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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
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