I once sat down to dinner on a
cruise fam with a former ASTA director who owned multiple travel
agencies. She introduced me to the woman sitting on her left as her
hairdresser. I thought it somewhat extravagant for her to be
traveling with a personal stylist, but the explanation came soon
enough.
"You would not
believe how much referral business I get from her," the agency
owner said. "She has a very captive audience. All she has to do is
talk about the trips I take her on as she styles people's hair. She
brings me an enormous amount of referral business."
I asked if she paid
her hairdresser a commission.
"You bet I do," she
replied.
It would not surprise
me if the agency owner one day asked her hairdresser to encourage
her fellow stylists to also begin making referrals.
Naturally, the agency
would pay the other stylists a commission, as well, and perhaps
give a little to the original hairdresser on bookings that resulted
from the employees she recruited.
Would anyone in the
travel community care? Would the cruise lines? Would an agency down
the block?
Doubtful.
The hairdresser is
invisible to the cruise lines, and the agent down the block might
well have a similar arrangement with his barber.
The concept of
compensating people who refer business has been standard operating
procedure in the retail travel business for a long time. They're
what used to be called outside sales agents, the ones who can
organize a group of affiliated travelers -- a church, a Kiwanis
Club, a school or people who are having a bad hair day.
The question is: Do
they differ all that much from YTB's "referring agents" in any way
other than scale? Or, for that matter, do they differ much from the
Magic Johnson Travel Group, which relies on affiliations in urban
settings and whose investors include Royal Caribbean, the company
that recently booted YTB out of its commission club for being a
"card mill"?
The Web sites of both
the Magic Johnson Travel Group and YTB mention travel perks as part
of the pitch ("opportunities to travel at discounted rates" is part
of "The Magic Formula").
Both also talk about
training. Johnson's organization has the International Cruise
Academy, and YTB has weekly conference calls and training at its
conferences.
These three
comparison points -- affiliation selling, training and travel perks
-- might well exhaust the similarities between these two
organizations, but they did strike me as variations on the theme of
exploiting affiliations and referrals.
While I'm not ready
to endorse YTB as the best entry point into the travel industry, it
is a relatively easy entry point, and the industry is in crucial
need of fresh blood at the agent level.
Suppliers who
attended the last YTB meeting gushed about many aspects of it,
describing 8,000 attendees who were so involved and interested in
training that the fire marshal had to kick people out of
overflowing rooms.
It was also noted by
suppliers that the agents paid their own way there and that there
was little in the way of sponsorship for meals or other aspects of
the conference.
Which suppliers said
this? Here's the funny, not-so-funny part: They were not willing to
speak on the record. They are afraid of backlash from agents if
they appear to be praising YTB. It is politically incorrect to
defend YTB.
If I were either a
potential travel agent or a consumer looking for discounts, I
wouldn't find the math of YTB's proposition compelling. Its
presentation promises "several hundred to a few thousand" dollars a
year in commissions after asking for an up-front investment of $450
plus $50 a month to be a referring agent.
Do I want to invest
more than $1,000 to possibly earn several hundred? As a consumer,
do I want to pay that much for travel discounts that I "may"
earn?
Yet many thousands
have signed up, and 8,000 were willing to further invest in
attending a conference and packing training sessions. It leads me
to conclude that many YTB agents are looking seriously at selling
travel, and that's very welcome news to an industry in need of new
blood.