TopDawg Travel

Posts Tagged ‘cheap travel’

A couple of years ago, some “host” agencies decided to try the multi-level marketing approach.  The down side to this was their marketing ploys.  They suggested that if you sign up as an agent with them you would get cheap or free travel as long as you paid them a sign up fee, a monthly fee and an annual renewal fee.  There might or might not be other fees as well.  You are encouraged to “sell” your family, friends, acquaintances and business associates on the idea of signing up also so they could travel on the cheap or for free.  For each individual you brought into the host, you would receive a “commission”.  

There are three levels of status in such a company:  the “director level”, the “rep level” and the “referring agent level”.  As I understand it, the “rep” makes some money by selling the “referring agent” a website which is provided by the company. 

For the “Referring Agent” to have access to this personal website, they must pay an upfront fee, a monthly fee and an annual renewal fee.  This website is then used to attract people who want to book a vacation or a trip of some sort.  There is a booking engine behind it and the referring agent makes a commission for any trip setup through their website.  They go out and give people their business card and website URL and make money.  Sounds easy enough.  On a website I found,  the majority of the “referring agents” were averaging sub $100 per month in commissions…..mmmmmmm…….well, they are covering their monthly costs to the company for the website.  And they were promised “cheap” or “free” travel as part of the “pitch” to buy in.  Whether they get “free or cheap” travel remains an unanswered question in my mind.

Maybe the better level is to be a “rep”.  Your whole job is to find people who have enough money to “buy” the website and pay the company monthly fees.  And the more dups,, ah, excuse me, agents you bring in, the more money you make.  I read on that website that said “some” reps make as much as $1000 per month.  Still an, mmmmmmmm……

Gee, money for free, travel for free…sounds good, huh?  Well, like someone once said, there is no free lunch.  These “Host” MLMs charge upwards of $1000 for the upfront privilege of becoming one of their agents.  Then your monthly fee can be anywhere from $30 to$100 per month.  The renewal fee is usually in the mid hundreds.  And all your friends, relatives, acquaintances and business associates are also paying that kind of money to the “Host”.  The commission split (should you actually find a vacationing client for travel arrangements) ranges from 40%-60% of the commission paid by the supplier.  Since most suppliers pay only 10% commission on the base rate (not including taxes and fees) of the travel supplied, a $2000 vacation will earn $200 in commissions.  So as the referring agent you can earn $80 to $120 dollars.  Of course, the referred client has to decide that the travel offered is the best deal for them and actually purhase the travel.  On the other hand they can be lured into spending the money on joining the “Host” and getting the so-called cheap or free travel.

I was not able to get the comp plan to open, nor find out what the “director” level does or exactly what they get paid for.  I did manage to see that there were 94 directors in a “power team” position who received $30k plus in the month shown.  Now, I would not mind being in that group!

And who knows if all “MLM” host/travel agencies work like this description.  I have not researched all of them.  I am not even sure if I know the names of all of the MLM type of host agencies that have started up.  I just don’t think I want to give a lot of money to this host just to have them give me a website and allow me to operate under their umbrella.  The thing is, there are some host agencies that do not look any different than these MLM ones. 

Take for instance the one I initially signed up with.  It does not look a lot different than the one I have described above, other than it is local, a lot smaller, not as much “splash”, and have not taken their company “public” and have stock for sale.  I could take a wild guess here and think that the little guys are “wanna-be’s”.  They see the big ones making a lot of money for themselves and hope to cash in on the action.

I do not have answers to the questions running through my head.  I sense that the issue is a real hot potato and may cause hard feelings to emerge between friends and family members who enter this fray.  In the industry it is certainly causing friction.  Factions for all sides are lining up and the hissing match has only just begun.  Every day, every week brings new sides being taken, issues coming out. 

As I see it, when the “public” starts reading about it on page three of the business section of the Sunday edition of their hometown newspaper, we are going to see “comsumer protection” taking a stand and then the “government” is going to step in to protect the innocents.  From there it will all go downhill.  But this is just my opinion.

I read an article today in one of my trade magazines about how people use the Internet to research and book travel.  Since I am a travel consultant and arrange peoples’ travels for them, I am interested in the stats that these kinds of surveys come up with.  This survey I was reading about was done byThe Conference Board (www.conference-board.org) and global marketing firm, TNS.

This study followed 10,000 households across the country, tracking Internet usage to make travel arrangements.  More women (21%) than men (19%) use travel sites for research.  Ease of use and availability are the reasons cited for booking travel online.  48% of those booking air online and 42% of those booking cars online said they were extremely satisfied.  More men(34%) than women (33%) researched and then booked travel online.  But only 30% of consumers expressed a high level of satisfaction with the sites used and 55% said they were somewhat satisfied.20% of the consumers said they had used the Internet more this year than last year to research travel arrangements but only 18 % have increased their online bookings.  Again ease of use and availability were cited as reasons, but also cited were past experience and promotions targeted at the consumer.  Nearly 25% said they used the Internet less this year than last year for travel arrangements.

In nearly 2 to 1 ratio, consumers will use the Internet to research travel over booking travel via the Internet.  Lodging has the most research online activity while airline tickets are the most booked online. 29% of women versus 27% of men intend to research lodging on line, while 27% of the women versus 25 % of the men intend to research air rates and availability online.  17% of both men and women plan to book their air online and 16% intend to book lodging online.  Close to 30% of those questioned do not intend to do any research or booking of travel online in the next 3 months.  Whether this means they just don’t intend to plan to travel nor to actually travel was not covered in the article I read.

Now what I derived from all this is, there are a lot of people out there who are finally tired of bogus ads and promos telling them they will get something fabulous for next to nothing(not true), or they have been burnt by making bad choices due to a lack of knowledge(or ignorance), or there are just more and better things to do on the Internet than spend half a lifetime trying to figure out the cheapest possible price for one of the most important events of their 52 week working life (the vacation).

In a nutshell it has never been more important than it is today to use a travel agent.  And then to refer your friends, family, acquaintances and clients to that travel agent.  These percentages tell the story.  There are a lot of people out there not using the Internet for researching or booking travel.  A great majority of those who do are less than satisfied, not just with their Internet experience, but also with their travel experience after booking it through the Internet. 

 A lot of travel agents are like me - self-employed.  When I tell people I am a travel agent, they are surprised that the job is still viable.  They think travel agents were a dying breed!  So I read these articles about the surveys and I think:   I may just have the best job in the world after all!