Cash-strapped Travel Navigator changes course

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GARLAND, Texas -- Travel Navigator here became the latest outside agent network to rethink its direction after disappointing results.

The company is changing direction as it faces cash-flow problems and complaints by a number of outside agents, who say they have not been paid their commissions for several months.

According to the Texas Attorney General's Office, 32 people have filed complaints against Travel Navigator.

Julie Loyd, an outside agent for Travel Navigator and owner of Jules Travel, Denton, Texas, said she is owed $3,301 in commissions for 26 bookings, mostly from April to July.

Geoff Allen, who operates Star Travel Consultants in Spring, Texas, said he is owed $9,904 in back commissions.

And Michael Stump and Feng Quin Li, who operate China Jade Travel in Aurora, Colo., said they wrote Travel Navigator's chief executive officer, Ken Talbert, and its president, Phil Moss, seeking to regain $20,712 that they said they invested in the company's products and shares of stock.

Jeff Folsom, director of investor relations for Travel Navigator, told Travel Weekly that the company, which is incorporated as Internext Idea Inc., is facing a cash-flow crunch.

"At the present time, we're in a cash-flow situation," he said. "We expect new funding in the next two to four weeks, and a portion of this has been earmarked to pay out commissions."

The 3-year-old company compiled a national network of some 3,000 "associates" after promoting itself in the nation's top 25 markets, according to Folsom.

But it now plans to drop its dependence on its associates, who are called associate Travel Navigators, said Folsom.

Going forward, the company will concentrate on operations by a core of 200 full-time outside agents, called senior independent agents, Folsom said.

He claimed that the financial problems were due to the part-time status of most of its associates.

"People tend to lose focus in a part-time situation. Most people don't stick with it," he said.

In deciding to downsize itself, Travel Navigator follows Fort Lauderdale, Fla.-based Inteletravel, a large outside-agent network that curbed operations last spring and was reevaluating its future.

Until recently, outside-agent networks were being hailed by some travel marketers as the wave of the future.

Travel Navigator was formed in 1996 by buying out an existing agency with an annual volume of $750,000, Folsom disclosed.

By the fourth quarter of 1997, the agency did $1 million in revenues, he said, and recorded $7.5 million last year.

With 15 to 20 inside agents and a large Web site, at www.travnav.com, the agency is expected to top $16 million this year, he added.

Travel Navigator also is a travel provider for amazon.com and yahoo!travel.

Although the agency will continue to support its associates, Folsom said -- many of whom paid up to $495 to join -- the company will downplay that side of the business.

"We've decided to concentrate on the senior independent agents, many of whom come from existing agencies and have full agent skills," he said.

Unlike other outside-agent networks, Travel Navigator offers the senior independents 100% of earned commissions, charging a service fee of $5 per transaction or $125 per month, whichever is greater.

The company lists a cost of $995 for an Internet tutorial to join the senior independent group.

In addition, Folsom said the company has plans to set up its own travel package program, utilizing its senior independent network.

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