Tuesday July 7, 2020
Facebook Twitter Linkedin Linkedin Linkedin Linkedin
Could COVID-19 be the tipping point for the home-based agency model?

Could COVID-19 be the tipping point for the home-based agency model?

Friday, May 22, 2020

This story originally ran in the May 14, 2020 issue of Travelweek magazine. To get Travelweek delivered to your agency for free, subscribe here.


TORONTO — Any agent or agency owner who was thinking of going home-based before the pandemic is looking at this business model with new eyes, and maybe more urgency, as COVID-19’s devastating impact to the industry is now well into a third month.

Host agencies including The Travel Agent Next Door, TPI, Nexion, Vision Travel, Independent by Flight Centre and TravelOnly all say they’re seeing upticks in inquiries in recent weeks.

The travel industry was blindsided by the impact of COVID-19 and it happened almost overnight. The federal government’s financial assistance programs are a big help but they’re short-term solutions, and many in the retail travel sector may decide that post-pandemic, it’s time for a major long-term change.

Travelweek spoke to several host agencies about what they’re hearing from agents, and how they see the home-based sector growing in the wake of COVID-19.

THE TRAVEL AGENT NEXT DOOR

Asked if TTAND has seen an increase in inquiries from agents and agency owners, both for TTAND and its storefronts division, The Agency Solution, TTAND founder Flemming Friisdahl says “100% yes, and I know because I talk to many of them personally.”

Friisdahl says: “These agencies are part of some of the franchise brands in Canada and between hard costs like rent, salary, accounting, franchise fees, phone systems, websites, booking engines, insurances, e-marketing, print marketing, associate fees and the list goes on, these storefront locations can join a home-based agency that is specifically set up to host them, and their cost will drop to next to nothing. Why would someone in their 50s risk all their savings, or take out a loan or kill themselves working 70 hours/week as they cannot afford the staff, when they literally are guaranteed to make more money, doing less work and risking nothing?” he says.

He tells anyone weighing their host agency options to do their homework, and to talk to several host agencies, not just one. He tells agents to check the staff-to-agencies ratio at the host agency, as well as the tools available to agents for sales, marketing and more, and the cost of bringing on other agents, and the commission split.

Asked how TTAND is faring during the pandemic, he says shortened work weeks are possible but so far, no layoffs. “Without our team TTAND would not be who they are. So we may have to all of us reduce the work day by one day, but that could be down the road and the entire team is supportive of this.”

He adds: “Every single agency I have talked to believes, like I do, that 100% business will come back, truly 100% of them. They are just not sure when. We all know that customers will want to go and experience things away from their home, so there’s no question the travel industry will come back, but will it be in four months – I am sure not – or by the end of the year – yes, a little.  But probably more towards next year, mid-year.”

TPI 

TPI’s CEO Zeina Gedeon predicts a major shift with more agents going home-based. “Even before COVID-19 about 40% of the travel agents were home-based which is a number we have seen grow in the past few years,” she says. “Particularly due to COVID-19, one of the top reasons to move to a home-base model is overhead costs of running a store front agency.”

More news:  G Adventures' Inca Trail Step Challenge starts today

In the past couple of weeks TPI has welcomed 15 new Advisors, a number that Gedeon says is a surprise even to her, considering everything that agents have on their plates right now. “All of it has been word of mouth. Our Advisors are our biggest advocates,” she says. For Travel Agent Month, TPI has enhanced its referral Ambassador Program allowing TPI Advisors to earn up to $5,000.

Gedeon says agents making inquiries with TPI say they’re looking for more support than they’re getting from their current affiliation.

She adds that ACV’s announcement earlier this month that it was coming back with limited product to select Caribbean and European destinations starting in June is an important step to reopening travel. “The hope is that others will follow suit for July and thereon. My prediction is that travel will restart by fall 2020. By then hopefully we have a vaccination for COVID-19 which will put travellers’ minds at ease, along with all the sanitization protocol our partners are coming out with.”

