5 minute read
A host travel agency is a business offering collaborative resources to smaller travel agents. In exchange for a fee, a host agent will provide marketing, training, back-end technology, payment processing, and other support. This alliance provides smaller home-based travel agents with a one-stop support framework.
The business model offered by host travel agencies can vary, but the general working pattern is the same: The host agency will provide smaller, home-based agents with the apps, booking platforms, technology, resources and support to run a successful travel agency. The technology and support provided by the host generates more revenue for the agent as their bookings increase. And as revenue increases, the success of the smaller agent feeds through to the host in the form of an agreed commission split or monthly fee.
Why Use A Host Agent?
An aspiring new travel agent with a vision to offer unforgettable getaways will possibly lose a little enthusiasm for their new venture as reality sets in; building booking apps, negotiating multiple supplier accounts, marketing, building their client base, and the icing on the cake – competing with the big agencies and their substantial price discounts.
As a sole travel agent, an agent working from home, or a start-up, finding clients and fulfilling the booking process is just one challenge to conquer. In order to succeed, they must offer a fast, seamless booking process, with access to major travel suppliers, and offer prices to rival their competition. They will need to invest in training, accreditations, licensing, administration support and more. But how can they compete without the big budget available to their larger competitors?
Small agents must offer everything their larger competitors offer, with a fraction of the budget. Enter the host agency business model.
In exchange for a fee, smaller agents can onboard a host travel agency and gain access to all of the benefits of being part of a big company.
- Low start-up cost – start-up is fast and efficient if you have access to the resources of a large travel company.
- Technology – access to tested, streamlined, operational software.
- Marketing – gain access to marketing software and benefit from being part of a credible, established travel business.
- Access to deals and commissions – benefit from supplier agreements and pre-existing partnerships, often only available with a minimum number of bookings.
- Expertise – having a ‘big brother’ relationship with your host means that smaller agents can utilize extensive skills and knowledge, showing professionalism to clients from the outset.
- Training – training is often critical as a new entrant to the travel market. As an affiliated member of a host agent, regular on-tap training is available through webinars, conventions and tutorials.
- Licensing and Accreditations – avoid the time-consuming and costly accreditation process.
- Networking Opportunities – mentoring, career development, access to the agent community and the ability to connect easily with peers across the industry will open the door to vast opportunities.
A host agent will offer all of this for a commission split and/or a monthly fee.
It’s Not All About Commission
So you’ve decided to instruct a host for your budding travel agency business. Next – how to choose from the vast array of companies out there…
While the commission is important, striking a balance between the support offered and the cost to the business will give your agency the best chance of success.
If you plan to operate within a specialized market such as the cruise industry, it’s certainly worthwhile partnering with a host with skills in this area. Perhaps they have an app linked to cruise providers, established marketing links, or a wealth of expertise in the cruise industry. Becoming affiliated with a like-minded host is a sensible choice.
Other factors may influence your decision, such as whether you need support in a particular area but not others, such as marketing or finance.
The trick is to identify the support most needed and then match it with the host’s skill set.
Your Questions Answered
Will I still be in charge?
The business is 100% yours. A host collaboration is simply a supply arrangement where the host provides support and resources for a fee.
How much do host agencies cost?
The amount charged varies completely depending on the level of support.
Cost models vary by supplier, so it’s best to check out the small print. Look out for terms surrounding joining fees, monthly fees, and annual renewal fees. Make sure training fees are included, as these can be invaluable and costly for a start-up.
Can I belong to more than one host agency?
You certainly have the right to instruct more than one host. Multiple agencies provide access to multiple resources, which can be invaluable. Also, different hosts have different specialities and target markets, which may benefit your travel agency. The additional overhead from multiple commission splits may be outweighed by increased bookings; cost vs. benefit must always be considered.
What’s the difference between a host agency and a consortium?
In the travel industry, a consortium refers to a group of like-minded travel companies that pool resources and knowledge. An agency belonging to a consortium will be fully visible to suppliers, whereas those using a host will be invisible; revenue will be seen as belonging to the host.
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