Chapter Fourteen:  Starting a Home-Based Agency

 

Are you ready?

 

 

Frequently Asked Questions:

1. What kind of license do I need?

      http://www.hometravelagency.com/travel-agent-license.html

 

Most people are surprised to find that a license- or any formal schooling is NOT required in order to become a travel agent.  It’s true.  Even without any experience or education, anyone can become a travel agent.

 

Many states have enacted “Travel Seller’s” Registration programs.  Some require financial contributions such as bonds or letters of credit (Hawaii, California, Nevada, Ohio, Florida and Oregon).  However, in most states you just print a business card and pass it out!

 

Remember…”calling” yourself an agent and actually being “recognized” as an agent are two different things.  It’s not about whether or not people call you a travel agent.  It’s about whether or not the travel suppliers recognize you as a travel agent.  Suppliers only pay commissions to agents that are affiliated with and designated by industry organizations such as ICTA, ASTA, ARC, IATA, and CLIA.

 

2. What is the average investment to become a home-based agent?

 

You must be prepared to invest some money if you want to start a reputable at-home agency.  Don’t make your life complicated.  If you invest in the right things up-front, you will be surprised at how easy it is to sell!  Having the right resources is very important.  So do not underestimate the importance of your initial investment in any of the following things. The following checklist can be used as an initial estimation of how much you might want to consider spending.  Costs have not been listed because these costs (below) can be variable:

 

1. Do you have a home office?

      http://www.powerhomebiz.com/vol13/homeofficerules.htm

      http://www.traveltrade.com/home_based_trade.jsp?articleID=4282

 

Ideally, you should have a specific room in your home that will be used      specifically for booking travel.  This is   important, because that “room” will be considered a tax write-off when you receive your business license.

 

          Your home office should definitely have the following items:

 

                  *Reasonably new computer (no older than three years) with a powerful disc drive

                  *Fast, dependable internet connection

                              (DSL or cable connection is best) 

                  *Reliable color copier

                  *Phone and fax machine

                  *Travel Guidebooks- only for the places/areas you intend to specialize in…

 

2. Do you have a host agency?

      http://nacta5.securesites.net/hosts/FAQ.htm

 

Obtaining your own ARC or IATA designation is difficult and costly.  Most home agents choose to affiliate with a “host” agency that acts as a “conduit” in working with suppliers.  A percentage of the supplier commission is usually given to the host agency in exchange for the use of   their officially designated numbers (ARC, IATA).

 

Some agents choose to affiliate with a local host agency.  Others choose to affiliate with larger national host agencies that specialize in “hosting” home-based agents exclusively.

 

The cost of affiliating with a host agency can vary.  Locally based host agencies should encompass no up-front costs.  Home-based agents usually split commissions with the local host agency.  National host agencies usually encompass both up-front and monthly costs.  But home-based agents usually retain around 70% of supplier commissions.

 

How can you know which is best?  First, determine (with a business plan) exactly how much you expect sell.  If you expect to be selling more than  the monthly fees of a national host agency- then it might be worth the monthly investment.  If you’re not really sure, then you might want to begin by associating with a local host agency.

 

3. Do you know which organizations to affiliate with? 

      Yes, you should pay the dues!

 

      ASTA:  The American Society of Travel Agents (excellent conventions)

      ICTA:  The Travel Institute (agent training)

      CLIA:  Cruise Lines International Association (everything about selling cruises)

      IATAN:  International Airlines Travel Agent Network

 

4. Do you have a business plan?

      http://www.bplans.com/dp/article.cfm/26

 

Every successful business starts with a dynamic business plan.  If you are not sure about how to write a business plan, then take a basic business course!  It’s that important.  A business plan provides a roadmap for your success.  As an agent, you need to determine what your niche (or specialty) will be.  Who will you sell to?  How do you plan to market your products?

