THIS MONTH'S TOPICS
Hello Fellow Travel Professionals,
Welcome to my newsletter where I discuss the travel agent distribution system with straight talk, sometimes with humorous thoughts and sometimes down right provocative. I have been doing this for five years in an attempt to inform travel agents, host agencies and suppliers about what goes on in our little, but very important, segment of the travel industry. My agenda is simply to get you to think and hopefully act to make life easier in this great travel business.
I plan to continue working for a better and stronger travel agent along with the Host Agencies and Suppliers with which they work. We will always have the bad guys in our business therefore, my job is to continue exposing them and providing the insight to travel agents and suppliers hopefully, enabling them to make better decisions.
As usual I will discuss specific agencies and suppliers, especially the cheaters, the MLMs and the card mills. Of course we need to mix up all this seriousness with the Shrimp Lady's misadventures and my attempt at a little humor. I generally send out my newsletter twice a month with the second version being more of an updated version of the first. I apologize to those who have to read my newsletter twice but you never know you may have missed something the first "go round."
JOYSTAR TRAVEL AGENTS NEED YOUR HELP!
Many former JoyStar travel agents have joined together to force JoyStar into bankruptcy. This creates legal expenses that must be paid up front. The attorney's fees, to this day, have been furnished by the travel agents. However, it will take more fees to bring the case to a point where a court appointed Trustee will take over. Host Agencies, Suppliers and Organizations are being asked to contribute to the legal fund. We hope all of you, as well as other travel agencies, will help these agents and do what is right to bring justice to an unscrupulous CEO and JoyStar. Please send any amount to:
Checks should be made payable to:
JoyStar Agents Legal Fund
C/O Drew Axelrod
823 S.E. 18th Street
Fort Lauderdale, Florida 33316
email:cruisegroups@hotmail.com
Only one Host Agency has donated any money. The legal costs now exceed the contributions. It was a Host Agency who created this problem. I feel Host Agencies should be willing to help out as well as those organizations who are supposed to be behind all travel agents.
JOYSTAR TIDBIT
Joystar recently filed with the court their supposedly 20 largest unsecured creditor's list. As I had written about years ago, their financials raised some red flags. One being the payroll tax liability which I reported back then. The IRS and State of California is owed almost $870,000 in some form of payroll tax liability.
It is my opinion besides the tax problems, there will be SEC questions and an investigation by both the Florida and California State Attorney General's office into both JoyStar and it's CEO Bill Alverson.
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I have written a great deal concerning Host Agencies over the past 5 years. Due to recent events with JoyStar, a large Host Agency collapsing, YTB and other multi-level-marketing Host Agencies being in difficult times along with some pure card mill Host Agencies such as Global Travel International, it is time we discuss again the various Host Agency models and the way they operate.
It is extremely difficult for any experienced travel agent, never mind the new agents coming into this industry, to really distinguish between each of the various business models of these Host Agencies. It is vitally important for new and experienced travel agents to do the necessary research before signing on with any Host Agency. We have all said that but, there the statement sets with nothing happening. I have taken the next step by creating a bi-partisan website explaining exactly what steps one should take before choosing their Host Agency. This site is sponsored by several of the mainstream Host Agencies and gives you an explanation of what is a Host Agency, the various business models, check lists and questions to ask the Host Agency candidate. You can enter the site from the link below.
Looking down the road at the future of Host Agencies, I see the necessity of making new rules by such organizations as IATAN and CLIA. Any travel agency who brings in outside agents, or as we call them, independent contractors, likes to refer to themselves as a Host Agency. The basic difference between a Host Agency and a travel agency with outside agents, referral agents, etc is how the agency is structured. Host Agencies offer a great deal of support, are accepted by all the suppliers and organizations and have technology in place. The non-traditional or non- host agencies, as I refer to them, with referral agents, certified agents and other descriptive or gimmicky names or initials generally only offer support and training selling their company and their business opportunities. They utilize simple booking websites and/or call centers.
Some suppliers have a problem with Host Agencies because they feel the less productive agents should be receiving 10% commission rather than the much higher commission paid to the Host Agency. The problem with this thinking is the Host Agencies must pay the higher rates to their agent affiliates to keep them as affiliates. The Host Agency is really an extension of the supplier as they too, provide training and marketing tools incurring a cost, while attracting more agents to sell more of the supplier products. It is when the Host Agency is providing little or no training or support when the supplier should be considered paying too much commission. The multi- level-marketing Host Agency is a good example.
I would like to recommend to IATAN and CLIA they consider some new requirements. Here are a few suggestions that won't win me any points with Host Agencies but should be discussed.
