Over the years I have talked with thousands of new home-based travel entrepreneurs and noticed that just about every one has similar questions. Here are the top questions I have been asked over and over again. I hope the answers help you on your way.
What Kind of a Travel Agent License Do I Need?
Most People are amazed to find out that their is no license or other criterion to become a travel agent. Just about every other type of agent is licensed and regulated by the state they operate within. Imagine opening a real estate office with no training or with out a Real Estate Broker’s license. Many states have enacted “Travel Seller’s” registration programs and some require financial contributions, bonds or letters of credit in order to operate within their state. The travel industry’s professional designations are offered by various groups such as The Travel Institute, ASTA, ARC and CLIA.
In many states you can simply print up your business card and you are considered a travel agent. However, most suppliers will not recognize you if you try to do this. Click HERE for complete information on the licenses you may need and the states that require you to register.
How Much Money Can I Make as a Home Based Travel Agent?
As in all businesses, your income is going to depend primarily on how hard you work, the products you sell and your overall volume. While the minority of home-based travel agents earn more than $100K per year, there is a growing number that do. Having a solid business concept and plan that is focused on profitability will take you a long way to achieving your monetary goals, as will focusing on the right opportunities.
The How to Start a Home-Based Travel Agency Workbook, will take you a long ways towards establishing your optimum business plan for achieving your goals.
What is an ARC or IATA Number?
Years ago (before the Airline Deregulation Act of 1981) travel agents had to be a member of either the Air Traffic Conference (ATC) or the International Airline Transport Association (IATA) in order to do business with suppliers. Since the travel industry is an international business, IATA was charged with developing the numbering system so that registered travel agents could each have their own unique IATA number that appeared on every airline ticket they issued and identified them solely. The Deregulations Act that mandated competition in the United States airline industry banned IATA from doing business in the U.S. and ended the ATC’s dominant reign. It also created the Airline Reporting Corporation (ARC) (a for profit corporation owned by the member airlines) to carry on the business activities of both the ATC and IATA.
IATA started a network of agents in the U.S. known as the International Airline Travel Agent Network (IATAN) to continue to list travel agents on behalf of the International airlines. The issue of assigning travel agent unique numbers still existed in the U.S. and it worked out that both the ARC and IATAN simply arranged for blocks of numbers from IATA to use within the U.S..
Today, ARC is the premier organization identifying non-airline appointed travel agents. Individuals can obtain a VTC (Verified Travel Consultant) designation from ARC and be issued an ARC number. VTCs also enjoy many other benefits such as the Marketplace and Helix. Don’t fall for other companies claiming to offer travel agent numbers. Ask if they are issued by IATA. If they are not, don’t bother.
What Kind of Travel Agent Discounts Can I get?
This is one of the least understood facets of the travel industry. Many outsiders thank that the airlines will upgrade travel agents to first class by showing a business card, or that cruise lines will give travel agents free cruises, or that resorts will give travel agents upgrades to suites just because they are travel agents.
Here is the truth. Airlines don’t consider travel agents as a valuable distribution system as evidenced by the fact they have totally eliminated travel agents from the sale of airline tickets by eliminating the commissions they once paid. You stand a better chance of getting upgraded if you showed your AAA card rather than a travel industry business card. The people flying first class are the frequent flyers, not travel agents. Ditto for airline discounts. I travel at least once a month and have been in the industry for over 35 years. I still shop my airfares like every consumer does. I know some neat tricks I use against the airlines to save money, but I haven’t flown on a travel agent pass in at least two decades.
Ditto for hotels and resorts. Many may offer a “travel agent’s rate” but if you flash your AARP or AAA card you are likely to get a better rate. Most hotels will require an IATAN ID card before they will confirm the rate. There are some hotels and resorts that will pass along industry discounts during their slow times. If you have given business to a particular hotel or resort, you might expect they would accommodate your request.
During slow periods, some cruise lines will offer travel agent’s rates to fill cabins. You generally will have to prove you are in the business with either an ARC, IATA or CLIA number or some other criteria.
The travel industry conventions and trade shows are certainly bargains that allow one to travel substantial savings and many of the industry associations offer travel agent seminars and fam trips on ships and resorts all over the world.
While there are substantial benefits to be had by entering the travel industry, there is no entitlement simply by being in the travel industry.
What is an IATAN ID Card?
Remember, IATAN is an industry organization that lists 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.
