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From the Window Seat

YTB and political correctness

October 22, 2007To contact Arnie Weissmann, send comments to aweissmann@travelweekly.com.

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.

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