You evidently have an interest in the travel industry. You may already be working as a travel agent or thinking about entering this exciting market for the first time, attracted by the prospect of being your own boss and working from home.
You probably already have some idea of what a travel host agency is but are looking for further clarification.
What is a travel host agency?
Put simply, a host agency is an umbrella organisation that provides a range of essential business-to-business services to independent travel agencies, thus greatly smoothing the way for start-ups.
The services offered usually include education, training and mentoring; marketing, operational and tech support; supplier relationships and networking plus insurance, merchant services, accountancy and book-keeping options.
TRAVEL AGENCIES CAN NOW FOCUS ON WHAT THEY DO BEST, WHILE HIGH-TECH ALGORITHMS ARE OPTIMIZING THEIR PROFITS
We increase travel companies’ booking profit by 35%+ by repricing bookings for a lower rate when prices drop in the post-booking stage.
One crucial aspect for entrepreneurial travel agents is that by hooking up with a host agent you can automatically comply with any necessary licensing and accreditation requirements. Commonly, independent travel agents (ITAs) working under the host use the same booking or accreditation number.
In return for their services, host agencies offer a commission split with their ITAs. There may also be a management fee attached to the partnership. Commission splits can vary wildly so it is best for ITAs to do plenty of research before entering into a contract with a host agency.
The Find A Host website has a helpful Excel checklist that contains all the right questions to ask to allow you to make comparisons between host agencies. It is free to download.
The origin of travel host agencies
Contrary to popular perception, online booking has not spelled the death of travel advisors – they have simply migrated from offices and stores to home-based working.
In the US, the world’s biggest travel and tourism market, the absolute population of travel advisors is increasing.
Phocuswright analyst Mary Pat Sullivan told Travel Weekly: “Maybe some of the bricks-and-mortar numbers are shrinking, but overall the population is absolutely growing. The ranks of independent contractors at Virtuoso, Travel Leaders, Signature agencies, etc., are exploding. The franchise numbers for companies like Cruise Planners and CruiseOne/Dream Vacations are soaring.”
As the number of web-based entrepreneurs and home-based travel agents has grown so has their need to plug into a larger professional support system, hence the rise of the host agency.
The first host agencies emerged in the late 1980s and today they are often large, highly-sophisticated organisations serving the needs of hundreds of independent travel agents.
It is also an area of the travel trade that is undergoing consolidation, as evidenced by the recent merger of two host agencies Ticket to Travel and KHM.
What is the difference between signing up with a host agency and other affiliations?
It is worth remembering that due to differing regional laws and licensing requirements, host agencies and the ITAs that they work with tend to be based within the same country or geographical area.
An ITA based in North America, therefore, will choose a host also in North America. The US Professional Association of Travel Hosts (PATH) sets out a series of standards that its members must meet.
It recommends that ITAs choose a host from its list of members as these are organisations that adhere to its professional code of ethics.
The American Society of Travel Advisors (ASTA) also carries a searchable directory of host agencies that abide by its code of ethics.
Indeed, the term ‘host agency’ is widely used in the US, Canada and Australia. Elsewhere, there are organisations which perform the same or similar functions but do not call themselves host agencies, instead operating as professional associations, start-up support providers, franchisors or sales and marketing consortia.
In the UK, for example, The Travel Network Group Association, established in 1978, offers a variety of membership options and supports over 900 ITAs. Another organisation, The Global Travel Group is a franchisor that offers a package of sales, education and operational support to its members. In both cases, ITAs who become members receive an ATOL licence as part of the package, which is a legal requirement to sell air travel in the UK.
What is the right option for me?
The option you choose will be dictated by what kind of ideas and vision you have for your own business and the organisations that are available to you in your geographical location.
If your goal is to create your own distinct brand, website and identity, then a host agency offers a more flexible business model than a franchise.
As an independent agent, you can build your business in the way you wish. Meanwhile, the host is providing the back-of-house support necessary to help you on your way.
In the end, whether you choose to go with a host agency and/or another type of affiliation, the general benefits are clear: professional expertise, experience and support to help you on your way with each party having a clear vested interest in making the partnership a success.