1) Host Agencies should be required to maintain a commission escrow account or insurance that protects the travel agent in case of insolvency by the Host Agency.
2) The Host Agency should eliminate the 100% commission programs. They are unfair to host agencies and suppliers and are unprofitable. The only benefit to Hosts is they build volume with the supplier.
3) CLIA should eliminate the extra photo ID cards afforded to their member agencies.
4) The word insolvency should be spelled out and applied to those Hosts that have demonstrated they are not paying their agents. Insolvency along with any Chapter 11 filing by that Host Agency should automatically allow the transfer of bookings on any reservation that as yet a commission has not been paid to that Host by the supplier. This would be a good challenge for a good attorney. Members of IATAN, CLIA and USTOA would look into creating these or similar rules and also, perhaps this would allow a bankruptcy judge to grant the transferring of agent bookings with less hassle.
5) Requirements and rules should be implemented that deals or forbids those Host Agency models that promote multi-tier commission programs.
6) Host Agencies should be forbidden to offer photo ID cards to their affiliates for any reason other than as a membership card. They should not have any numbers on the card except an internal number issued by that Host Agency.
Most Host Agencies are apathetic and reluctant to "stir the pot" as I do. Due to my strong views on many issues I receive emails almost everyday asking my opinion about specific Host Agencies or Hosts in general. Many have opened up to me with their experiences with some of these Host Agencies and I try to reply to them as impartially as I can. I rarely try to sell them on joining my Host Agency because I'm trying to remain as impartial as I can under the circumstances. Of course when a Host Agency goes out of business or is an MLM, I will try to promote my Host Agency, Coral Sands Travel. There have been many occasions when I have recommended another Host Agency because I feel the right fit is important to both parties. Of course, the ugly emails are also there, mostly from the MLM pseudo agents. I just need to remind myself about all the evil emails and blogs I used to receive from the former JoyStar agents and their CEO Bill Alverson that are no more.
I can focus on other menaces to our industry such as YTB, GTI, World Ventures and Traverus and hope I can change some minds before it is too late, again.
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Many of you have followed the misadventures of the Shrimp Lady for the past three years. The Shrimp Lady is based on a real travel agent of whom I have been following. I first saw her in a buffet line at a travel agent conference and trade show. She, along with many other agents, were not behaving responsibly at these conference meal functions and were dressed more as tourists rather than professional travel agents. It was when I noticed this travel agent putting shrimp into her pocketbook and then coming back through the line and cutting off pieces of ice from the centerpiece ice sculpture that I had to ask her why she was doing this. Her response was, "I need to keep my shrimp cold." The Shrimp Lady was born. You can read about her previous escapades at her own website at www.theshrimplady.com.
I managed to catch up with her recently at her new home on Sanibel Island off the west coast of Florida. She was gracious enough to grant me an exclusive interview. After all, we knew a great deal about her misfortunes but did not know much of her personally. We decided to ask her.
Peter: What made you move to Sanibel Island, Florida from Osark, West Virginia where most of your siblings live?
Shrimp Lady: My travel agency has been going great and I have been making excellent commissions these last two years especially since you started writing about me.
Peter: Could you elaborate more on that for our readers?
Shrimp Lady: Certainly! I have been receiving several inquiries from affinity groups whose members were suffering from different types of food disorders and fetishes. Much as I suffer from an insatiable appetite for shrimp.
Peter: May I ask you about these groups and how they led to you earning travel commissions from booking travel for these groups?
Shrimp Lady: Certainly! First of all I want to say that Coral Sands Travel inducing me to leave YTB was the biggest change for the better in my life. Coral Sands recommended that I specialize in a real niche that encompassed my own strengths and even weaknesses. Growing up with my severe fetish for food, I felt I could work with others in similar situations. I contacted a 5,000 member group called the Burpettes and another know as FSOA (Flatulent Society Of America) which had over 8,000 members.
Peter: Can you give me an idea of who they are and what these groups do?
Shrimp Lady: The Burpettes have been around for centuries. They believe after sitting down for a great meal that they feel a loud and deep burp is a way of thanking the host for a wonderful meal. They transformed all this into a way of converting spontaneous burping into actual singing. Today's Burpette group, once completing a good meal, breaks out into coordinated sounds of burping which does sound like some popular tunes. When I contacted them about doing their semi annual conferences via land or cruise, they were ecstatic. I recently booked one cruise for them with over 500 cabins. I now also handle all their individual bookings.
Peter: That's great! What about this other group FSOA?
