Not long ago, travel agency owner Yolanda Meador decided she’d had enough of hosting outside agents and severed ties with her independent contractors. “I went from 10 outside agents to zero,” said Meador, president and founder of You Deserve It Vacations in Irving, Texas.
It was late 2016 and Meador was fed up. Despite her best coaching efforts, her outside agents simply weren’t producing, even as her own sales were soaring. “They didn’t even sell what they had sold the year before,” she said. “I was like, ‘You guys are going to starve to death.’”
Adding independent contractors (ICs) or outside agents to your team might seem like an easy way to generate additional revenue. But the reality is that hosting independents successfully is no slam-dunk.
To be sure, for agency owners, there are many benefits of working with independent contractors. But there are just as many hurdles. Sandy Anderson, owner of Riverdale Travel, a two-store agency in Minnesota, has been hosting independents successfully for years. Even so, she said, “hosting is one of my biggest challenges.”
There are lots of reasons a smaller agency might bring on independent contractors. Surprisingly, revenue does not always top the list.
“We see benefits in being able to add new customers and new travel agents without requiring more desk space or putting employment-type limits on people who want flexibility,” said Connie Corbett, CTC, president of Ambassador Travel, a $12 million agency in Evansville, Indiana.
Independent agents also extend the reach of their host agencies into markets and products they might otherwise not tap. “Some of them have unique businesses where our in-house people don’t produce,” Anderson said. “One of my ICs supports a very niche tour operator. They bring that vendor into our office and we learn firsthand about that niche.”
On the flip side, sometimes outside agents land a piece of business that they’re not equipped to handle and hand it over to the host agency. “There’s a lot of residual business that goes back and forth,” Anderson said.
For smaller host agencies, independents can act as a safety net. “They can help you if you need it. You can pass stuff off to them,” said Michael Schrobat, owner of CETC Travel Services, a home-based agency in Portland, Oregon.
The rewards of mentoring
Schrobat hosts seven independent agents, two of whom are moderately productive and five of whom are still breaking into the business. Together, his independents produce less than $200,000 in sales, or around 10 percent of the agency’s total volume.
While the added volume does help his agency meet preferred supplier sales thresholds, like some other small agencies that host, Schrobat said driving revenue is not his primary objective. “I look at it as a mentoring program, more than a revenue program. I’m sharing my expertise,” he said.
Working with independent agents allows Schrobat to learn, too. “They often come with new clients who have new desires, new trips, new adventures. It’s continuous learning on both sides.”
Anderson said she also values coaching independent agents. “I love to mentor. I have a passion to see them succeed. That’s fulfillment in my career.”
Another benefit of hosting is that it allows agency owners and potential employees to check each other out with minimal commitment. “We can see strengths and weaknesses. We can see who is able to produce and who might want regularly scheduled hours someday,” said Corbett, who has had more than a few independents grow into part-time or full-time employees.
Hosting also allows agencies to maintain ties with employees who want to leave their jobs but keep a hand in travel. “It’s a great way to keep them part of our agency and keep their customers in touch with our agency,” Anderson said of former employees who have become outside agents.
Challenges and frustrations
Outside agents range widely in their experience levels, their ability to work well independently, their time commitment, dedication, ambitions and productivity. Corbett, whose agency works with 25 to 30 independents, said she sees “a broad range of productivity, from a few bookings a year to several bookings a month.”
Corbett said her top issues are “the large array of personality types and time availability. Communicating in an effective manner can be difficult across that broad range. Some independents work full-time jobs and are only available on Saturdays; some are not available on Saturdays. Some like to spend lunchtime training. Finding a commonality of time to engage is one of our biggest challenges.”
Schrobat’s biggest frustration is training independents who are new to selling travel, especially the younger ones. “They get ahead of themselves. They want to sell everything to everybody and want us to help them set up a website [so customers can book online]. I want them to understand that this is about service. We sell ourselves first and then we present the product.”
Training independents is one of Anderson’s biggest issues, as well. Because of laws and regulations governing employer relationships with independent contractors, host agencies cannot make training, or much of anything else, mandatory. “Every Tuesday, we have training in our office. We can’t require it, but we ask them to participate. Some do, some don’t,” Anderson said.
Meador, the agency owner who gave up on hosting in 2016 but has since resumed on a smaller scale, said her biggest problem is “finding people who are hungry. For a lot of independents, it’s a hobby. They think that travel is not a real profession. Whether they say it or not, their actions speak that,” she said.
Risks and pitfalls
Apart from the frustrations that come with hosting independents, there are also real risks. Through the years, there have been countless instances of unscrupulous or unwitting independent agents defrauding their hosts, clients and suppliers, and in such instances, the host agency is often held responsible.
Even if it’s a question of an independent agent’s incompetence, rather than malevolence, if something goes wrong with a booking, the host agency is likely to be called to task.
Similarly, host agencies that run afoul of federal or state regulations governing the classification of independent contractors and employees can incur hefty fees and penalties.
In Part 2 of this series, TMR will discuss hosting tips for small agencies.