A SERIOUS WARNING TO TRAVEL AGENTS AND SUPPLIERS

As many of you know I receive lots of email from agents and non-agents concerning my blogs about the bad guys in this business, commonly referred to as MLMs and Card Mills. Many of the emails ask questions about their own host agency or to complain about commissions not being paid or just wanting to express an opinion.

Over the past 5 years, while trying to warn agents and suppliers about TravelStar/JoyStar, I received hundreds of emails about that company. Those emails and my own research caused me to raise red flags about that company.

Well, the red flags are really beginning to fly again. I have personally blogged about the MLMs and Card Mills for the past few years and again have received countless emails while at the same time watching and researching their evolvement. I've always known that the life of most MLMs were short but the life of an MLM in the travel business was really short, simply because the profit margins in the travel business were too small. None of the MLMs could ever survive without the MLM aspect in their other programs such as recruiting, selling websites and non-related travel products.

Today's economy has even shortened their life as a travel agency to a point where that "bubble" is about to burst. I believe YTB, the largest of the MLMs, will go down first this year. MLMs are already suffering severely and are looking at other alternatives ie name changing, merging with other MLMs and bringing on more non- travel products. There are strong complaints of commissions ever more slowly being paid.

When JoyStar collapsed it caused chaos among both the travel agents and suppliers. JoyStar only had a couple of thousand agents. The MLMs have thousands of affiliated agents called ITAs and RTAs. I doubt that the suppliers, especially the cruise lines, could handle the overwhelming inquiries from agents looking for their commissions and seeking the transfer of their existing bookings as they did with JoyStar.

I have two simple recommendations. Travel agents must do their homework and seek out a new, legitimate, financially stable Host Agency and not wait for their MLM or Card mill to go out of business. See my favorite list of these scoundrels elsewhere in this newsletter. Travel suppliers must look at what they are carrying on their books with the MLMs and Card Mills and establish fair policies relating to paying commissions and transferring bookings. They also need to reduce their exposure with these pseudo Host Agencies and terminate them asap. I'm sure they all have smart attorneys to help them with any alleged anti-trust complaints of violation from these folks.

I do hope you take my words seriously. It took four years to expose JoyStar. I'm giving you fair warning before it all hits the fan sometime this year. This is not a "sky is falling" warning but one based on my career experience as a business and financial executive, carefull research, and the ability to read between the lines.

Peter Stilphen, MCC
CEO
Coral Sands Travel
World Cruising Society

Comments

[matt]

those people that filed a lawsuit would not work there business and they are mad because they did not get a refund. What business gives you a refund after a certain amount of days. You have to work to become successful it will not come to you. Just because you have a website don't mean someone is going to find it you have to tell people and advertise your website. These people are crying because they expected more than they got. I do the marketing but I know it not a get rich scheme it takes time to get people to want a travel website. Most people don't see it anyway. So if this company been around for 8 years why are you worried about it anyway. We only have 100,000 people we don't even have 1 percent of the population what are you worried about. Travel is a 7 trillion dollar industry. Did you get mad at Donald Trump he sales websites? And he sales to people that have money so that is your rich clientele. So it is okay for Donald Trump to sale websites for $25,000 and not alright for YTB to sell $500 dollar websites.
What is wrong with that picture.

[matt]

What if travelocity got in the game and decide to sell websites then what are you going to do or Orbitz because they are tired of paying all that advertising money and they want to do the word of mouth method. YTB does no advertising they pay the reps to do it for them. I rather take the money then give it to the tv and newspaper networks. You know how much Expedia pay a week for advertising millions. So would you rather have the millions or not. Be honest people.

[matt]

this blog sucks too. Get a life.

[Bruce]

What if Matt got a real job abd sent some more money to coach so the boys in wood River could maybe afford to pay off some more bad debt for their directors? do it Matt! those guys making 250,000 a year can't afford to pay their bills. They NEED you to recruit - cause obviously your not selling enough travel.

[Peter Stilphen]

Matt is simply in denial. I predicted JoyStar's collapse and YTB will do the same this year. They are already saying similar things to their affiliates as JoyStar did. Simply said YTB does not belong in the travel business because it can't make money solely from travel commissions. PERIOD!

Peter Stilphen, MCC

[Man4Travel]

Hello Matt,
I have been on both sides of the fence. There are some legitimate host agencies out there. I to was involved with YTB. The concept is a great idea. To bad it was not totally legal in all states. You sited the Sales pitch that the speak of at the seminars. I had a chance to sit Down with jerome hughes. He is a big wif with ytd. When i asked if he was licensed in the state of California he could not answer the question. He then promptly put me on the phone with the founder who advised me that there license was pending. YTD Is a great company for a MLM. They report that they make Billions of dollars per year. They are correct as they do make that type of money. To bad that it is made by selling memberships and not travel. One should not earn a travel perk for purchasing a membership. You should earn travel perks from Selling travel. Just because you pay from $500 - $7000 for a membership does not give you the right to get a free ride on the backs of the hard working experienced agent. Carnival requires that you sell 5 cabins per year for a agent discount. They should have required one per month. It is time that the industry take back the control that the internet and the MLM's,card Mills and host agencies have taken away.

[caravanning blogs]

Hi,

Our opinion is that travel agents need to become like traditional retailers that look for space between their Net cost and market price, The whole idea is to get them away from being so dependent on commissions set by somebody else.

[Man4Travel]

Setting your prices can become a problem for alot of agencies. When one becomes sales driven you loose clientiele. If you quote one price than your client can call the next agency and start a bidding war. I think that customer service should be the winner. If you are rood tan you loose. And remember commission is based on sales. The more you sell the more you earn.