Shrimp Lady: Actually they were tougher to work with but we have had success under certain conditions. For example, with regard to cruises; we have to book them only in balconies and they must have their meals in the open air, usually around the pool decks. We once tried inside cabins but that was a disaster. The Board of Directors, who were in the campfire cast of the movie "Blazing Saddles," has been great to work with. They really give a toot.
Peter: That leads me back to the question, "How did you obtain your shrimp fetish and why do you dress as you do when attending travel agent conferences?"
Shrimp Lady: My shrimp fetish probably comes from my father who was a shrimp fisherman out of Fort Myers Beach. He worked on a shrimp boat all of his life. We were a poor family and lived off the shrimp that he would bring home. I can't let a day go by without having my shrimp and as you have written about, I will go to great lengths to find it. I moved to Sanibel Island because this area is where my roots are in addition to being near my beloved Host Agency, Coral Sands Travel.
Peter: What about your colorful style of dressing at these travel events?
Shrimp Lady: I suppose the colorful clothing and heavy makeup comes from my mother who was, what she called, a self employed service technician. She worked the night shift and her uniform was a bright red dress. When I got a little older I would ask questions about why the red uniform, why she only worked the night shift and why all the loose change on her bedroom bureau? Her explanation was that the red dress stood her apart from other technicians such as the TV or washing machine technician; the night hours was because she could attract more business at night rather than the day and the loose change was just that, change from the dollar bills she charged for providing her service. I accepted these responses but I'm still not sure. I loved my mother's colorful clothing style and adopted most of it. The red sneakers, rather than spiked heels, allowed me to get away after my shrimp capers.
Peter: Speaking of your shrimp capers, could you explain to our readers why, when attending these events, you seem to be always chasing somebody? At the Atlantic City Conference you chased two show executives out of the hotel and down the Boardwalk.
Shrimp Lady: The reason I tend to pick on these travel industry executives and end up chasing them while throwing shrimp at them is because they were responsible for reducing and sometimes eliminating the shrimp on the buffet lines. I really get "ticked off" when they advertise free shrimp and end up substituting "pigs in a blanket" just to save a few bucks and embarrass me and my family. Rest assured that if Terry Dale tries to eliminate shrimp from the upcoming CLIA3Sixty Conference ACC/MCC/ECC function he will answer to me, my boyfriend Oscar and my siblings.
Peter: I really appreciate you speaking with me. Where are you off to next?
Shrimp Lady: I'm planning to go to the CLIA3Sixty Conference, as I mentioned above, in early April. I understand they are putting out a great shrimp buffet per Terry Dale. In addition, I have some unfinished business with my old friend Jim Smith who also loves shrimp. I want to say Peter that you are my favorite writer and Host Agency.
Peter: That's so nice for you to say that. Take care!
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Peter Stilphen, MCC, the acting Managing Director, of the newly created STARS has created a new bi- partisan website in hopes of helping new and experienced travel agents make better, more informed decisions when choosing a Host Agency.
The site located at www.choosingahostagency.com is partnered by some well known Host Agencies who feel that the travel agent should be more knowledgeable when choosing a Host Agency. All Host Agencies are invited to join us and there is no cost involved. Host Agencies should go to www.thebrighteststars.com and complete the application for Host Agencies. Again, there are no fees.
The website also has a forum, where anyone can register and ask questions concerning Host Agencies. We plan to enlarge the site as the list of supporting Host Agencies grow. We will be creating a testimonial page for industry executives to express their views on the value of this site. The website will be optimized for search engines, hopefully, to be seen by those seeking a Host Agency as well as offering links to other websites.
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I bet many of you YTB, TRAVERUS, WORLD VENTURES TRAVEL and other serious MLM travel agents are getting tired of being looked upon as second class travel agents by the mainstream travel industry. You are constantly hearing about the lawsuits, scam stories and generally the bad press that follows the MLM crowd, whichever rock they come out from under.
The problem is with whom you are associating and not you, the serious travel agent, who is at fault here. You just failed to do your homework or listened to a misguided friend that got you into this mess. The mess will only get messier as these MLMs begin to go out of the travel business or change their name again.
You can get a fresh start for 2009 even in a not so good economy. There are great deals out there and you can book with any supplier. Check out www.choosingahostagency.com and get started today.
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TO: Carnival Cruise Lines, Princess Cruise Lines, Holland America Line, Disney Cruise Line, Walt Disney Travel Company, Globus, Trafalgar, VAX Vacation Access, Travel Impressions, Cunard Line, Seabourn, Collette Vacations, MSC Cruises, Costa Cruises, Apple Vacations, The Mark Travel Company & Brands, Travel Guard and the rest of the travel suppliers who deal with the MLM travel agencies.
