Latest / Travel Agency in a Year / Day 164 - Outgrowing Your Host/Agency
Transcript
- Rachel K: Welcome back to the Travel Agency in a Year podcast. I'm your host, Rachel K. We are on day 164. Outgrowing your host. This is not just if you are with a big host like WorldVia or outside agents or Legato or I don't, there's so many. Anyway, Nexion, whatever. It's not just like outgrowing them. This can also apply to you if you just work under an agency that may or may not be hosted themselves. Okay. So full disclosure, I have not done this. I am still, well, I have done it, but I haven't. So background on my travel agent journey. I started out, ⁓ this was a side hustle. It was. I was girl bossing my way to the sun with a side hustle, and anyway. I was working as a butler. I wanted to do like a side job that got me discounts on travel. And so I'm I'm one of those people that's like, I'm gonna save so much money on travel. So I became a travel agent under an agency local to me. And I ended up leaving them and then going to a host, one of the bigger nationwide host agencies. And that's about the closest for transition, but that was more of like red flag sketchy Magoo stuff was going on and I wasn't getting paid and I was like, I need to just do this on my own. ⁓ not necessarily just outgrowing your host. ⁓ I did look into it back in twenty three and I decided against it because I'm not I'm fine with my host. My host don't bother me. It's fine. And I have sub agents on my team. And I know full and well, and I'm gonna tell you this because I had to explain this to one of my subs who went out on her own, I think twenty-five, January twenty twenty-five. They she'd been with me for like just a little over two years. And ⁓ it was sh I she did not need me. It's fine, she did not need me anymore. So With that being said, like I said, I expect agents on my team to outgrow. I want them to do enough business and feel confident enough to be like, I don't need you anymore, and go out on their own. Like I want that to happen if anyone joins my team. I do have I do have agents say, like, ⁓ I'll never leave. This is so great. But I'm like, wait until you make $150,000 in a year. Then you're gonna be like, I don't need you. So, and that and not in a mean way, just like you don't need me at that point. ⁓ Okay. Are you like when you are ready to leave or considering like this host, there's n there are there are legitimate reasons. Like the big nationwide hosts aren't gonna be scammy magoos. Smaller agencies can sometimes get a little scammy and scary and weird. that is not what I'm talking about in this episode. I'm talking about like you are just like I've outgrown this. So when you think about your current host or the agency you work for, are they still supporting you in the way that you need to be supported? Or are you just too afraid to take off the training wheels and go? Cause that can be a thing. When you are ⁓ maybe only doing like 50 to I don't know, 700,000 a year in sales, you're gonna need a lot more hand holding, not commission sales. Especially like your first few years when you're like learning the ropes and trying to figure out your boundaries in your business. So when you're hosted or when you're working for an agency, unless you are an employee, they can't really tell you how to run your business in many aspects, okay? They can show you what they do that works. And also they can't tell you do it exactly my way. So you're gonna spend a year or two just like navigating all of that. Like what do I like? What do I not like? How am I gonna do this? And it you're just gonna be tweaking little things. And a host can be a good support with a lot of trainings, a lot of introductions, so on and so forth. And the higher commissions that you can earn, albeit you will be taking a lower split because you won't be on your own. Once you are tracking towards like a million plus in sales, though, it kind of makes more sense. Like I probably don't need this help anymore. So after you've done like your first full year of over a million, you might be like, I need to think about this, and then spend it the next year, maybe, considering if you want to move. Okay, so let's talk about I got the fears and the choices. Do I want to ditch my host that supported me? Or you you work for an agency owner and you're like, they're so nice though. So let's talk about it. The fears. Supplier panic. When you go completely out on your own, if you don't have a solid book of business, they're just gonna be like, You're only gonna get 80%, stupid. You haven't sold crap. You know what I mean? And that like they just treat you like a brand new agent. If you don't have a solid book of business. I had that fear myself when I was looking at leaving my current host and then I decided against it. There's like extra noise. It's weird. Sorry. I was ⁓ I decided