Ten years ago, few of us had ever heard of “host agencies”. Today, there are many, large and small, in Canada, the U.S. and beyond. As well, many traditional larger agencies are now becoming host agencies.
Despite all predictions to the contrary, the Canadian retail travel industry seems to be in relatively good shape and the number of travel agencies really has not eroded that much. But the landscape is changing dramatically in terms of how travel is sold, and how travel agencies are structured.
Over 25% of all Canadian travel agents now work from home, supported by host agencies.
“Home based supports long term revenue growth and productivity in our industry by providing better customer service, higher margins and lower overheads with access to state of the art technology from anywhere in the world,” said Greg Luciani, CEO, Travel Only.
Smaller agencies signing up too
Similarly, smaller agencies are turning to some host agencies to support their business and reduce overhead costs.
“We are getting a lot of interest in our agency support program,” said Flemming Friisdahl, Founder, The Travel Agent Next Door, a company that supports home based agents and agencies. “Smaller agencies are realizing that signing on with a host agency is a great option for them. The reduction in overheads and costs is significant and this also allows the owner to spend time on what they love to do –sell travel, while leaving the entire back end to the host agency.”
The erosion of commissions has had an impact on the smaller agency. Many are struggling and looking to join larger agencies, or sell out completely. Others are getting into niche markets, joining host agencies, or merging with larger agencies and bringing their clients over.
According to ACTA chair Mary Jane Hiebert: “Host agencies are a good solution for the smaller agency struggling to make a profit. Host agencies provide options related to booking software, ticket issuance, commission recovery and reconciliation, marketing support, training, and websites. “
Significant growth in home based agents
The trend towards home based agents in Canada is remarkable. Yet Canada remains behind both the U.S. and the U.K. where the number of home based agents exceeds 50%.
“Why is the independent travel advisor market the fastest growing retail segment in Canada? Because no travel advisor wakes up every morning thinking, ‘Gee, I sure love invoicing and reconciling commissions!’ Being an independent travel advisor means they can wake up and do what they love, and as a bonus, from the comfort of their own home – no commuting,” says Tim Morgan, VP, Travel Professionals International.
“First and foremost, being an independent travel advisor means freedom to explore the reason why they got in to this business in the first place – a passion for travel and sharing that passion with others. The happiest independent travel advisors are those who love what they do every day and being independent allows them to fully live that out according to their own priorities.”
He added: “Secondly, it means being in control of their financial independence by cutting overhead costs, setting their own targets, and, often, making more money by working smarter, not harder.”
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This article appears in Sphere, Travelweek’s monthly e-newsletter for home-based agents.
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