|What's In Your Wallet?
Former Host Agency Owner &
Travel Educational Instructor
Do you ever feel like you are a major character in a Capital One commercial? Well, let's hope you never see a group of barbarians bearing down on you, or a huge boulder rolling your way, but could there be someone else this applies to?
What is in your wallet?
Are you or your Hosting program keeping your wallet on a diet? Do you feel like your wallet is shrinking instead of getting fatter no matter how hard you work? Do you feel like you are paying so many fees that you never see the light of day? If so, you are not alone.
While attending a travel convention recently, I had the opportunity of meeting many agents from across the country and quite a few had complaints regarding the fees collected by their Hosts.
Some agents also expressed concerned regarding what they see as "shrinking commissions" paid by their Hosts, along with high membership fees. Yes, some Hosting programs are nothing more than card mills, but there are several agents affiliated with what we consider mainstream Hosts who are feeling more than their share of the pinch.
While I am thrilled to see more and more agents deciding to leave some of these card mills, I am concerned about those agents who feel they need to leave what should be a good Hosting program because they believe they can't make a profit, given all of the fees combined with low commission.
Most of these agents leaving their Hosts are either getting a CLIA or a travel seller's identification number through NACTA or OSSN. This is fine, but what we are going to see are a lot of small independent agencies struggling to grow their commission levels and compete with the larger agencies. It is tough to go it alone and my hopes are that these agents who are breaking off to do just that will do extensive research and align themselves with a Hosting program that will support them when support is needed.
Another concern some of these agents have is with discounting and the encouragement some receive from their Hosts to do so. (Unfortunately, this is not isolated to Hosts as I found out when I sat in on a recent LEADING travel membership organization and the lecturer spoke of discounting to clients.) Prior to completely severing ties with your current Host (especially if you are affiliated with a strong and reputable one) be honest with them, address your concerns and ask if you can work together to resolve some of these issues.
For example, if your issue is not receiving commission payments in a timely manner, stress that this is income you count on for your monthly support and late payment is creating difficulties for you in meeting your obligations.
For a Host that treats its independent agents as employees, remind them that you are a contractor and not an employee. If they become angry and threatening, walk away.
Are you another reason your wallet is shrinking? Don't rely on your Host to support you. You love the business you are in and have a passion for the work you do. You care about your clients, but don't think new clients will just come into the fold. Not true. If you want good sales, go out and get them!
You qualify your clients to find out their interests, now do the same with yourself and tap into that interest and grow new business. Join some business support and lead groups. If you are a wine enthusiast, tap into that market by visiting local wine stores, wine tasting groups, etc. and talk to the owners or managers about working together on a promotion. Most agents are friends with other agents, so why not get together and do a joint promotion and split the commission? I've done it many times. It does work and can be very profitable.
Agents who are dissatisfied with their current Hosting program need to stop and take stock of which direction they want to go. One of the first things you need to do is sit down and create a game plan. While you don't need to do a full business plan, you do need to give yourself direction.
Decide what your overall goals are for the immediate future and make projections for at least three years down the road. Determine the best course for reaching these goals. In order to do this, you will need to compare the costs of going it completely alone (including lower supplier commission levels), or affiliating with a new Hosting program.
Research, research, research. Find out the costs of the Hosting programs you are interested in. It is perfectly acceptable to ask the commission levels each Host has with the suppliers. Find out what the initial fees will be as well as what the yearly renewal fees will be. Are there going to be monthly fees? What about mailing fees? Get everything in writing.
Will you be penalized if you do not reach a specific goal, or terminated by the Host? Express your concerns to any and all Hosts you are interested in. Be honest with yourself. If a Host has specific requirements in sales and you know you will not be able to reach those goals, don't affiliate with that Host.
There are many wonderful Hosting programs out there and if you align with the right one to fit your particular needs, you can save yourself a lot of work and costs. Don't be afraid about talking to agents who belong to different programs or to those who have gone it alone.
If you are still intent on gaining your complete independence, please investigate membership in a consortium. I cannot begin to stress the benefits of a good consortium, such as marketing dollars, special promotions for your clients and support and assistance with supplier issues.
Some agents have expressed a bit of confusion in differentiating between a Host and a consortium. Please keep in mind that when you align with a Host you use the Host's affiliations. The Host is the one that has the supplier reps for their particular state. When you have your own CLIA (or other travel seller) number, YOU have your own affiliations and no matter which consortium you join or do not join, you will still have your own identity and your own supplier reps. A consortium is primarily a membership marketing association and a good consortium is well worth every penny of membership.