Choosing a Host: For Some ICs, a Trad’l Agency Is the Best Fit

This is the first of two stories on choosing to affiliate with a traditional agency or host agency

With the proliferation of dedicated host agencies over the past decade, some small and mid-size travel agencies are having a tougher time attracting independent contractors.

The overwhelming majority of hosted independent agents today are aligned with a pure host agency, with a franchise that fills the same role or with a mega-agency that has a separate hosted division.

 But for some independent contractors, affiliating with a smaller or mid-size traditional agency is still the right choice.

 Sense of belonging

One such travel seller is Christina Corral, an independent contractor for Kahala Travel, a Signature member agency in San Diego. Corral managed Neiman Marcus Travel’s San Diego office for 20 years before it closed in 2002. She has been an IC with Kahala Travel ever since.

 While she operates as an independent “on every level,” Corral said being associated with a brick and mortar agency gives her a sense of belonging.

 “It makes me feel I’m part of a more intimate group,” she said. “It’s more personalized. You’re not just some number; you are someone. You’re more part of everything that goes on.”

 For independent contractors like Corral, the in-person connections gained by working through a nearby agency trump the benefits of affiliating with a major host agency––even though pure hosts typically provide a far more advantageous commission split.

 Depending on the host, there’s also significant support in the form of training programs, back office systems, marketing assistance, and more.

 “They want to be able to walk in and pick up their documents, or sit face-to-face when we have a rep come in,” said Jennifer Doncsecz, president of Bethlehem, PA.-based VIP Vacations Inc., a member of the Affluent Traveler Collection. VIP Vacations hosts 15 ICs.

 Room to grow

At Riverdale Travel Leaders in Coon Rapids, Minn., most of the agency’s 15 independent contractors live close to the office or at least within the state. Their reasons for affiliating with Riverdale are similar to those cited by Corral.

“They want to be part of a smaller company because there’s more personalization, more assistance,” said owner Sandy Anderson.

At Riverdale Travel, that assistance comes in the form of a dedicated staff person who manages and mentors its ICs, including helping them with websites and marketing.

“They’re going to grow in this type of atmosphere,” Anderson said.

But that doesn’t mean they’ll stick around.

Once they reach a certain level, some ICs choose to move on to a dedicated host agency to earn more money, according to Anderson and others.

One-on-one mentoring

Pure hosts do typically give agents a bigger slice of the commission pie––as much as 100% compared to a 50/50 or 60/40 split.

But agents “get less attention and less one-on-one mentoring,” said Leo Zabinski, CTC, MCC, president of Classic Travel of Hilton Head, a Vacation.com member in S. C.

 That’s the key difference between going with a large host and a local brick and mortar, according to Zabinski.

 “My people interact with me on a weekly basis,” he said of his ICs. If their client is asking for something that is beyond their level of expertise, there’s somebody to help them directly or sit in and help their client.”

 That’s not the case if you’re affiliated with a national host agency, he added.

 In a box

For Wendy Burk, CEO of the Virtuoso member agency Cadence in La Jolla, Calif., a key downside to affiliating with a dedicated host is that “you’re one in a thousand; you’re basically in a box. You’re not engaged in a sense of community.”

 In contrast, being hosted by a traditional agency with a strong program for ICs, lets agents “be in an environment where you’re able to do your own thing, but plug into benefits when you need them,” said Burk, who was an independent contractor herself before launching the forerunner of Cadence in 1994.

 “Do I need help with marketing? Do I need help with a level of preferred vendors that will give me higher commission? Name recognition? Assistance for VIP clients? All those things that will help me benefit my business,” she said.

 Traditional agencies also can be more flexible with ICs on commissions. That includes offering a better split to agents who bring in a big chunk of business, rather than being forced to stick to a set formula.

Access to BDMs

Another advantage for ICs of working through a nearby brick and mortar agency is access to suppliers’ local business development managers.

 “The IC aligned with a local traditional storefront agency can rely on BDM support when needed and feel that their BDM knows and will take care of their business,” said Ann van Leeuwen, president of the National Association of Career Travel Agents (NACTA).

 At VIP Vacations, which specializes in romance travel, Doncsecz sees yet another potential benefit of affiliating with a traditional agency. “We have an excellent brand for weddings. That is something you can piggyback off of.”

 Comfort level

For many longtime agents who grew up in a traditional agency environment, there’s a comfort level that comes with working through a brick and mortar agency. “That’s the model they’re used to,” Zabinski said.

That’s so for Corral of Kahala Travel.

“That’s how I started and that’s where I feel most comfortable. It’s just the way I think,” she said.

Van Leeuwen noted that ICs who affiliate with a traditional agency tend to have an existing relationship with that agency or are veteran agents who’ve been with a traditional brick and mortar “and have reservations about switching, most likely due to relationships with the staff, owner/manager and local suppliers.”

But Eddie Woodham, a longtime agent who works as an independent travel consultant in Fort Lauderdale, had no such reservations.

 In a word . . .

Woodham has been an independent contractor since he enter the industry 20 years ago. He spent the better part of his career being hosted by brick and mortar agencies. Then in 2010, he shifted to the host agency Oasis.

What prompted the move?

“In one word, commission levels,” he said. “I was on a 50/50 split, and now I’m basically on a 100% commission split, with some fees. My commissions went from mediocre to what I consider excellent.”

 For Woodham, there were no downsides to moving to a pure host.

 But he could see how for a less-experienced agent “there might be an advantage” to being attached to a brick and mortar where you can go into an office and be exposed to experienced agents.

 Next time: Traditional travel agency or host?—how to make that decision