RE: Additional costs to deal with MLM
I bet you thought that offering a 16% commission and a few marketing bucks was a great way to deal with an MLM when you started. I bet you are wrong. Have you ever taken a look at the hidden cost of dealing with an MLM? When reputation is everything in this industry, I am surprised that you all are willing to sacrifice your hard earned brand image. Please consider the following:
Are you gaining more clients? Or just discounting your product?
· The bean counters all see the dollar signs for the bookings. But it has been proven that most of the sales are to themselves. So it is logical to assume these MLM participants would likely have traveled in any case and purchased via a more reputable means. All that is accomplished here is to cheapen your product by discounting--something many of the suppliers themselves prohibit. The alienation of your sales force by doing so is a whole other discussion. Perillo Tours found out that 90% of their YTB bookings were for the agents themselves. Sort of defeats the purpose of hiring an "agent" to do your marketing doesn't it?
What's happening to your reputation?
· What happens when one of these untrained MLM participants makes an attempt to market your product? I am sure you have seen some marketing attempts--many have been highlighted on this blog. And do you really want someone trying to sell your product, when their goal is to sell them into their scheme so they can travel for free?
· What happens when one of these so called "agents" decides to collect almost $100,000 from high school seniors and run with it? While Carnival obviously had no responsibility in that matter, the cruise line's good name was certainly dragged through the mud.
· What happens when you do offer reduced rate travel and these MLM participants descend and are soliciting your full fare paying customers? What type of taste does that leave in your customer's mouth? And why do these MLM "agents" need to be continually reminded on how to be professional?
What's happening to your money?
· Cruise lines are becoming more and more dependent on onboard revenue for their profitability. Has anyone bothered to do a study of the amount of money the MLM clients actually spend on board as opposed to that of a traditional agent? What about the MLM participants themselves? I was on a Carnival ship in November and witnessed a MLM agent from Traverus bragging that they got the cruise for next to nothing, had weaseled out of tipping, smuggled in a lot of alcohol and soda, and brought insulated drinking cups to keep them well lubricated. With all that planning, I am sure a nickel did not make its way to Carnival.
· Sure you pay some of these MLM companies top tier commissions, but for that, one would expect that the agent does the lion's share of the work. Are the MLMs pulling their weight? Have you looked at the time your internal people spend hand holding and re-training the MLM participants time and time again? Is it really worth it to pay 16% commission? I recently heard that a major cruise line flew staff from Miami to St. Louis to answer consumer calls during YTB's recent Sail-A-Thon. I suppose they did not want a repeat of the "service" handed out at last year's event. Honestly, it makes more sense to take the booking direct and not pay a commission at all.
How do your employees feel?
· Have you ever questioned your front line employees about how they feel dealing with the MLM agencies? I have. It is not pretty. You need customers for sure, but you also need employees who are excited to work for you. Why not offer an anonymous survey and allow them to voice their opinions?
· Ask your BDM's their honest opinion. I am sure you will be shocked. Be sure they know you want to know how they feel and not what they think you want to hear.
Do these "agents" know the product?
· On a recent blog post, a YTB Referring Travel Agent was insistent that a "tender" was money. While that is certainly a definition of tender, it is not the case in the travel industry. Most likely this agent is advising clients that while in George Town, Grand Cayman that they need to take money to get ashore.
· Speaking of the Caymans, the RTA that took off with the high school seniors' money--she advertised that the "boat" "docked" in "Grand Cayman". What impression is left on the consumer? And why are suppliers facilitating it?
· When Royal Caribbean made their move, most of YTB insisted that Lisa Bauer's promotion to the VP of the Hotel Operations was really a demotion for "dissing" YTB and that she was in charge of changing sheets in the pre-and post cruise hotels. Seriously, I am not kidding.
Is the interference worth it?
· From what I hear, many suppliers have received subpoenas from the California Attorney General requesting access to many financial documents related to the current suit against YTB for operating an illegal Pyramid Scheme. While I am sure that all suppliers operate on the up and up, additional governmental scrutiny can never be a good thing.
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Nothing but straight forward discussion of interest to the Travel Professional. No nonsense and carefully researched material to keep you awake and make you aware as well as sometimes to incite you.
This is our profession to build or destroy. Please don't ask, "what's in it for me," rather ask, "What can I do to make our profession better for ourselves and the future of the travel agent?"
