I would like to start my own travel agency business. Do I have to start working with a host agency?
First off, welcome to the travel industry – we love newbies!
The short answer is no, you technically don’t have you to start working with a host agency when you enter the industry. The typical paths taken if an agency doesn’t work with a host is to align yourself with a consortium/franchise or to go independent. However, I’m a huge advocate of host agencies and feel they are the best entry point for most agents. Here’s why:
One of the most attractive reasons to join a host agency is the lower start-up costs and higher commissions. The start-up costs of a host agency are almost always more affordable than a consortium or a franchise.
Beyond it being a lower upfront investment, you have the added benefit of earning higher commissions from the get-go. Even though your commission levels will vary by host agency and vendor, for the most part, the commissions will still be higher than what you could get on your own.
Some agents are hesitant to use a host agency because the host typically takes a commission cut. Before you get to sore over lost money, remember that the host agency is allowing you to earn higher commissions. Do the math on what you’d be earning on your own and compare it to what you earn with your host.
In financial terms, aligning with a host agency is a great fit for people wanting to start an agency but not assume a lot of risk.
Cost and commission levels shouldn’t be the only deciding factor on whether to go with a host agency. When you join a host agency, you are essentially choosing a business partner that brings a lot to the table. They bring access into their higher commissions, established supplier relationships, technology, training, and marketing programs.
If your host can offer you a discounted CRM or blocked group cruise space that you can book but they manage, that’s saving you time, money, and helping you get more clients.
All of these resources they provide have a value to your business so don’t forget to weigh that into your decision.
Another reason I think host agencies are great for those just starting out is the community. Many of the agents joining host agency are new small business owners, the majority of them home based.
Joining a host agency gives you access into a wealth of knowledge and support from peers just like you. Everyone in the network is either currently in your shoes or has walked that walk before.
Starting a small business is tough but you’ll have a higher chance of success when you have a supportive network that can share what worked for them and what didn’t. I’d never discount the value of being able to talk shop with others and be inspired by the successes you see.
There are a few situations where a host agency may not be the best fit but for most agents, a host agency is a perfect solution to build your business quickly and inexpensively. I have limited space in this column so if you’re still thirsting for knowledge, I’d recommend checking out my article: The 7 Benefits of Using a Host Agency.
And for the rest of you, if you’ve got questions on host agencies or getting started in the travel industry, drop me a line: Stephanie@hostagencyreviews.com
Until next time,
After a 6 year stretch as director of a national host agency, Stephanie Lee started Host Agency Reviews – a resource website with host reviews and articles to help travel agents start and grow their travel agencies. She was awarded the ASTA’s Young Professional of the Year and Travel Agent Magazine’s 30 under 30 award. As time marches on, the dates of the awards have been surreptitiously left out to avoid drawing attention to the fact she’s aging. She’s not.