Peter Stilphen, Coral Sands Travel, and founder of STARS, a newly formed professional group, has created a new “bi-partisan” website (www.choosingahostagency.com) in hopes of helping new and experienced travel agents make better, more informed decisions when choosing a host agency and urging changes in industry ID card distribution and creation of escrow accounts by host agencies in event of a financial failure.
The site is is partnered by some host agencies who feel that the travel agent should be more knowledgeable when choosing a host agency, Stilphen says. All host agencies are invited to join and there is no cost involved. Host agencies can go to www.thebrighteststars.com to complete an application.
The website also has a forum, where anyone can register and ask questions concerning host agencies. “We plan to enlarge the site as the list of supporting host agencies grow," Stilphen said. "We will be creating a testimonial page for industry executives to express their views on the value of this site. The website will be optimized for search engines, hopefully, to be seen by those seeking a host agency as well as offering links to other websites. It is extremely difficult for any experienced travel agent, never mind the new agents coming into this industry, to really distinguish between each of the various business models of these host agencies. It is vitally important for new and experienced travel agents to do the necessary research before signing on with any host agency.”
Stilphen is also urging action by host agencies CLIA and IATAN/IATA to change policies that he believes are vital in view of the Joystar/Travelstar bankruptcy and the legal problems of YTB.
“Host agencies offer a great deal of support, are accepted by all the suppliers and organizations and have technology in place," he said. "The non-traditional or non-host agencies, as I refer to them, with referral agents, certified agents and other descriptive or gimmicky names or initials generally only offer support and training selling their company and their business opportunities. They utilize simple booking websites and/or call centers."
Stilphen’s recommendations for industry discussion include:
* Host agencies should be required to maintain a commission escrow account or insurance that protects the travel agent in case of insolvency by the host agency.
* The host agency should eliminate the 100 percent commission programs. They are unfair to host agencies and suppliers and are unprofitable. The only benefit to hosts is they build volume with the supplier.
* CLIA should eliminate the extra photo ID cards afforded to their member agencies.
* The word "insolvency" should be spelled out and applied to those hosts that have demonstrated they are not paying their agents. Insolvency along with any Chapter 11 filing by that host agency should automatically allow the transfer of bookings on any reservation that as yet a commission has not been paid to that host by the supplier.
* Requirements and rules should be implemented that deal with or forbid those host agency models that promote multi-tier commission programs.
* Host agencies should be forbidden to offer photo ID cards to their affiliates for any reason other than as a membership card. They should not have any numbers on the card except an internal number issued by that host agency.
Stilphen also believes that some suppliers have a problem with host agencies. "They feel the less productive agents should be receiving 10 percent commission rather than the much higher commission paid to the host agency," he said. "The problem with this thinking is the host agencies must pay the higher rates to their agent affiliates to keep them as affiliates. The host agency is really an extension of the supplier as they too, provide training and marketing tools incurring a cost, while attracting more agents to sell more of the supplier products. It is when the host agency is providing little or no training or support when the supplier should be considered paying too much commission. The multi-level-marketing host agency is a good example."