In this year's survey, more than 45% of respondents said they were independent, home-based agents, and of those, nearly 70% were affiliated with a host agency. Managing editor Rebecca Tobin spoke with Susan Ferrell, owner of
host agency Travel Experts, about the benefits a host agency can provide
to an independent agent.
Q: What do you think is the greatest benefit a host agency provides to a travel agent?
Susan Ferrell
A: Right off the bat would be accelerated commissions, higher commission levels. There's no way an individual can get more than probably a standard 10%; they can't possibly do the volume that a supplier needs to boost their commission level. If you align yourself with a host agency, it's the volume power.
There's a multitude of other reasons: the networking, the resources, the relationships. The suppliers usually are very willing to help us because of, No. 1, our volume and, No. 2, the relationships we've established over 30 years. They know our agents are top-notch and are willing to have their backs. And you don't get that as an individual operator. You're lost out there in a sea of bigger fish.
Q: The top reason in our survey to use a host agency is access to preferred suppliers, which goes somewhat hand in hand with the accelerated commission.
A: Right, and the relationship aspect. Suppliers are looking at their bottom line, and they're not going to call on, or spend a lot of time or resources on, an individual operator who's not giving them a lot of business. But they will spend a lot of time and resources on a host agency that has, like we do, hundreds of agents, top-notch agents. So all our advisers have access to the best supplier partners because the suppliers want to be in front of our people.
Q: Just under a quarter of respondents said that access to lead generation was a reason to use a host agency. It seemed fairly low. Does that surprise you?
A: Yes and no. The most likely candidates to align themselves with a high-end host agency are those who have been in the business for a while and already have a client base established. Those are the ones who join us. They aren't necessarily looking for leads. In some cases they are overwhelmed; I have a lot of people looking for help because they are so busy. So if your responses are from the experienced agents it doesn't surprise me that a low number are looking for leads. The ones who are looking for leads ... are new entrants into the industry, and they don't [yet] have a lot of business.
Q: Do you offer a lead-gen program?
A: We do not, because we operate on a fixed-fee basis, where agents keep 100% of their earnings and pay us a monthly fee. We don't share in any of their earnings. We don't give them leads; it's their own responsibility to build their business. That works great for a certain segment of the adviser community. It doesn't work for everybody.
Q: You said you've been in business almost 30 years. Do you think the role of the host has evolved?
A: It's changed a lot. I was just thinking about when we opened it'll be 30 years next year and it was me, and I had a partner back then. It was the two of us and no agents and no business and two mortgages on our houses. [A host agency] was such an oddity. It was almost impossible for almost a year for us to convince agents to give up a salaried position and join us for commission. They were like, "Why would I do that?"
It's evolved to a point where everybody is a host agency to some extent. A few are 100% host agencies, like we are. Most are a hybrid; they have salaried agents plus independent contractors, because they know that independent contractors are making up probably a majority percentage of the industry right now.
It has evolved over the 30 years from being an unknown term to: everybody is a host agency now.