Headquarter Happenings: For Host Agency TPI, Treating Agents as Business Owners Is Key

Editor’s Note: Headquarter Happenings keeps you updated on the marketing and technology programs of major travel agencies, host agencies, travel agency consortia, cooperatives, travel networks and franchise groups.

When Jenn Lee first began consulting for Travel Planners International (TPI) in 2015, she was taken aback by the host agency sector. Lee found most host agency branding to be hopelessly outdated, and it looked to her like the host agency model was in danger of going the way of the Blockbusters video rental business.

Lee, who in March 2016 joined Travel Planners International as vice president of sales and marketing, said recently that although top host agencies were providing great support and marketing for their agents, “it was old information.” Moreover, she said, “no one was looking outside the industry to say what is it today’s consumer is looking for in a partner. For hosts, the consumers are the agents.”

Another thing that bugged her: Most host agencies weren’t treating their agents as business owners. “The industry calls them independent contractors. I don’t get that. They’re not contractors – they don’t hang drywall. These are small business owners.”

That shift in perspective – from seeing hosted agents as independent contractors to treating them as small business owners – underlies just about everything TPI does today, said Lee, who prior to joining TPI was a business consultant to entrepreneurs.

30 years old and growing
Headquartered in Maitland, Florida, and this year celebrating 30 years in business, Travel Planners International is co-owned by President and Co-founder Ken Gagliano and his brother, COO and Executive Vice President Tony Gagliano, Jr.

The host agency posted $258 million in sales in 2017. At last count, it had 4,062 member agents. Of those, some 3,000 are what TPI calls agency owners; another 1,000 are sub-agents or associates of agency owners.

For the last decade or so, TPI has averaged 15 percent year-over-year growth, based on commissions received, Lee said.

Member numbers have been trending upward, too. Last year, the host brought on 800 new agents, for a net gain of 600. Forty-seven percent of them were new to selling travel.

The net membership growth is a change from a few years ago when TPI’s numbers were holding steady at around 3,000 agents. “There just wasn’t enough emphasis on helping our agents understand that this isn’t about travel for yourself – you’ve opened a business,” Lee said.

Most TPI agents sell less than $300,000 in travel annually, and most sell travel while holding down other jobs. This doesn’t necessarily mean they’re selling travel part-time, Lee emphasized. “We have tons of agents who have full-time jobs yet still produce $300,000 to $400,000 a year in sales. If I were to ask my agents, they would say they have two full-time jobs.”

Fee structure
There is no minimum sales requirement for joining TPI, nor do agents sign long-term contracts. But starting this year, travel industry newcomers must complete an approved industry training course before joining. “We’re saying that unless you show us you’ve got that fortitude [to be a successful travel agent], we don’t want you in TPI,” Lee said.

TPI-hosted agents pay inclusive monthly fees tied to their chosen commission split. Current fees are $20 a month for a 70/30 commission split, $30 for 80/20, and $40 for 90/10. The only additional fees are for direct mail marketing and toll-free phone lines.

New technology platform
Technology is the top priority for TPI right now. The host agency has teamed up with Trisept Solutions to provide an agency management platform that will integrate search, booking, client relationship management, back-office and data analytics functions.

Nearing the final stage of development, the platform, called Suitcase, has some notable features, including a search function that uses IBM Watson’s artificial intelligence to understand conversational language and deliver personalized results.

This capability is super important for the many TPI members who are new to selling travel, Lee said. Currently, inexperienced agents search the web and turn to their peers on TPI’s Facebook groups when they have questions like how to plan a family trip to Europe. With Suitcase, Lee explained, “they’ll be able to type that in with natural language and it will populate their screen with options attached to the CRM and preferences for their clients.”

Suitcase’s data analytic capabilities and AI technology will allow TPI agents to be “more efficient and spot-on when they quote a client,” and more effective and targeted on social media, Lee said.

TPI expects to roll out the new platform starting in late summer, with full integration in January 2019.

Training and conferences
One area where Lee sees room for improvement is in TPI’s training, particularly for industry newbies. In 2017, the host launched an Agent Engagement department that focuses on helping new entrant agents in their first year with TPI.

TPI has added on-site classes at its Florida headquarters that train members on how to take full advantage of its tools and is working on developing more training videos. It also offers Facebook Live sessions almost daily with suppliers.

Last year, TPI revamped its conference schedule. It now runs its main conference, TPI Rocks, every other year instead of yearly; and on the off-years, the company offers four regional conferences. TPI Rocks will take place this year in late August aboard Royal Caribbean’s Harmony of the Seas.

Rethinking the host agency model
Looking ahead, TPI is focused on nothing less than redefining the host agency model, Lee said. “We are actively trying to figure out the next rendition of what a host agency is. Once we nail the new rendition, it’s going to benefit all our agencies.”

The entire host agency sector is going to have to shift, in Lee’s opinion. “It can’t just be, ‘I offer good service.’ It can’t be higher commissions alone. It has to be more.”

In the meantime, TPI will continue to operate at full throttle, in a culture that Lee described as “crazy, sleep-deprived, obsessed with our agents, forward-thinking. It’s a fun family – in your face, no holds barred, no apologies.”