against it, but I contacted the suppliers that I did, I think one of them I did over a million in sales. ⁓ and I was like, I'm scared if I go out on my own, you guys are gonna be like eight percent. And they're like, Absolutely not. You would be at this because you have this book of business. ⁓ so that's why I'm saying don't just leave because you're mad at them. Leave if they're being bad news bears to you. And once you hit that multi seven figure sales, like booking, like over seven figures in sales annually, like for more than one year in a row, that's when you can be like, Okay, I've got a solid book of business. I have plenty of room to negotiate solid commissions if I go out on my own. Because you also have to keep in mind, in many cases, you're not getting 100% of that commission with your host. Okay. ⁓ another fear is getting your IATA Clea ARC, all the legal beagle, insurance, all that fun stuff. It can be intimidating, but so many advisors have done it. Okay. It's it's kind of a reason to stay stuck and not grow. Like You've outgrown your host, but you're using it as an excuse to not fully step into that new version of you, that full CEO. I'm taking full ownership of my business. there's also getting over abandoning those who got you started. So when one of my agents was like, I'm ready, I'm gonna go out on my own, we had a we had a good conversation and she was like, I just don't want you to hate me. I was like, I I was shocked because the way it worked was. She like renewed her contract. And then like three months later, she's like, I think I'm gonna go out on my own. And I was like, why did you renew the contract? I told you not to. You didn't need to do it. You did it anyway. And she's like, I think it's time. And I was like, I knew it was time. And she's like, I didn't want you to be upset. I was like, no, I'm not gonna be mad at you. I'm proud of you. So know that if you have like a truly supportive. Host or like an agency owner, and you're like, it's time for me to go, they're gonna be like, you got it, dude. Now a host might be more like, well, we'll give you 99.5% commission or we'll give you 100% commission. Like they'll give you much more stuff because you being hosted when you produce that volume of sales, helps them negotiate the commissions that all the agents that they host earn. So they do like to keep those people retained, you know what I mean? so if it's like host, they ⁓ they might be like, Well, what can we do to keep you here? How can we how can we do that? ⁓ But if it's an agency owner, most likely they might say the same thing, but they've also got their own book of business. So most likely they're just like, I'm glad to see you grow, super excited to see what you're gonna do. Okay, so when is it time to make the choice? When does it make sense? How much does your host cost you right now? And like I said, just a few seconds ago, they might be willing to negotiate that if you are producing a high volume of sales. But how much does it cost you? What is your split? Are you capped at your split? Can you never earn any more? what are your like monthly or annual fees for it? ⁓ is there anything else that they require you to invest in? What does it cost you? ⁓ then what's the cost of going out on your own? So, in the example of the agent who went out on their own with me. If she stayed with me, granted we do have a lot of like conversation still, but if she stayed with me, with her book of business, I would be doing really well. Like I would be making like an extra ten to twenty thousand dollars a year, something like that. but that would be like two straight months of my time helping her. You know what I mean? Well, not two one to two months. Just I can't remember what the volume was. But you know what I mean? If I'm averaging like ten K a month. That'd be s like fifty working days for me. Like no. That's not worth it for her to pay for two months. You know what I mean? ⁓ so what's the cost of going out on your own? You are gonna have to, especially if you don't just leave an agency owner and just go to a host, you're gonna have to get all of your credentialing in place. You're gonna have to probably take a hit on your commission, even if you do have a solid book of business, they're not gonna maybe not gonna give you the same level of commission. Some suppliers will and some companies will, some may not. And what is your opportunity cost? Your current split that you're paying. If you're at eighty twenty, ninety ten, ninety-five, five, ninety-seven, three, ninety-nine, one, your opportunity cost, that little fee that you pay out to your host, could that support the cost if you went out on your own? A VA service to help you get this transition going? Or a stronger marketing campaign. So you really want to look at those numbers. A strong marketing campaign. I'm not saying a