Travel agencies have been hosting independent agents for years, but there's an evolution taking place among the smaller agencies, according to the National Association of Career Travel Agents (Nacta).
Smaller agencies that have been acting as hosts are themselves linking up with large host agencies and receiving back-office services and other administrative help.
“We see a trend with some small agencies disbanding and making arrangements with host agencies to help their agents go independent rather than just unemployed. We see some agencies becoming ‘units’ of networked independent agents working usually with the same host agency,” said Ann van Leeuwen, president of Nacta, the ASTA-owned association that represents independent, “career” or home-based travel consultants.
In an email interview with Travel Weekly's Home-Based Agent e-letter, van Leeuwen said that agents affiliated with small agencies that close up shop or are sold to another company are banding together and moving to a host agency as a group, sharing business and services with one another while under the new host umbrella.
“We think this might become a trend,” van Leeuwen said. “We see opportunities for independent agents to form more partnerships or other relationships with peers, almost as ‘virtual agencies.’ Some of these partnerships may be between agents in different countries such as U.S. and Canadian independent consultants working together to sell and serve clients.”
She added: “The ‘business model’ is really the large, dedicated host agency, which is rapidly growing. Networks of travel consultants are one way agents who lose or decide to leave their jobs at brick-and-mortar agencies can go independent and stay together with other agents with similar backgrounds. They work well together and are comfortable with helping one another. It is an alternative to going it alone as a new independent consultant rather than staying the course with a brick-and-mortar location.”
The trend is partly driven by the growing cost of back-office expenses and lower commissions paid to smaller agencies that can't generate the sales volume for overrides from preferred vendor agreements that large host agencies can offer, she said.
“The main challenges for small agencies are to generate reasonable commissions, find ways of controlling costs and reducing time on planning travel. Host agencies represent a way of reducing back-office costs.”
Small agencies can be successful hosts to agents who are self-starters, experienced and work well on their own, she said. However, a small agency is unlikely to be able to provide the training, mentoring and support services necessary for newcomers and even some experienced agents.
“These different business models, where we see the change from employed agent to independent agent, will have a fundamental effect on the travel agent community,” van Leeuwen said. “As more consultants become outside sales reps or contracted agents, they will become more powerful as individuals and as a group (such as Nacta represents). They will specialize more to become more competitive and more valuable within a host agency network. Suppliers will have to work more with these individuals and pay more attention to their commission levels. And travel agencies themselves will have to develop refined ways of dealing with [independent] contracted salesmen and women instead of employees.”