ARE HOST AGENCIES ON THE RIGHT PATH? by Peter Stilphen, MCC

During the four years I've been involved with the Host Agency segment of our travel agent distribution system, I have seen many Host Agencies come into the picture; each one with a different business model.  I've made it my business to learn as much as I can about Host Agencies because that's my business, they are my competitors for the most part and I can also learn from them.  Once in a while I see business models that I know won't work in the long run and those are the ones that will eventually affect the payment of commissions to their affiliated agents.  I generally speak out about them because a sudden demise of any Host Agency will have lasting effects on all of us.

The Host Agency, which did begin as a "renter" of travel agent credentials has certainly come into its own in the past 5-6 years.  It's business model now offers a myriad of programs, technology tools, marketing programs and Internet sites for members containing all sorts of training, booking engines and other travel agent bells and whistles.  The above has become the staples of today's Host Agency business.

All Host Agencies claim to be number one or the best.  They offer more programs and higher commission levels. But when it comes right down to it, it's what each one offers in the form of camaraderie with their affiliates, the individual support levels, honesty and integrity and just doing what is right for your affiliates.  All this adds up to a superior Host Agency.

Most Host Agencies do not have "newbie" programs and those that don't are not advancing the home based independent travel agent segment.  We all need to bring in new blood to this industry.  Most Hosts believe it is not profitable to accept "newbies".  That's a total myth.  Of course, you must charge start up fees and even have a lower commission split but we all need to bring in new travel agents.  There are thousands of new travel agents coming into the business but are joining the multi-level marketing agencies because there aren't enough of us offering "newbie" programs.  There is also potential additional liability in bringing in "newbies" but this also can be reduced substantially with the proper safeguards.  I realize the ARC accredited Hosts have unique problems especially with runaway debit memos.  This requires even higher safeguards and even removing the ability to make airline reservations until the proper training is in place.

As in any business, there are the scalawags that hurt the other Host Agencies trying to operate a successful business.  As I mentioned above, there are Hosts whose business model gives away the store, so to speak.  The old saying "I'll make up my losses by doing more volume" won't work either as some Hosts believe and are discovering.  What is the point of growing sales to magnificent heights if the dollars that flow to the bottom line more than evaporates on the way resulting in a deficit.  I don't care if you are a graduate of Harvard Business School, an investment broker or Houdini.  If the bottom line remains a deficit, you must make adjustments or the ship will eventually sink.  I've noticed that some Hosts whose business model I questioned are beginning to "nickle and dime" their affiliates to make up for losses.  At this point it is too late.  The cat is out of the bag so to speak.

In recent years due to the surge of the home based travel agent and the usual search by consumers for cheap vacations, more and more multi-level marketing companies are entering the scene making promises of fantastic commissions, travel perks and discounts that even a real travel agent can't earn and other business opportunities that are more about recruiting others into the program and even consumer booking websites that promise you large earnings while you sleep.

The multi-level marketing companies also provide a travel agent photo ID card such as CLIA's photo ID card giving the holder access to deeply discounted fares or rates.  Many of the MLM's still provide their own photo ID card resembling the coveted IATAN card.  The MLM's have been pushing the easily obtainable CLIA card because it offers more credibility than their own issued card.

The affiliates of the MLM/card mills or Referral Travel Agents as they are commonly called, number in the hundreds of thousands.  There's an MLM affiliate party coming to your neighborhood soon, if not already.  The consumer considers the MLM's as Host Agencies not knowing there is another side of this travel agent distribution system and the legitimate Host Agency.

It is imperative that successful Host Agencies unite and define themselves.  A couple of years ago an organization known as OATH was founded.  During the months following the birth of OATH and due to the input of many Host Agency executives, OATH evolved into PATH, Professional Association of Travel Hosts.  Today PATH comprises 23 of the finest Host Agencies and is still growing.  These Host Agencies are the "who's who" of the travel industry and can be found at www.path.travel.com.

There are the naysayers out there who don't believe there should be a code of ethics and standard practices for Host Agencies or are just waiting around for the final verdict on this new organization.  PATH has arrived and with its present 8600 member Host Agency affiliates, the suppliers are beginning to take notice.

PATH is not just about practicing ethics; it is about enhanced training and education to its affiliates and improving communications between the suppliers, Host Agencies and its affiliated members.  Without organizations like PATH, outside elements such as the rise and influence of the MLM's will devalue the purpose of the legitimate Host Agency as well as the travel professional.  We need to define ourselves through PATH.  Additional information about PATH may be found at www.path.travel.

Comments

[global resorts network]

i find that discount membership travel is going to replace travel agents

From Peter

When you discover what you are talking about give us another try.

[Sina]

It seems that PATH is out of business. All their Website domains are expired. How credible are they again?

from Peter
They simply retired domains that were not needed.

[James]

This is the website address for PATH. http://www.path4hosts.com/

[Hosting]

This is the website address for PATH.http://www.ecns.ltd.uk/