marketing campaign. ⁓ so if you are questioning all of this, let's we've already addressed the fears. We've already talked about re when you need to consider really maybe changing, ⁓ or at least looking to see what's available out there outside of just staying with your host. ⁓ really look at your books, understand what your split is, and does the math still work for you for the value of the support a host provides? Does it work for you to stick with them or do you think you can manage going out on your own? I hope you found this episode amazing. If you're like questioning. Now, I'm just gonna cover real quickly. If your agency owner is not paying your commissions as it's outlined in the contract, ⁓ you should probably leave them. Just leave. If they try to enforce a non compete, I've heard I've heard of agency owners that are like, I know the host so well. If you try to go out on your own And join this host agency, I'm gonna tell on you and they'll deny it. No, that's a lie. That's an intimidation tactic. Like, there are some not good people that are agency owners, and I've heard absolute horror stories. Ugh. So anything like that, like that's abuse and that's manipulating and using you just to bring in money. There's no reason for that behavior, especially when it's an independent contractor agreement. Now, if you're hired on as an employee of a travel agency, and you know they are like hosts or whatever, but if you are an employee of a travel agency, they should be requiring you to sign an NDA and a non compete because they are giving you all of their trade secrets and they run the risk by paying all of your federal taxes and possible benefits and your salary. They run the risk of you being like, could totally do this on my own and stealing everything and then just starting your own agency. That's where the non-compete comes in because they are giving you legitimate trade secrets. A non-compete is really, really hard to enforce if they can't give you any trade secrets. There's no secret formula that they have, you know what I mean? And that's why it's hard to enforce with independent contractors. Okay, so if there's like any abusive behaviors from agency owners or if there are ⁓ delays in getting your commissions or if they start to rewrite the terms of the contract but they never send you an addendum to agree to. Like those are all big like you need to get out of that situation as soon as possible. ⁓ those are big glaring signs of like oopsie we made a mistake. Don't worry, I've made those mistakes. But this episode was more about just outgrowing and being like, I know I don't need a host and I know I can do this on my own. I want 100% like I want to be able to go to any DMC or tour operator in the world and not just who's preferred with my host. And I want to curate these really, really magical trips, like and I have this book of business, that's when it's time to like maybe consider have I outgrown my host. Also, fun fact I have interviewed many host agencies and for some reason some of them think that you cannot be double hosted. And I'm like, that's impossible for anyone to make the transition. You are treating them as an employee. Like, so your host agency cannot force you to only be hosted with them. Because again, you're an independent contractor. ⁓ And you have to make that transition. I've known many advisors who switch from one agency to like one host to another host. And it takes a few months. Like you can't, like you gotta stick with that host until all of your clients booked under those hosts' credentials travel, right? So the audacity, if you're like wondering if you wanna be a travel advisor or your brand new travel advisor, and you're like, My host is the greatest, and you just heard the words coming out of my mouth. And you know for a fact in their contract, because I know for a fact there are very quote unquote popular up and coming host agencies that say you can't be double hosted. And that is not right. So Well how do I know? Because I interviewed with them. And I was like, ⁓ I hope people don't fall for your tricks. They are. Sorry about it. Anyway ⁓ you have to be able to transition. You can't. That's ridiculous. So I don't know, that's just some information. I went on a tangent there. I hope you all enjoyed the episode today. ⁓ you can also decide to stay with your host indefinitely. That's kind of my plan. I like my host. I like the fees. I like the split that I have. I like the suppliers that I work with through them. I like I mean, I don't need a whole lot of help from them. I don't need a lot of hand holding. I'm Eight years in, and I'm six years in with them, so I just don't mind them at all, and I don't intend on changing because there's no reason to, for me at least. ⁓ so that's another option, too. Okay, day 164 on the books recorded. I hope you have a wonderful day. Bye.