ARC VTCs will shortly gain an ID card that will be widely recognized within the travel industrym which is even more incentive to join the VTC program.
Do I Need to Register to be a Travel Agent?
While there is no license required to be a travel agent in any state (like getting a real estate license from the state is mandatory to be a realtor) many states do require travel agents to register and either post a bond, pay into a restitution fund or meet other requirements. Hawaii. California, Nevada, Ohio, Florida and Oregon (pending) are just some of the states that require you to register. States that catch you selling travel without being registered and conforming to their law will fine you, or worse.
What is a Host Agency?
Many home-based travel agents work through another travel agency to gain full access to the industry, support and back up when they need it. Generally, the host agency take a percentage of the commissions generated from the sale of travel but there are some that also charge a flat transaction fee. Some host agencies charge up-front fess and others do not. The main question that you want to ask is what you are getting for the up-front fee. It is justified, then there is no problem.
The price alone does not qualify the host. As an example there are quality host agencies that will charge $495 for you to join their program. This might be well worth it. The figure $495 is used commonly because it falls below the $500 minimum where the sale of a business opportunity meets substantially higher business standards.
Finding your host agency is one of the main tasks that you will initially be confronted with and by reading “How to Start a Home Based Travel Agency” you will be miles ahead of someone who has not.
Do I Have to Have a Host Agency?
It just depends on a large number of factors. The cost to establish an agency in your state (because of state registration requirements), your business plan needs, your expectations from your business, the amount of time and effort you intend to invest and your overall business plan will lead to the answer. In Nevada, as an example, you must post such an enormous bond to establish and agency that most home-based travel agents are forced to go through a registered host agency.
Liability is another key factor in making the decision to use a host or not. By understanding your options fully and establishing some sort of business plan, this question will answer itself as you progress.
Can I have More Than One Host Agency?
Actually, the independent contractor laws almost preclude you from having only one host agency. If a host agency dictates that you can only do business with them, they are exercising an element of control over an independent contractor that may violate his or her independent contractor status.
How Do I Know a Host Agency is on the Up and Up?
his is one of the most difficult things to do when you are first entering the travel industry. You will run into all kinds of “opportunities” where you can become an agent overnight for a small investment. They usually have an aggressive recruiter who makes you a special offer to sign up, or maybe you will go to a meeting with other “travel agents” who talk about their fabulous savings on their own travel, maybe you will find an Internet site that simply sounds too good to be true, these are all possibilities and you must be prepared for them with a firm resolution to find your way through the maze.
You are doing the exact right thing by exploring this website and finding out about the travel industry as it really is. Hopefully you will buy my books to complete your search for information before you spend any money, but for all of you that deserve a break (even if you do not buy my books) I have compiled a list of home-based travel agent host agencies that have stood the test of time, have a happy cadre of home based travel agents and that are respected within the travel industry.
Please understand that there is no way for a host agency to get on this list unless it has the best reputation. The reason for this is that most of the less professional host agencies have recruiting plans that pay handsomely for new agents and would gladly advertise here.
Don’t fall victim to folks trying to sell you a book of host agencies. Of course, they sell advertising to the host agency and then charge you for the book. What you want is a list of qualified host agencies that have stood the test of time, ethics and financial stability. The more desperate the host agency, the more they will spend on advertising. Besides, why spend money on something I am giving you for free?
What is the Normal Commission Split?
While there is no “normal” commission split, there is a correlation between the amount of work and responsibility that you assume and the amount of commission you will receive. Beginning and referral agents will require a good amount of time and effort on the part of the agency so would receive a very minor portion of the commissions generated by their efforts. Usually most referral agents receive from 10 to 30% of the commissions generated from their efforts. Agents doing more of the work on behalf of their clients can expect to receive from 30% to 70% of the commission and those agents that really do not need any hand-holding can earn up to 100% of the commission from a host agency. It just depends on the agents and the host agency’s needs at the time an agreement is reached.
Where Can I Get an Education on Becoming a Home-Based Travel Agent?
Actually, the most important thing to remember is that the travel industry has changed dramatically within the last few years…and it continues to change. After reading my books and completing the workbook, you will be ready to embark on your travel venture. The education that you will require will depend on your specific business plan and objectives, but suffice it to say, there is no set educational format one should follow. For a lot of information about educational opportunities, read the area of this website that is focused on education and training.
Of course I would highly recommend buying our books on starting a home based travel agency as it will dramatically reduce the amount of trial and error involved in the process.
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