Travel Agent ICs (Independent Contractors) are like month-to-month renters:
- ICs don’t own their host agencies.
- ICs can move with as little as 30 days’ notice.
- Host agencies can end the relationship with as little as 30 days’ notice.
- ICs can rent as many “homes” as they wish.
Some host agency executives treat signing with several agencies or dropping one in favor of another as an indication of disloyalty on the part of the IC. Nothing can be further than the truth. This week’s column will discuss several legitimate reasons for changing horses or adding a host agency to your herd. There are many good reasons why an IC should become affiliated with multiple host agencies.
Compensation & Incentives
Whether you’re getting 70% or 95% commissions, you probably work just as hard and use the same knowledge, experience, and contacts. Ditto for incentives such as cash bonuses and fam trips. Some ICs will “follow the money,” unless they have good reasons for staying put. If there aren’t clear-cut measures for increasing commission rates and providing other incentives, ICs will be tempted to sign with another or additional host agency whose commission policies are more transparent and attainable.
Groups
ICs can often multiply their income by having many clients join pre-existing groups composed of clients from the same host agency or travel consortia. Clients benefit through lower prices, more amenities, and sometimes meeting those with similar interests. With some large host agencies or those who are members of consortia, such as Signature or Virtuoso, there may be more opportunities for ICs to have their clients form or participate in groups. This, more than nearly all other factors, can help ICs to improve their “bottom lines.”
E&O Insurance
Errors & Omissions insurance is necessary for all ICs; especially those who have signed Personal Liability assurances with their host agencies. E&O policies protect you in cases where anyone brings legal action against you because of things you did or didn’t do. Many E&O policies start at around $300 annually, but some host agencies will pay the annual cost. Consult a licensed insurance agent or a lawyer to determine your insurance needs. You may also need a general business insurance policy that protects you against other unforeseen events.
Referral Programs
A few host agencies that widely advertise their travel offerings may pass customer inquiries to ICs that don’t have sufficient followings to succeed on their own. Some host agencies claim as much as 70% of the commission for passing on these leads. This can be a bad deal for ICs since they still must pay their other business expenses before seeing a profit. If you’re considering using host agency leads, speak to some ICs already doing this. You might be better off seeking positions as a full-time or part-time employee.
Specialties
Some host agencies seek general-purpose ICs who handle various products and clients. Other host agencies specialize in cruises, small luxury tours, or clients who seek vacation bargains. Be sure you have the knowledge and booking experience that most of their clients expect. It also helps if you traveled as a paying passenger on similar trips before signing up with a host agency with narrower client needs.
Booking Flights
Some host agencies connect their ICs to airline computers via Global Distribution Services (GDS) such as Sabre. This permits ICs to take full control of the booking process. Others book flights by connecting online or by phone with a host agency GDS; while others expect you to contact the airlines directly. Since using a GDS is an arcane specialty and may include some substantial fees, booking through the host agency’s GDS or directly with airlines may be the best answer were it not for delays waiting on “hold” for long periods of time and fees you may be reluctant to pass on to clients. Be sure you know how you will book flights before deciding on a host agency.
Advertising
Some host agencies send mailings or email blasts several times weekly using their agency name and yours. Others seem to be on a monthly or seasonal schedule except for mailings initiated and paid by the IC. Other advertising is done at the consortium level or by individual cruise lines, hotel groups, or resorts, which may or may not include the IC’s contact information. This is another area that behooves you to know the game before becoming a player.
Consortia
Consortia such as Signature or Virtuoso, are providing more significant value as host travel agencies evolve. The best play key roles in marketing, training, technology, negotiating with suppliers for higher commissions and amenities, and using automation to book many trips. With the better consortia, training & certification are among their most valued services. Other consortia provide services of a much more limited scope – at least for now. We’d hope that as their host agencies grow, their consortia services will become more essential.
Training & Certifications
It used to be that ICs would have to devote considerable “seat time” to master their agency’s products and protocols and become certified experts in cruise lines, destinations, and properties. Now self-paced video instruction provides most of the training and certifications. Industry-wide groups including Signature, Virtuoso, and CLIA provide the most noteworthy training and certification programs. Some host agencies provide their own instructional videos and “badges,” especially as their count of ICs increases from hundreds to thousands. Don’t sign up for any host agency whose training programs and technical support don’t meet your needs. With software and destinations changing each year, training and technical support are among the most important considerations you will face.
Websites
Nearly all host agencies have their own website; some include your name and contact info on the version served to you and your customers. Other host agencies include a website for every IC with choices of specials, providers, and some content you create. Some host agencies also include customized dedicated websites for those who pay for the top tier of service plans; others charge for customized websites or bundle them into the top-tier price. A custom website is a mixed bag of responsibilities and goodies. While it’s aimed at the clients you want to attract, it can be a daunting responsibility to ensure that the website is always up to date. Also, any kind of website can include booking systems for cruises and hotels that can (theoretically) generate commissions from site visitors while you sleep.
Advanced Automation
With the advent of AI software, expect host agencies and consortia to send compelling emails to your clients and complete many booking tasks automatically. (“Hey Claudia, give me a list of all flights offering 6 Premium Economy seats from Boulder to Sydney on January 12, 2024, with 1-3-hours between legs; and offer four-star hotel deals in the Rocks for two days before the flight. List these in order of total cost for two adults and two children between 1 and 5 years old and send the result out to my client.”). These systems will save untold hours of time, generate income from sources you never thought of, and make some host agencies an even more attractive choice.
Unforeseen Events
Your elderly relatives used to admonish you, “Don’t put all your eggs in the same basket.” There’s no telling when a less hospitable larger travel company will buy up the agency you’ve loved for the past three years and changes some of the features or staff that made it special. Or maybe your host agency goes on a cost-cutting binge and denies you the next rung in the commission ladder. Instead of griping about these changes, give yourself more options by switching host agencies or taking on another.
This column has focused on several reasons you might want to add or change host agencies. In the next Point-to-Point column, we’ll focus on strategies for finding new agencies and the possible consequences of doing just that.
Dr. Steve Frankel has cruised on most of the Seabourn, Silversea, Crystal, Azamara, Oceania, Regent, and Windstar ships. He owns Cruises & Cameras Travel Services, LLC. It is affiliated with two host agencies with different consortia. Conde Nast Traveler magazine has recognized him as a Top Travel Specialist and he’s a Signature Travel Expert Select. His specialties are small-ship cruises, family travel, and luxury tours. He’s a Los Angeles Press Club member and has written 13 books and several hundred articles. His email address is steve@cruisesandcameras.com.
