The Professional Association of Host Agencies (PATH) addressed the role of host agencies and independent home-based agents as well as the controversy over JoyStar in a statement that defines the responsibility of hosts and agents. “PATH applauds the travel suppliers and associations, such as CLIA and IATA that have properly policed the companies that have been found to be in violation of industry standards or licensing by revoking their accreditations,” PATH said. PATH has 18 members representing well-financed, established host agencies and collectively represents thousands of successful home-based independents.
“Peter Stilphen (Coral Sands Travel and a critic of JoyStar), who has been very vocal regarding Joystar and other MLM host models, while a member of PATH, is no longer on the board and does not speak for PATH as a whole," PATH said. "The fact is that Joystar was never a member of PATH. PATH will continue to focus its energies on the positives of the reputable, legitimate host agencies.”
Reviewing the evolution of host agencies, PATH said:
“The host agency segment of the industry has grown exponentially over the last 30 years. However, some of the biggest growth was seen after the airline commission cuts of the mid-1990’s and 9/11. This was a time when a lot of the smaller “Mom & Pop” agencies were having a difficult time keeping their doors open and they closed up shop and moved their businesses home or to a larger agency as independent contractors. As the trend continued to grow and the reputation of the home-based agent improved from being categorized as hobbyists to those who could be legitimate sellers of travel, so did the companies who saw an opportunity to provide services to them. Since this time, a proliferation of different host agency models has emerged. There has been a large emergence of quality, reliable and reputable host agencies offering technology and services that were historically out of reach for the typical independent contractor. Unfortunately, along with the reputable hosts have also come some companies with questionable motives and business practices. Today, the strongest hosts that operate profitably are those that have developed programs specifically to support the needs of the home-based agent.
“When a host agency, such as Joystar, allows their seller of travel registrations to lapse, or has financial problems, it affects not only their affiliated agents, who are left without commissions and a booking source but also other hosts and suppliers," PATH continued. "There is a ripple effect throughout the industry. However, it is the independent contractors who trusted in these hosts that are affected most. PATH is now concerned that there may be host agencies that will try to take advantage of this situation by luring them over to their agency on false premises, offering bonus signing commissions and promises to cover lost commissions. What agents must remember is a basic financial tenet: the host agency’s income must exceed expenses to generate a profit so they stay in business thus pay out agent commissions. The board of directors of PATH has great empathy for these agents and offers the following advice for anyone looking for a new host agency."
"One of the most important decisions a home-based agent makes is the selection of a host. Your host is your partner," said Andi Mysza, president of PATH and president of MTravel.com, a division of Montrose Travel. "Your host should be financially stable and able to weather a turbulent economy. If you're at all concerned about your business, take the time to research the 'reputable host' market including host track records. As a result of our membership criteria, PATH has already done much of the work for you. You should be able find a host who will complement your business and provide the support to help you grow your company."
“There are numerous reasons for agents to align with a reputable host agency," claims Anita Pagliasso, vice president of PATH and president of Ticket To Travel. "However, the agent should do their due diligence not only before signing an agreement but also throughout the contracted period. Read and understand all of the fine print, make sure that the commission terms are clearly stated and there are no violations of IRS rules governing an independent contractor. Find a company who has established its business as mainly a host agency and that the owners or executives who are held in high regard within the industry. Especially during these unstable economic times, ask if the host maintains a separate bank or trust account to hold the client’s payments and the agent’s commissions. A red flag should go up immediately if commission payments aren’t paid in a normal pattern. All members of PATH must go through a credit and background check as well as meet other stringent requirements. PATH is an excellent resource for any agent looking for a quality Host Agency Partner.”
“The recent economic downturn certainly has had an impact on our industry and there are a lot of good agents out there looking for a new host," Jackie Friedman, PATH Board Member and general manager of Nexion, Inc. "More than ever before, independent travel professionals should align with a strong host agency that is a good fit for you and your business. Do your homework and find a host that offers top commissions and competitive splits with the preferred suppliers you like to sell. Look at their technology and tools, training and networking opportunities. Determine if you want the size and strength of a large host, or the more hands-on approach of a smaller one. Look into the marketing support they offer, whether it be to help you acquire new customers or reach out to your existing base. Most importantly, ensure that they are financially secure and well-funded so that you can be confident that you will be paid on time. Take the time to talk to other agents that are working with the host(s) you are interested in before making a final decision. PATH can help narrow down your search for you. PATH has established guidelines and standards that member agencies have to adhere to. You can feel comfortable talking to our member agencies and finding the host that best meets your personal and business needs.”