can’t control you!
Myth 4: All host agencies charge fees for booking non-preferred vendors. Another common myth that simply isn’t true. I’ve seen some host agencies that charge a flat fee for booking any vendor not on their preferred list (and sometimes it is more than the amount of commission on the booking so you owe them money!), or reducing your commission split if you book a non-preferred vendor. I would venture to say that the majority of agencies don’t penalize you for booking vendors off their preferred list. But also keep in mind that host agencies often encourage you to book with certain providers for very good reasons. And likewise, they steer you away from vendors for good reasons too.
Myth 5: A website provided by your host agency brings in bookings while you sleep. If only this were true! The bottom line is that bookings from booking engines on your website are few and far between. Some agents never even get one. In addition to that, “cookie cutter” websites aren’t good for your online reputation. They don’t do a good job of showing how you are different. You really need your OWN website that focuses on you. It is hard for a host agency can provide a templated website that works equally well for all of its members unless they all have the same specialty.
Myth 6: A leads program is a great way to get your business off the ground. It seems logical: you get inquiries from people who want to make travel reservations and you can help them and get a new client. The reality is that most people who fill out leads forms are shopping numerous sites for the lowest possible price and almost never book with the same agent twice. Because they are shopping multiple agencies, the average booking rate (number of inquiries that actually book a trip) is less than 10% for many agencies. That means 90% of the time you are wasting your effort. Those hours would be better spent on proven marketing strategies to build your business.
Myth 7: The best way to build a travel business is to book everything for the first couple of years and then specialize. I can see the logic behind this way of thinking, but I wholeheartedly disagree with it. My opinion comes from 18 years in the travel industry and seeing lots of agents chose this path. Why doesn’t it work? It’s really hard to market a business that does everything and so you default to using vendor promotions. That doesn’t do anything to market YOU and what you can do for a client. Besides that, it is really hard to “retrain” clients once you make the switch to whatever your specialty is. And in the beginning most agents who follow this model don’t charge a fee, but wait to do that when they specialize. Then they struggle with how to communicate that to clients or end up not charging fees to established clients, just new ones. It becomes messy and you lose out on an important income stream.
I’m sure there are more myths out there, but that’s enough for today! If you have a myth I missed, or wondering if something is fact or fiction, let me know by emailing firstname.lastname@example.org.