Chapter Fourteen: Opening a Home-Based Travel Agency
What Type of Home-Based Agent Should You Become?
So you’ve decided to become a home-based agent. Now what? The first thing to consider is exactly how you are going to secure commissions…your bread and butter! Commissions come from suppliers. But suppliers ONLY give commissions to ARC/IATAN designated agencies. And obtaining these designations can be pretty tough! So what do you do? You either meet the tough qualifications… or you affiliate yourself with an agency that already has these designators. Interested? Read more.
1. Traditional
Host Agencies:
A traditional host agency is usually a local travel agency provides the home-based agent with travel resources, access to a CRS system online, and ARC/IATAN designations in exchange for a “commission sharing” structure. Most host agencies usually split commissions (50/50) with host agents.
Referral Agent- Some home-based agents simply “funnel” new business to a host agency but do not actually handle any bookings. Host agencies usually provide a modest “referral fee” for leisure bookings.
Independent Contractor/ Sales Representative- An independent contractor is basically a sales representative for a locally bonded, accredited ARC/IATAN agency. The home-based agent finds, qualifies, and books new customers. The agency prints tickets and acts as a conduit between the home-based agent and the various travel suppliers. The commission is “funneled” through the agency. The host agency shares commission with the home-based agent. The average commission split is 50%, but some agencies adhere to a sliding scale that offers the home-based agent more commission with increased bookings or business.
2. Supplier
Sales Representatives:
Many suppliers such as Carnival Cruise Lines offer commissions to home-based agents without any official designation in exchange for recommending and booking only through that supplier. For example, some home-based agents only sell Carnival Cruises. Carnival is their “niche”. These home-based agents do not affiliate or share commission with any host agency because it is not necessary.
3. IATAN Travel
Sales Intermediaries:
(International Airlines Travel Agent Network)
The IATAN designation is absolutely necessary to begin receiving commissions. In the past, most home-based agents simply used the host agency’s “IATA number”. Now, qualifying home-based agencies can receive their own IATA number either by meeting certain qualifications- or by affiliating with IATAN Host Agencies that only act as a “temporary host” until the home-based agent can meet the qualifications.
IATAN “TSI” Designation
Qualifications:
- The applicant must be an IATAN agency for two of the past five years.
- $200,000 in gross travel sales, or $20,000 is travel commissions in the past fiscal year.
…..or if the applying agent want immediate designation
- The applying home-based agent must show an immediate $25,000 commitment to the new business.
Home-based agents that do not qualify can choose to affiliate with an IATAN host agency. These host agencies are different from traditional host agencies because they are a temporary host agency. Some share commissions. Some only charge minimal fees. Home-based agents usually affiliate with the IATAN host agencies until they meet the qualifications (above).
4. Hybrid Host
Agencies:
Hybrid host agencies combine the benefits of a traditional host agency with the buying power of a travel consortium. Home-based agents enjoy the benefits of the IATAN/ARC and other important designations, but are able to operate under their own name- not the name of the host agency. The “hybrid host agency” usually charges a monthly fee (between $50 and $200 per month) and retains a lower share of the commission (somewhere between 10% and 30%).
Because these host agencies represent so many home-based agents, they are constantly negotiating hirer commission structures with various suppliers. These “commission overrides” are passed on to the home-based agent.
http://www.itasn.com/index.html
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Activities:
a word document to be e-mailed to the instructor.