We have all read the horror stories of the Joystar agents who likely will never receive their hard earned commissions. This is bad news under any circumstance. But when you combine it with an unprecedented economy and a more competitive market, it takes bad news to a whole other level.
Peter Stilphen, CEO of Coral Sands Travel (a successful host agency) has warned the industry for years about Joystar; but no one listened. Joystar put out a tremendous front with fancy advertisements, rapid growth, an unheard of compensation plan and a charismatic leader. But you know what? Those four traits are the last thing you want to look for when selecting a host. Unfortunately, in order to compete, many other host agencies adopted parts of the Joystar model. And even more unfortunate, is the very real possibility that these host agencies may be in danger of following the same path. So how do you hedge your bets and protect your business when you affiliate with a host?
The first step is to do your homework and ask some hard questions. Here is a list of seven questions to get you started. If a host agency is hesitant or refuses to answer some of them, be very suspicious.
- Ask for at least three email/telephone contacts of affiliated agents? Contact them and ask them all the same questions and see if they match. If you can find a fourth agency affiliate NOT recommended, even better.
- Ask about commission payouts. Monthly is good, less is better. Ask how they treat the commissions between the time they receive them and the time you receive them. Some agencies, like Coral Sands, provide an escrow account to add another level of security.
- Specifically ask if there are any issues with any of their accreditations or business licenses. Remember when Joystar’s Seller of Travel licenses lapsed and they were suspended from CLIA? Remember YTB’s termination from IATAN? All are huge red flags.
- Ask for copies of the appropriate Seller of Travel certificates for your state and any state in which you intend to do business. The biggies are Florida and California, but there are others including Iowa, Nevada, Washington, Ohio, and Hawaii.
- Inquire about their ongoing training. Is it hands on? Or online? Is it completely vendor supported? Or is there a separate curriculum? What are the requirements for initial training? Is there a requirement for continuing education?
- Ask about the money trail. How are commission s processed? Manual submissions and tracking increase the chances for errors or worse. How complex is the program and how much time will it take?
- If you have not received a copy, ask to review the potential agreement. Most host agencies will have the document on their websites; but make sure you get a copy. Paying an attorney a few hundred dollars for a review and opinion will be money well spent.
Make sure you are comfortable with the answers and more importantly the people with whom you are dealing. Humans are a peculiar animal; all too often, we will put aside our gut feelings when presented with a “too good to be true” opportunity. When your gut is not agreeing with you, give this decision a lot more thought.
While each host operates differently and will likely answer the questions a bit differently from their competition, asking these questions will take you far in your search. After all, no one can afford another Joystar.
If you are interested in a list of host agencies to begin your search, the Professional Association of Travel Hosts (PATH) is a good place to start. They also have a good checklist to supplement mine on the road to choosing a good and solid host agency.