ARE HOST AGENCIES TRANSITIONING?

During the seven 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. Too often 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.

Most of us know what happened as a result of the infamous JoyStar failure and the coming failure of YTB and its ever changing business model. Many of the suppliers who did recognize these business models didn't really care about the consequences these agencies would have on both suppliers and travel agents. Greed was the primary motivator in hanging on to these companies. We all know that "pure greed" is never the answer. It has a tendency to bite you in the butt when you least expect it.

The Host Agency, which did begin as a "renter" of travel agent credentials has certainly come a long way in the past 7 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 staple of today's legitimate Host Agency business.

All Host Agencies claim to be number one or the best. They offer more programs, 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, agent friendly technology and marketing programs, honesty and integrity and just doing what is right for your affiliates. All this adds up to a superior Host Agency.

Many 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 and credit card fraud. 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. Many multi level marketing companies also provide a travel agent photo ID card allegedly giving the holder access to deeply discounted fares or rates.

The affiliates of the MLM/card mills or Referral Travel Agents as they are commonly called, originally numbered in the hundreds of thousands. There's an MLM affiliate party coming to your neighborhood soon, if it hasn't been there already. However, in the past two years these numbers have dwindled considerably. The consumer considers the MLMs 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 I was the original founder of an organization known as PATH. PATH was created to represent the legitimate Host Agency. However, in recent times it has become a reactive organization as opposed to a pro-active representative of the successful Host Agency model. Despite relative inactivity, PATH remains as the only organization serving Host Agencies. Please also remember, although there are good Host Agencies as members of PATH, there are other equally good Host Agencies that, for their own reasons, choose not to join PATH. Coral Sands Travel, America's Vacation Centers and CruiseInc may be the most notable.

I know it is very difficult, especially for newer travel agents, to know where to find good, stable Host Agencies. One site to check out is www.choosingahostagency.com or go to my host agency website at www.americashostagency.com where there are a great many links for you to get straight forward answers. You can also ask me personally about any Host Agency and I will give you a truthful response at host@coralsandstravel.com. I won't even try to sell you on Coral Sands Travel.

The comments and opinions written above are my own and not those of my company or any organization.

Comments

[John Doe]

If you were one of those agents that was hit by the fall of JoyStar, I hope you are awarte of the newest scandal in the industry.

http://articles.orlandosentinel.com/2010-02-10/news/os-career-academy-raid-20100210_1_federal-agents-financial-aid-records-and-computers

The Galiano Career Academy,located in Altamonte Springs Florida, is also owned by the Gagliano family, owners of Travel Planners International. If they are mishandling monies at their school, I fear to think what is going on within their host travel agency. Google "Galiano career academy raided" to learn more.

[Sina]

There is a big difference between MLM, Card Mill, and Pyramid Scheme. Either stop talking about them or get the facts. I won't do your homework for you. It's called investigative journalism. Try it.

[Peter Stilphen, ECC]

Sina,
The State of California calls it a pyramid scheme. An MLM is a legal pryamid scheme until proven otherwise as Ca did with YTB.

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This is so helpful! Thanks much. I have learned a lot. I am working on opening an online business through multiply but was doing researches first about how it’s going to work. This site helped me a lot. God Bless

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