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The companies listed below are either an MLM or a card mill. Some are both. I just cannot understand why some suppliers continue to support the 95% of these MLM affiliates when they are just consumers trying to discount their vacation. Some suppliers will say they support these companies because they can't separate the consumers from the serious agents. The solution is to stiffen the requirements for all incentives to travel agents. Of course, there are those suppliers that feed on pure greed for a sale and allow consumer affiliates to book travel and provide commissions. ( It's called "commission rebating" or throwing manure against the wall to see what sticks). It's OK for the suppliers but not the travel agent to rebate commissions. Suppliers who really care about the travel professional would not advertise on the MLM websites or display at their "smell the money" conventions.
Terminating the MLMs and card mills will not have an adverse effect on suppliers. The good agents will just move to a better Host Agency and sell the products from there, just as they did when they left JoyStar.
The following companies are either MLM's, card mills or financially troubled host agencies. If you know of others please let me know and I will add them to the list. If you find that I am incorrect in listing one of these companies, I will do a retraction in the following issue.
A-1 TRAVEL-VACATION.COM
ALL TRAVEL and CRUISE CENTER, INC
AMERICAN TRAVEL BUREAU
AMERICAN VOYAGER TRAVEL a/k/a GRAND VOYAGER TRAVEL
CASH CARD WORLDWIDE, now known as TRAVEL REACTION
COASTAL VACATION CLUB
GATEWAY ASSURANCE SYSTEM
GOLDRUSH GETAWAYS
EE TRAVEL BENEFITS
GLOBAL TRAVEL INTERNATIONAL Many hotels no longer accept their card.
FUN TIME VACATION CLUB
GAZOOBA TRAVEL
GT TRENDS formerly PRT TRAVEL
HOLIDAY PLANNERS a/k/a INFINITE FRONTIERS and formerly AMERICAN VOYAGER, not to be confused with Holiday Planners, Branson, Missouri.
INTELETRAVEL(terminated by IATAN, and a member of OSSN)
INTERNATIONAL WORLD VACATIONS
KE TRAVEL
JOIN CRUISE TO CASH
PLATINUM ONE DESTINATIONS/Net trav
PROTRAVEL NETWORK, not to be confused with ProTravel International
TRAVELBRIDGE
TRAVELENCIA
TRAVELONE (Beacon Travel)
TRAVELSTAR(JOYSTAR), just fried
TRAVELWIZE a/k/a CYBERWIZE
TRAVERUS (Supported by OSSN)
ULTIMATE CHOICE TRAVEL
WORLD VENTURES TRAVEL (Believes there is a sucker born every day and they are correct.) They are in the process of changing their name again.
YTB INTERNATIONAL (being sued by many) YOUR TRAVEL BIZ, YTBCARS, YTB TRAVEL NETWORK and REZconnect TECHNOLOGIES operate as separate companies under YTB International may not be affected by the terminations. For example, Vacation Central, under Rezconnect is not affected.
THE FOLLOWING SUPPLIERS, WE CALL THEM THE "GOOD GUYS," NO LONGER DO BUSINESS WITH YTB
IATAN
ROYAL CARIBBEAN/CELEBRITY
PERILLO TOURS
MARRIOTT HOTELS
FAREBUZZ
NCL
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I don't know how the rest of my travel agency owner peers are handling the salary cap imposed by President Obama when accepting taxpayer bailout funds.
I just don't like the government meddling into my financial affairs. So what, "They are giving us 5 billion to hire more travel agents?" We all will need to make adjustments and tighten our belts.
Here are a few things I am doing to handle this.
- Eliminating my penthouse suite with Crystal Cruises and applying for Travel Agent Reduced Rates with Carnival.
- Increasing my marketing dollars request by creating more false advertising invoices.
- Reducing my agent's commissions and pocketing the difference tax free.
- Turning in my lease on my 5 million dollar yacht and leasing one worth just 1 million.
- Telling my housekeeper she will need to work an extra 3 hours per day without pay.
- Cut my onboard credit allowances from my clients and pocket the difference, also tax free.
- Sell non-travel products on my travel agency website. What the hell! The MLMs do it.
- Either getting rid of at least one girlfriend or divorcing my high overhead wife.
- Change my four times a year gambling junkets to Monte Carlo to the local Indian casino.
- Do away with Christmas and birthday gifts for my grandchildren.
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Editor's Note. If we can't laugh a bit during troubled times, what have we got to look forward to?
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We are seeking out the real professional travel agents to be recognized for their achievements. We offer the opportunity to be awarded the Certified Travel Professional designation and to stand high in the industry.
You owe it to yourself and the travel industry to examine the qualifications and benefits to becoming a STARS member.
Link To The STARS |
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