Hello everyone, I figured I would provide all with an FAQ based on questions that were being asked in case some had the same ones. Of course if you have questions not included here you can always reach out to me directly. The answers and guidance below should not be considered from a professional authority on each topic – it is strictly general in nature – but may help provide additional context around the various topics. And also, after the Q&A I answer the “why”.
- Will I be an employee?
You will be considered an “independent contractor” (known in the travel industry as an “Outside Agent” or “Outside Sales Representative”). You are your own boss, set your own hours. - Do I have a salary?
Your earnings are directly from supplier provided commissions built into bookings or service fees and/or markups you add to your bookings. While supplier commissions are generally pre-set, service fees and/or markups are completely up to you. - What is a host agency?
Provincial corporation and travel regulations require that travel agencies implement certain processes and accounting procedures and establish certain bond/security funds, among other things. This makes it very difficult for an individual to just start being a travel agent. A host agency is a travel agency like any other that is officially registered with the various provincial regulatory bodies and maintains all necessary procedures and insurance AND also provides an umbrella under which individuals can work as agents. - How do bookings, invoicing and client payments work?
All bookings, invoicing and payments are processed by you. You make bookings directly with our suppliers, generate client invoices in the head office accounting system, and provide suppliers with client payment information. An agent never collects funds from customers. - Do I need any particular certifications?
Different exam criteria are required for different provinces. These may be related to one’s permission to sell travel or may be related to being able to sell travel insurance. For example, in Ontario, TICO – the provincial travel regulator – requires agents pass a knowledge exam before they are permitted to sell travel. This is an exam based on a very straight forward study guide. Other jurisdictions may have others. Passing the exam is not a pre-requisite to coming on-board, you can join and then pass the exam. - Where will I be working?
You will be working from home; however, you are not permitted to have clients over to your home to conduct business; if you wish to meet with clients you must do so outside your home – this is a requirement of the travel regulation for outside agents (agents working under a host agency). - What are commission levels like?
Supplier commissions can range anywhere from zero (e.g. booking a basic economy air ticket) to 45% for some products. The goal would be to have a minimum of 10% commission on any file. In cases where commission is low or non-existent, you would want to apply either a service fee (line item on the invoice) or a markup (amount added into a booking cost not broken out on the invoice). - Are people still using travel agents?
People have never stopped using travel agents, and with the travel events of last March/April where people were stranded around the world plus all the new rules and regulations being introduced into travel, agents are becoming more relevant. - Do I pay income tax on my earnings?
Yes, the government always has its due 🙂 You will be issued a “T4A” at the end of the year accounting for all earnings paid to you. This is very much like a T4 however there will not have been any withholdings for tax, CPP, etc. – so you should always set aside amounts from your monthly earnings for such year end expenses. You will include the T4A amount on your annual income tax return. - Can I deduct expenses?
While I am not an accountant, in general, you can deduct legitimate business expenses off your earnings. This can include a portion of your home/apartment that is dedicated solely to your travel business (% of electric, heat, water, sewar, internet, etc); as well as direct expenses you may incur as part of conducting business (business cards, marketing, coffee with a client, etc). While the accounting is not complicated, speaking with a tax accountant is always best in these matters. - Do I need to set up a company?
While some may choose to set up a company under which they run their travel business, this is not necessary. Most outside agents simply run business as themselves (earnings and T4A are attributed to them personally). Again, should this be of interest, it will be best to speak with a qualified professional on the matter. - Do I need to register for G/HST?
Registering for G/HST is mandated (generally) when earnings within a year will exceed $30,000. Registering is easy and done online with the federal government. Some may choose to register for G/HST from the start which is also fine. - Who are my clients?
You will be marketing and selling to your own contacts and network that you already have or will build up over time. In the early days this may be family, friends and friends of friends. In fact, the best business comes from “friends of friends” because that 2nd level friend implicitly trusts the 1st who trust you, therefore there is an automatic trust and “lock-in”. Many will also work their social network (FB, Twitter, LinkedIn, etc.) with posts and solicitations for business. Your clients that you market and sell to will remain your clients. - Is there training?
Head office provides an online training program for all agents and you will have access to that. There is a mandatory onboarding training that you will be provided to ensure you know the basic of how the agency runs, the systems in place and contacts to know. Additionally there is regular supplier training presented either by head office staff or directly from our suppliers. Additionally there is a plethora of training provided by many other sources. Some include: becoming a certified destination specialist for a country with training provided by a country’s tourism authority; becoming a certified cruise specialist with a particular cruise line, or even a certified Disney specialist… the options abound. - What is the initiation fee?
This is the fee paid to a host agency to setup a new outside agent. For an affiliate of TravelOnly this is normally $2500. During the promo period offered by head office this was reduced to $199. This is a one time fee due at onboarding. - What is the license renewal fee?
This is the fee paid to a host agency for ongoing use of the agency’s resources and services like accounting, supplier contracts, insurance (E&O), corporate and industry registrations (TICO/OPC/BPCA), industry memberships (IATA,CLIA,ACTA), and consortium participation (Ensemble). In the case of my affiliates, the fee is due to head office on 01APR for every year you wish to operate as a travel agent under TravelOnly. - When would I need to decide?
You can decide and choose to come onboard at any time; however, the reduced initiation fee promo has only been made generally available by head office till the end of March. Decisions to join after this time would not benefit from the reduced initiation fee. - What is the rebate about?
The fee rebate that I mention is something that I am personally doing and has nothing to do with head office. For those that onboard during the promo period and attain a minimum level of earnings I will rebate back the discounted initiation fee. Additionally I have negotiated a full deferral of the first year license fee that would be due 01APR (normally first year pro-rated based on date of joining). I am doing it to help those interested get up and running in the industry.
Finally, while it has not really been a question posed to me, I will answer the “Why am I offering this”. I recall my starting days in travel back in 2007, how I craved to be in the industry and loved making travel plans and arrangements. Back then I had to pay full freight to get onboard. With the affiliate onboarding promo that head office announced in February I felt I could “hold open the door” to people with similar interest and motivation to start or continue their journey into the travel industry – whether that be a full time career move or simply a part time side-gig – the significantly reduced cost was something many might benefit from…. I am not here to sell anyone on a career change or get a side-gig… I won’t pressure anyone to join. I am simply here holding the door open for you. Should you choose to walk through I congratulate you and look forward to your success.
-Steve