It
was a Friday afternoon, and John Frenaye had logged onto one his
favorite travel agent chat groups on the Internet. Many topics were
being discussed, but one in particular was riling up the agents in
the group.
The topic had to do
with multilevel marketing firms, also known as MLMs. The businesses
purport to sell travel agent credentials to consumers, who then use
them for discounted travel benefits.
"Everyone was
complaining," said Frenaye, owner of online agency TravelsWithFred.com. "Agencies are being impacted by a
lot of the MLMs out there."
One agent in the
chat group commented that a travel MLM had lured several of his
clients away.
Agents were
especially annoyed that many suppliers accept sales from
MLMs.
"Someone said, 'We
need to get the suppliers to listen,' " Frenaye said.
That gave Frenaye,
who also writes a travel column for the MSNBC cable television
network, an idea.
He drafted a
petition designed to call suppliers' attention to the impact travel
MLMs are having on agencies. By late afternoon, agents on the
Internet were circulating copies, and within a week more than 570
agents had signed it.
Royal Caribbean
Cruises brought even more attention to the issue last week when it
announced that its three brands will no longer do business with
what it called "card mills" (see also: "Royal Caribbean throws 3 'card mills'
overboard").
Royal Caribbean's
announcement was widely cheered by agency groups and the agency
community at large.
"Suppliers, I
think, don't have any idea," Frenaye said. "They are looking for
income from [travel MLMs] and revenue. If that market provides
that, and obviously it does, you can't [blame them]."
However, Frenaye
said, sales by travel MLMs come at a higher cost to travel
suppliers than do comparable sales by professional travel
agents.
"There's one outfit
that if you go to the help page [on their Web site] it says, 'If
you are having problems with any travel that you've booked with us,
click here.' You click there and it leads to the toll-free numbers
of the suppliers," Frenaye said. "I said [to one supplier], 'You
are paying these people 16% [commission] to give out your
[toll-free] number? For 16%, shouldn't they handle the
problem?"
At the same time,
Frenaye said, it appears that some suppliers hold professional
agents to different standards than the individuals selling through
travel MLMs.
In the petition,
Frenaye wrote: "As a Carlson Wagonlit Travel agency, I need to
produce so many berths per year to achieve the next commission
level and marketing dollars. Why is this not enforced on [travel
MLMs]? Why are the franchises and consortia not screaming about
this?"
In the petition,
Frenaye states: "Because I buy TurboTax does not make me an
accountant. If I sell a watch on eBay, I am not a jeweler. Why does
our industry allow someone with no experience to call themselves a
travel agent?"
Frenaye argued that
unlike professional agents, MLM travel sellers "provide no service
to the customer. They provide no advocacy to the
customer."
Frenaye said that
he did not expect MLMs to disappear and did not begrudge suppliers
that continue to work with them.
"They have to make
the decision that's right for their own business," he said. "I
don't think they need to get rid of them. They just need to hold
them to a different level" than professional agents.
Meanwhile, the
petition continues to circulate among agents and
suppliers.
While Frenaye hopes
to gather at least 1,000 signatures, he still isn't sure what he
will do next with it.
But at the very
least, Frenaye said, he hopes that the petition will alert
suppliers to how travel MLMs affect the professional agencies that
sell their products.
"I thought that
really needed to be presented to them in some way," he said. "If nothing more than poking a hornet's nest
to say, 'This is really costing you.'"
To
contact reporter Michael Milligan, send e-mail to [email protected].