No matter what, the pandemic has shown the world just how important travel agents are, says Gedeon. “What this pandemic has done is increase the value of booking with a travel advisor tenfold.”

NEXION

Going home-based is not for every person nor every role, but the pandemic has forced entire industries, including travel, to work remotely, says Mike Foster, CTC, President of Nexion Travel Group – Canada.

Nexion is getting calls from agency owners, front-line agents and also – in what Foster says is a “pleasant surprise” considering the situation right now – people who are new to the travel industry. “They view this as a time of opportunity and have the time for training,” he says.

Foster adds that he’s also seeing “introspection and reflection” from experienced travel agents, as they consider their future path in these unprecedented times. For some, that could mean a change of affiliation. “They may never before taken the time to step back from the day-to-day demands of serving clients, and to work on their business and on their career.”

As important as agents have been during the pandemic, their role will only increase in value post-pandemic, says Foster. “When will people be comfortable in getting onto an airplane, onto a cruise ship, or even into a hotel room? Much of that is going to be up to our industry to manage. Travel service providers will need to take steps to provide safe environments in order to allay fears, and travel advisors are going to have to address their clients’ questions and concerns in planning for travel.”

TRAVELONLY

TravelOnly CEO Gregory Luciani says TravelOnly has fielded five times the usual number of inquiries from travel advisors looking to move to a home-based model in the past few weeks.

“What we are hearing from advisors across Canada is that they love this industry and what they do, but they are scared for their future and looking for more stability,” he says.

“We know that the overhead costs of brick and mortar establishments are being felt more than ever before. Many are looking for a fresh start without the same financial risks; a support team and an opportunity to rebuild their businesses again.”

More news:  Book winter travel now with ACV’s new Early Bird Sale

VISION TRAVEL

Lynda Sinclair, CTM, Senior Vice-President – Leisure at Vision Travel, says agents may discover new opportunities when they explore other host agencies. She has a suggested checklist for must-ask questions: “How long have they been in business and how big a part of the industry are they? Does your host agency insist that your client is actually their client? Does your host provide leads? What sort of back office support do you need? How respected are they in the industry? Can they provide you a desk if you prefer to work in an agency? Are you earning a fair percentage of your commission? What is your earning potential?”

And here’s one that some agents may not have thought of: “Can you ‘cross pollinate’ your business?” asks Sinclair. “Do you have access to corporate accounts or incentive business? If so, does your host have experience in helping you manage that?”

Finding out what host agencies have to offer, says Sinclair, “may be the best investment of your time you can make.”

INDEPENDENT BY FLIGHT CENTRE

Where some office-based agents may have been hesitant to consider being home-based previously, they now know from first-hand experience that working from home can still provide them with support from an admin team, the ability to connect with suppliers, BDMs and their clients, says Heather Baker, Director of Acquisitions & Social Media for Independent by Flight Centre.

Independent has “definitely” seen an increase in inquiries, says Baker, adding: “Comparing the minimal costs of host agency fees to the overhead a small storefront location normally incurs in this situation could mean the difference between them closing the doors permanently or allowing them to pivot.”

Asked what she’s hearing from agents, Baker says: “Many are obviously curious as to when travel will resume but it will be a slow and gradual process. In the Independent Contractor (IC) space a primary concern is when people may be starting to book again, a valid question given the fees they pay to a host agency. The fact is we do still have people travelling, albeit not the normal volume the industry is used to. Essential, business and government travel is still occurring and we have had many agents quoting and booking for travel in 2021, including weddings, groups, family holidays and more.”

Kathryn Folliott

Editor at Travelweek
Kathryn is Editor at Travelweek and has worked for the company since 1995. She has travelled to more than 50 countries and counts Hong Kong, Jerusalem, the Swiss Alps and the Galapagos Islands among her favourite destinations.
Kathryn Folliott
FEATURES
LEARNING CENTRE
Go to Learning Centre






Get travel news right to your inbox!