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Marketing, CreativeWhat is a Host Agency and why should I join one?
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what is a host agency, what do they actually do, why you need one and if you are going to pick one, how do you choose the perfect fit for you? #1, a host agency is already set up. They already have relationships with travel suppliers so here's how commission works in the industry if you sell a #1, you want a host who is looking out for you and the success of your business. this will be a commission only position. Now the good thing is while you're not making hourly you will make a larger Lion Share of the commission, you will make bonuses, vouchers, you can charge service or booking fees, and other types of payments. Essentially, you are a contractor working under a travel host agency. It's very much like you have your own business but you're working under the umbrella of a host agency. When you are in a contractor position your host cannot treat you like an employee. It's not their fault it's just the arrangement of how that model Works in the travel industry today. so they can't do things like give you health insurance or 401K benefits, or other things a company would typically provide an employee. they can't require you to work a certain schedule independent travel agents have more flexibility to structure their income model compared to employed agents. By charging fees, specializing, and leveraging partnerships, they can maximize their earnings beyond just relying on supplier commissions alone
A host agency is a travel agency that is typically airline accredited by ARC (Airlines Reporting Corporation) which permits them to issue airline tickets specifically and may also have a CLIA (Cruise Lines International Association) number. Some independent advisors will contract with a host agency for services that may include:
- Use of the host's industry identification number, ARC for airline ticketing purposes through the host's Global Distribution System (GDS) used for supplier comparison shopping and booking
- Use of the host's industry identification number (e.g., ARC, CLIA or IATAN, etc.) for commission tracking purposes
- Supplier commission overrides
- Quality control
- Administrative support which may vary by host agency
In return for providing these services, the independent advisor pays a fee, usually in the form of a monthly subscription fee or as a percentage of the advisor's commission. It is the host agency's identification number that identifies the agency with an industry supplier so that air tickets can be processed via ARC and commission payments can be prepared and paid.
Since a share of the profits are paid directly to the host, the host is usually obligated through the independent contractor agreement to forward payment to the independent advisor as stipulated in the contract. Most often, compensation paid by the host to the independent advisor is in the form of a commission, expressed as a percentage of the base fare. Common splits between an independent advisor and the host agency are 70/30, 80/20 and/or 50/50.
There are also independent advisors who have their own identification numbers and do not work through a host agency. These are often advisors who have moved their traditional travel agency business to their home. Some of these advisors have given up their ARC airline accreditation - which can be costly to obtain - in lieu of one of the three non-air travel agency identification numbers discussed later in the document.
The key benefits to join a host travel agency
The key benefits, for someone wanting to start as a brand new independent travel agent or an existing agent include:
- Access to exclusive deals and higher commission rates from suppliers. Host agencies can leverage their larger volume to negotiate better rates and commissions that they can then pass on to their affiliated agents.
- Reduced overhead costs by sharing resources like booking systems, CRM software, and group insurance plans. This allows independent agents to access enterprise-level tools and services without having to pay for them individually.
- Expert guidance, training, and industry support from the host agency. Host agencies provide ongoing professional development, mentoring, and access to industry networks that can be invaluable for independent agents.
- Marketing and branding assistance to help raise the agent's profile and attract new clients. Host agencies often provide marketing materials, websites, and other resources to help their affiliated agents.
- Ability to access group bookings and niche travel segments that can boost earning potential. Host agencies can open up access to lucrative group travel and specialized markets.
- Increased credibility and recognition by being affiliated with an established host agency brand. This can give independent agents more legitimacy and trust with clients. The tradeoff is that independent agents have to share a portion of their commissions with the host agency
Why do travel host agencies exist?
Let's say you sell a Sandals Resorts vacation. Sandals Resorts has to know where to send that commission check because you are not a credentialed travel agency. As an individual agent, they can't send the commission check directly to you, they're going to send it to whoever has the correct credentials and who is registered as an agency in their systems. The host agency is then going to collect the commission and they are going to pay you your portion so the host agency, they already have their credential set up and they have already taken the time to register with hundreds if not thousands of suppliers they are ready to sell.
Learn more about this by signing up for one of our Online Travel Agent Academy Courses.
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