What to Do When a Host Agency or Supplier Doesn’t Pay Your Commissions
by Cheryl Rosen /
One young travel agent is celebrating finally receiving a $3,000 commission check after complaining to the Minnesota Department of Labor. Others are cheering a recent decision by a trade show to deny a booth to a host agency whose reputation has been called into question.
Rather than suffering in silence and cutting their losses, a new sense of empowerment has some agents just plain refusing to take it anymore. Banding together, they are using social media and peer pressure — not to mention state and local law enforcement agencies — to call out suppliers who don’t do the right thing.
One agent told TMR that after quitting a full-time job with benefits, her dream of becoming a travel agent turned into a nightmare when her host agency made collecting her commissions difficult. “I rarely got paid on time and always had to chase my money,” she said. When she quit the host, things got worse; after five months, she still had not received her final $3,000 in commissions.
She went to the police, who referred her to the Minnesota Department of Labor, which has “really strict laws enforcing payments for independent contractors.” She copied the statute and mailed it to the host agency, and two weeks later, she had a check in hand.
“My letter to him was not threatening, just very straightforward. But clearly he was scared because he knew I was serious. He wrote back the very next day, and then he paid me to the penny.”
How to avoid becoming a victim
Scammers come in many flavors, including disreputable resorts and suppliers of all kinds. Researching your partners carefully in advance is the best way to start, experienced agents say. But even after the fact, there are steps you can take when a travel industry partner doesn’t pay up.
All good business practices start with doing your research. “I have been part of a host that has been not paying commissions, not sending out a 1099, not responding to calls,” says Kristi Emo, owner of Your Dream Escapes in Fresno, California. “Check out how long they have been around, what consortia they are affiliated with, how many agents they have. Read reviews, ask if you have access to BDMs, what training they offer, how easy it is to get help, how often do they pay their commissions, can you track online what you are getting paid for, what events do they have during the year like conferences.”
The travel industry is a small family, too, so ask around. “Start by choosing a reputable consortium or host agency that’s been around a long time; if you’re not sure, speak to people in the industry, check with ASTA or CLIA or USTOA for tour operators. Make sure they have a lot of relationships in the industry, especially with the consortia because consortia vet their partners very carefully,” said Guy Young, chief engagement officer of The Travel Corporation in Los Angeles, parent of Uniworld and Trafalgar, among other companies.
Nexion President Jackie Friedman suggested also checking with PATH (Professional Association of Travel Hosts). “Yes, we are all competitors, but we are all aligned on protecting the integrity of the host agency model and the independent agents who affiliate with us,” she said.
“Talk to other agents and suppliers and choose a partner that meets your individual needs,” said Travelsavers Senior Vice President of Sales Nancy Bennett. “Different hosts offer different programs, and agencies such as NEST cater to home-based agents without being a host.
Lisa Chambers Fletcher, director of training at Gifted Travel Network, noted that “aligning with the right host agency can be the difference between entrepreneurial success and struggle, but you must do your due diligence. Read reviews from reputable sites, ask for references and listen to your gut. Talk to ICs who are currently hosted with the company on your own … not just the ones they put you in touch with. Ask the tough questions. There are some quite amazing host agencies out here in the industry who truly want you to thrive and grow together with them.”
If things go wrong
And if things go bad, don’t be shy. “Contact ASTA and NACTA and hire an attorney. Take them to small claims court; report them to the State Labor commission, state attorney general and your local district attorney. Hit them with all the legal remedies you can think of,” said Celeste Mitchell, owner of Absolute Journeys Tours & Cruises in Van Nuys, California. And don’t forget ASTA’s mediation service, which mediates B2B disputes relating to unpaid commissions, provided both parties are ASTA members — another reason for only dealing with ASTA suppliers.
Make sure your payment terms are clearly outlined in your host agreement or with the supplier BDM you are working with, said ASTA spokesperson Erika Richter. “Documentation is key, as the claiming party has the burden of proof if legal action is ultimately needed.”
“Part of the issue is that we make it look easy, so people with $395 and no business or industry experience get a CLIA certification and open an agency,” says Jill Garrett Hiers at Custom Travel Professionals in Clinton, Missouri. “That's not how this works. You have to have a business plan, reserves, knowledge of the industry. If you want to be independent, find a host that will allow you to brand yourself as independent while providing support and training.”
In the end, every agent, whether new or experienced, is a potential target — and every choice of supplier must be made carefully. Said one agent of 26 years who was scammed recently of more than $1,300 in commissions that she has been unable to recover: “The main idea here, I think, is that anyone at any point can get scammed, and I am lucky this is the first time this has happened to me. I wish ‘we’ could do something to put a stop to it immediately.”