I just returned from the Travel Agent Forum in Las Vegas. If you haven’t been, it is a great show to learn and network. I moderated a couple of panels and afterwards several agents were asking me about the “legitimacy” of several organizations in the host agency arena. I thought this is a great time to revisit a column I wrote last year on the subject.
Last week, an interesting post on one of the newer travel agent Facebook groups caught my attention.
A person made a very public declaration that she was leaving the group because she only wanted to associate and share ideas with what she considered to be “real and legitimate” travel agents.
What I found interesting is virtually all agents in this group (around 1000) are home based and many are cruise focused. This agent had particularly strong feelings about who was “real and legitimate,” and those in the group who didn’t make the cut.
One of the things I love most about this industry is there are as many ways to sell travel as there are people selling it. For many suppliers, the travel agency distribution channel is just one of many they utilize to fill their ships, buses, and hotel rooms.
When I started a cruise-only travel agency in 1993 after working on cruise ships, I knew it would fill a need. After all, I had just spent years listening to passengers tell me what they liked and disliked about the booking process.
Many of you may be cruise focused, and what you do is widely accepted, however this was not always the case. We were not permitted to join several local and national industry groups because we were not considered to be “real or legitimate” travel professionals. Why not? A requirement of membership was to be ARC or IATAN approved. In other words, because we did not sell airline tickets, we were not accepted as peers in the industry—except by CLIA and the cruise suppliers. Many hotel and tour companies would not even take our bookings because we did not have an IATA number. It was a tough go for a while. We were forced to book most pre and post hotels through the cruise line at inflated prices and with only 5 percent commission.
In 1995, the world changed when the major airlines decided to cap commissions they paid to North American travel agencies. As a result, many retail agencies closed their doors and their agents—unable to find employment—either left the industry or began working from home. Suddenly, the cruise-only model didn’t look so bad and quickly became widely accepted as a legitimate business.
For many years, home-based agents were not considered to be “real or legitimate” because they did not work in a retail office environment. Many suppliers would not recognize them, in large part because they didn’t know how to service them. Enter the host agency model: independent, mostly home-based agents booking under an umbrella company which provided operational and marketing services to members for a portion of the commission earned. This sort of solved the supplier service challenge by giving them a single point of contact.
It wasn’t until the early 2000s that the home-based and host agency models have become widely accepted. A growing number of suppliers now realize the power of home-based agents. In fact, one supplier recently recognized that 50 percent of their sales are now from this segment. This is probably true of many other suppliers.
Like the person who left the Facebook group, you might disagree with the legitimacy of a business model, but that does not mean it is illegal or unethical. Legitimacy is ultimately determined by the suppliers based on how they choose to distribute their products. For example, some suppliers may choose to work with Costco Travel, others do not. Some suppliers will work with travel clubs and network-marketing models, others will not. I was a sales executive on the supplier side—I get it. We had to put “butts in beds,” so we often explored options to sell our product –some more conventional than others.
I can only imagine how much time was wasted in the Facebook group bickering back and forth about who was right. The conversation became quite heated at times, as there were strong opinions on both sides about what it means to be a legitimate travel agent. I ask you to remember this, opinions can change with time and circumstance. Historically cruise-only and home-based agents were not widely accepted by many of our peers or suppliers. Today they make up the majority of leisure travel professionals.
Competition and professionalism takes many forms and until the industry becomes government-regulated like real estate and insurance—which is highly unlikely—the free enterprise system will continue to weed out those without sustainable business models.
I have a long-standing belief that there is more than enough business for all of us. The fact that many suppliers have a growing direct business model is proof that we, as a sales channel, are not maximizing the opportunity.
We need to stop the infighting and become a better choice for the consumer. There are people who, no matter what, will join network marketing firms, travel clubs, and a variety of other business models, just as there are consumers who will only book direct. Instead of debating who’s currently legitimate or real, we should focus on becoming a better choice in the eyes of those prospects seeking the services of a travel professional.
Dan Chappelle helps travel sales professionals achieve full potential by transforming their mindset and focusing on fundamentals to produce real results. He speaks internationally on strategic business development in the travel & tourism vertical. His signature keynote & workshop “Secrets of Selling to the Affluent Traveler” helps organizations, entrepreneurs, sales professionals, employees, and business owners gain meaningful competitive advantage.
His new book “Get Your S.H.I.P Together – The Wealthy Travel Agent Guide to Sales” is now available on Amazon.com in both paperback and Kindle versions. For information on Dan’s education and sales programs, visit www.WealthyTravelAgent.com