 

5. Do you have a good website?

      http://www.useit.com/alertbox/991003.html

 

Yes!  You need a website!  More importantly, you need a relevant, working website….not just an informational website.  If you are not a    website designer, then you should definitely consider paying a professional to design a professional site for you.  Remember, you get what you pay for.  If you leave your site design to a “quicky” web design   site- that’s exactly what you’ll get.  Think very seriously about what you want your site to do for you.  What function will your website play?  Do you want clients to be able to book flights through your site?  Then consider having hyperlinks to all the major online booking sources (Travelocity, Expedia, Orbitz, etc).  Do you want your clients to have access to tourism information or special about your niche area?  Then you may want to have hyperlinks to the Ministry of Tourism or other special links.  Are you going to sell ancillary products on your site (such as travel guide books and luggage)?  Then you will need to set up a system for accepting credit cards (such as Verisign).  These are important things to consider when designing and developing a good website.

 

6. Is your website listed on search engines?

      http://www.submit-it.com/

 

Listing your site on search engines is fairly simple and straightforward.  For example, when you visit AOL, you will be able to navigate to an area that will list pricing for different “levels” of being listed.  Some search engines will list your site free of charge.  Other larger search engines will charge a fee per “hit”.  Ultimately, you will determine exactly how much    you are willing to spend to get “hits”.  For more information, you should   visit each search engine site.  You will see information about listing your site with them.

 

7. Are you financially committed to traveling?

 

Familiarization trips are deeply discounted tours offered to travel agents as an incentive to book a particular destination, cruise line, hotel or resort. While prices are deeply discounted, they are not “free”.  As such, the home-based agent must be financially prepared to take advantage of any “fam” trip that will increase their knowledge of a destination they are trying to sell. 

 

Destination knowledge is as important to a travel agent as inventory is to a business.  A business must initially invest money in inventory.  In the same way, an agent must initially invest money in their               “inventory” (destination knowledge).  True, you can sell a destination without ever going.  But there is absolutely no substitute for having been to a destination.  This is the knowledge that will give you credibility and confidence.

 

                        More about destination knowledge:

                       

The Travel Institute, in conjunction with tourist boards around the world, offers Destination Specialist Certifications.  The “DS” certificates include specialized training and testing- and a special familiarization trip to qualified agents at the end of the course.  However, some European countries are electing to end their participation in DS training because more and more consumers are booking these destinations directly online. 

                          

What does this mean for you?  It means that coveted “fam” trips will be harder and harder to come by.  It means that the relationships YOU build with individual suppliers will be more important.  Every supplier/tourist board/airline has a list of preferred vendors (businesses that sell more of their product).  Make an effort to work with one or two suppliers on a regular basis.  The more you get to know people at the supplier- the better chance you have of being invited on a “fam”.

 

                        A little about travel conventions: 

A good way to combine training and travel is to attend travel and tourism conventions.  Unlike other business-related conventions, travel industry conventions are almost always held in unusual places such as Thailand or Scotland…and they are FUN!  Convention costs are fairly low (members pay very little to attend) and participating suppliers offer fantastic rates  and perks to attendees.  Not only is it an excellent way to see a destination, but it offers a great way for home-based agents to begin networking in the industry.

8. What is the IATAN card?

      http://www.iatan.org/pdf/126.pdf

      http://www.iatan.org/pdf/140.pdf

 

Remember, IATAN is an industry organization that recognizes travel agents, issues the IATAN Endorsement and also issues the travel agent ID card known as an IATAN card. When “card mills” first reared their ugly head over a decade ago, they were selling knock-offs of the IATAN ID card with IATAN's logo on the face of it. Today, this has all but ceased. In order to obtain an IATAN ID card you must either have an IATAN endorsement or work for an IATAN endorsed travel (host) agent. You    must meet certain revenue requirement (subject to audit by IATAN) and    pay the going rate to get the card (around $20).

 

Once again, the IATAN ID card does not entitle you to any benefits, but   will prove as credible travel industry documentation if required by a hotel, car rental company or tour company before issuing travel industry reduced     rates. The IATAN ID card is required by many of the suppliers on the commercial side of the travel industry.