What exactly is a home-based travel agent?
Defining the Term
In the early days of what I like to call the Home-Based Travel Revolution, the definition of a “home-based travel agent” was pretty straightforward. That was back in the 80s and 90s. But times change and what was once a small (and controversial) phenomenon has grown into a major force in the travel industry.
As this segment of the travel distribution system has evolved and matured, however, precise definitions are getting a bit trickier.
Broadly speaking, a home-based travel agent is anyone engaged in the marketing and selling of travel products from a home office. But that can cover a wide variety of different types of home-based travel agents who might have very different looking businesses.
Even so, in the travel industry and more specifically in the travel distribution industry, the term “home-based travel agent” is most often used to refer to someone who works out of their home office as an outside sales representative for a bonded, accredited travel agency, usually referred to as the “host agency.”
The home-based travel agent finds, qualifies, and books the customer; the host agency prints the tickets (if any) and serves as the conduit between the home-based agent and the travel supplier whose product the home-based agent is selling.
The home-based travel agent and the host agency share the commissions paid by travel suppliers according to a negotiated percentage split that reflects (or should reflect) the amount of work and effort expended by each party in making the booking happen.
But as we shall see, these days there are some “home-based” travel agents who operate out of commercial premises outside their home. So maybe the definition should revolve around the particular business model these independent agents use or group of strategies they deploy to reach their business goals. Some have suggested that “non-ARC agency” is a better term.
Some are even asking “Is the term home-based travel agent obsolete?” That is, whether we are a “traditional” travel agency operating form a “brick-and-mortar” location on Main Street, a home-baser working from a spare bedroom in our pajamas, or a hybrid business that has set up shop in a rented space, we are all just travel agents
Options for the Home-Based Agent
By definition (as well as by contract), the home-based travel agent who funnels bookings through a host agency is an independent contractor, which means that he or she has a great degree of freedom as far as determining how and with whom to do business.
By law, an independent contractor is not an employee. But what if a home-based agent does all her business with a single host agency, as many do? This can raise some tricky issues for both host and agent, which I discuss in The Home-Based Travel Agent Success Course, along with some simple steps you can take to avoid any confusion or problems with the IRS.
The freedom home-based agent enjoy as independent contractors means that, if they choose, they can function pretty much like any storefront agency, handling a wide variety of bookings and handling every step of the process, from finding prospects to making the booking.
But some home-based travel agents function simply as referral agents, funneling business to a host travel agency but not handling any of the booking details themselves.
Some home-based travel agents bypass host agencies altogether. One way to do this is to become a “cruise-only” agency. Another way to do this is to specialize in condominium vacations, a niche that has been underserved by traditional travel agencies and which is more than happy to deal directly with home-based travel agents. Other home-based travel agents simply market a limited number of travel products and form direct relationships with individual travel suppliers whose products they represent.
Some home-based travel agents specialize in forms of travel that have developed distribution channels outside the traditional storefront travel agency distribution channel. For example, some people are very content to market educational tours that not only offer extremely attractive pricing but allow the tour organizer (the home-based travel agent) to travel free and earn a stipend (a sort of commission) as well. Organizers of student travel, many of whom are full-time students, are another example of this approach.
Beyond The Home Office
Many home-based agent, especially those just starting out, operate from a simple home office.
But an increasing number of home-based travel agents aren’t home-based at all! Using the same strategies that originally allowed travel agents to work from home, some entrepreneurs are opening brick-and-mortar locations. Some are even creating their own teams of home-based agents working under them.
Home-based travel agents, of whatever description or level of sophistication, can work either full-time or part-time or only occasionally. That’s because the very nature of being an independent contractor is that no one can tell you when to work, how to work, or how hard to work. There are home-based travel agents who earn pin money, home-based travel agents who earn a tidy part-time income, home-based travel agents who bring down a substantial middle-class income, and home-based travel agents who earn six-figure incomes.
As you can see, there are so many variations and combinations that it is difficult to define the “typical” home-based travel agent. This means that virtually anyone can be a home-based travel agent, on their own terms and at their own pace, creating the type of home-based travel marketing business that makes sense for them. I cover all the possibilities in my home study course.
For more information on how to start up and succeed in a home-based travel agent business, CLICK HERE.