Host agencies and an inconvenient truth | TravelResearchOnline

Host agencies and an inconvenient truth

I have a friend who once joked, “I’ve decided to stop chasing those get-rich-quick schemes to concentrate on the get-rich-instantaneously schemes.” I think of him from time to time when I happen to come across yet another pitch from a host agency.

Now mind you, I have nothing against host agencies. They fill a valuable role in the travel distribution system and they can be invaluable to home-based travel agents just starting out in the industry.

But make no mistake, they are profit-making enterprises whose business model demands that they maximize their income, which means maximizing the number of agents they host, which means marketing and advertising, preferably marketing and advertising that gets people to open their wallets — NOW!

In this respect they are no different from a beer company and, just as a beer company will run ads suggesting that if you drink their brand of beer you will find yourself on the beach surrounded by bikini-clad babes, host agencies run ads and put up websites that imply that, if only you’ll sign up with them, you will travel the world in style, sailing on luxury cruises and staying at fancy hotels in some of the world’s most romantic and exciting destinations. Well maybe.

Actually, in the host agencies’ defense, you are far more likely to enjoy fantasies like that if you become a travel agent than you will by drinking beer, but there is nevertheless a gap between the image and the reality.

Behind the glossy imagery of these host agency marketing pieces lie some inconvenient truths, if I may borrow a phrase from Al Gore.

To cite just one example, selling travel takes time. If you want to promote a group cruise, it’s a good idea to start working on it a year in advance; some say 18 months. If you want to sell group cruises around a popular “pied piper,” you must factor in the time it takes to find that person and, once found, convince him or her that committing to a cruise a year down the road is a great idea.

When (perhaps if) that cruise becomes a reality, you must wait a month, maybe two, after the ship sails to reap your reward. So it is fully possible that a single cruise could take two years, from planting the seed in a pied piper’s imagination to cashing the commission check, to bear fruit.

That’s what sales pros call “the pipeline.” When I trained salespeople in the B-to-B sector, we talked about it a lot. It’s a useful metaphor that can be both daunting and reassuring. Daunting because the payday is down the road, reassuring because, if you do your job properly and keep your pipeline filled, you will be able to predict, often with uncanny accuracy, how big your commission check will be 12 months hence.

Most professional salespeople I worked with found the pipeline metaphor far more reassuring than daunting. Now that I am training people to become productive home-based travel agents the reception is somewhat different. Daunting beats out reassuring by a wide margin. But my feeling is that it is better that people understand how the business really works before they sign up with the first host that tickles their fancy.

The fact is that every travel sale involves a pipeline. However, not all pipelines are as long as the somewhat extreme example cited above. Some in fact can be quite short.

That’s why I encourage new agents to make an effort to sell simple products — hotel stays, rental cars, fly-drive combos — for travel just weeks away. Another good way to get your feet wet is to use the “do you want friends with that?” technique to put together a quickie cruise or tour with friends and family, maybe one of those “irresistible” last-minute offers. That way, the new agent jumps right into product research and doesn’t have to wait too long to see a tangible reward for her efforts. Even if they only succeed in getting mom and dad or one other couple to go along, often they’re ahead of the game.

Unfortunately, I know a lot of would-be agents get all pumped up by the marketing, join up, and when they discover that payday is a long way off get discouraged and ask the host agency for their money back, only to discover that it’s gone forever — just another inconvenient truth about host agencies.

Kelly Monaghan, CTC, is a writer and publisher who has been covering the home-based travel agent scene since 1994. Prior to his entry into the travel industry he was a sales trainer for major companies such as AT&T, Arrow Electronics, and Brinks and wrote widely on sales and marketing for a number of professional publications. His Home-Based Travel Agent Success Course  has been endorsed by OSSN and The Travel Institute. His publishing company, The Intrepid Traveler  specializes in Orlando area attractions and offers discounts to travel agents who wish to use its guides as gifts or premiums.

 

  2 thoughts on “Host agencies and an inconvenient truth

  1. Kelly – a good article, but I’m not sure this is just a host agency issue. Almost all entrepreneurs suffer from a nearly incurable degree of optimism and romanticism. We only realize how naive our earliest visions are after reality walks us around the block. Nothing succeeds like determination and persistence. Those twins keep our optimism and romantic ideals in line. ~ Richard

  2. Greg Reese says:

    Kelly – You really give all Host Agencies the same “broad brush” approach, which is misleading as no two host agencies are alike. We are currently with a Host Agency that truly does focus on the success of their agents. Yes, I agree that by doing that it provides a great income source for them, however, the last thing they do, both in their advertising/marketing and in dealing with their agents, is make promises that by joining up with them, we will see the world and live the life of luxury. In fact, they do an excellent job of educating that travel professional hopeful on the realities of when you can expect your commission check, the amount of work you’ll need to put in to your business to be successful, and that you aren’t going to start off by earning a million in your first year before they have you sign up. You are also implying that as a hosted travel agent, we wait for months on end after travel has ended to see our commissions. That is not true either, we receive our commission checks, even with groups, just as quickly as our non-hosted counterparts. There is a great deal of benefit to being a hosted agent, especially if you team up with the right host agency, which means doing your due diligence before you sign on the dotted line. We have been with two host agencies, the first we soon realized was not a good fit for them as they were more focused on the experienced agent. Our second host affiliation has done wonders for us and our business has grown tremendously as a result of their genuine interest in our success. We have a win-win situation with our host agency in that it provides us an inexpensive way to start our own business, doing something that we absolutely love doing, and gives us a world of tools at our fingertips to use to continue to grow and build our business. The success of the travel professional is dependent on the amount of work the travel professional is willing to put in to growing their business. Your article is implying that the host agency will slow that growth because their focus is on their own bottom line and that if you just strike out on your own, you’ll do better. Again, the success of the travel professional lies, regardless of being hosted or not, lies with how much effort that travel professional puts in to their own business.

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