Just Picture It Now: Royal Caribbean Terminates "Card Mills"

On Tuesday I posted about some of the YTB upgrades from last weekends Funshine Trade Show in Orlando. In this post I commented that as a result of the tremendous group volume YTB is generating for Royal Caribbean Cruises, our own YTB Travel Network staff will begin processing group reservations for Royal Caribbean. The Home Office staff will be using the same systems as the Royal Caribbean group desk, but will be able to give RTAs more personalized service.

Imagine my surprise today when I found out through Rod Cook's site MLM Watchdog that The Association of Retail Travel Agents (ARTA) have been pushing major travel vendors like Royal Caribbean and state legislatures to cut off travel agent cards for MLM Companies. Rod is Pro MLM and while I respect what he's done for Network Marketing industry as a whole, he's been slightly off mark when it comes to Travel MLM's. Rod, as always was nice enough to post a link to the finding which I have to admit, I was VERY interested in.

According to the Travel Daily News Article The Association of Retail Travel Agents (ARTA)applauded the announcement by Royal Caribbean International (RCI) that it will terminate relationships with multi-level marketers (MLMs) which provide travel agency credentials and identity cards to consumers for the purpose of becoming would-be "travel agents." Barry Richcreek, ARTA Chairman was also quoted as saying in the report ""This announcement by the RCI family of cruise lines is welcome news from a respected supplier to curtail the growth of the MLM/Card Mill business, a scheme which denigrates the stature and role of the legitimate travel retailer."

Two words come to mind: "Good Grief"

I wonder if Barry would welcome the news that YTB International, Inc. who markets booking engines and Travel Agency opportunities through MLM just strengthened their relationship with Royal Caribbean the weekend before in Orlando Florida? (Hint: Probably not) What the ARTA, led by Mr. Richcreek has failed to let go of are the days when a "legitimate travel retailer" was actually needed to book a airline ticket, hotel room, car rental, or Royal Caribbean cruise. Based on Travel Weekly's published numbers in their 2007 Power List over $40 Billion dollars were spent via the internet with on-line travel agencies. Out of the Top 10 Travel Agencies on this list, 4 were not a brick and mortar travel agency, but instead, conducted business on-line. (You may have heard of them, Expedia, Travelocity, Orbitz, and Priceline?)

Now that technology has made it possible to give you, me, or anyone the opportunity to sell these same services, the ARTA is up in arm's with claims that the only reason any of us would want to join such a company would be "to procure questionable travel agency credentials and attempt to portray themselves as legitimate travel sellers" simply to get the discount they have been enjoying for decades.

In the years I have been involved with YTB, I can appreciate to a certain extent what the ARTA is trying to accomplish in regards to what are known in this industry as "Card Mills". Knowing some of the Travel MLM companies that have come and gone over the years, and even a few that are currently starting to take shape in our industry, there are certain Travel MLM's in our industry who promote the "Agent Discounts" and "FAM" trips without producing the retail sales back to vendors like Royal Caribbean. A "FAM" in our industry is short for "Familiarization" in which vendors invite Travel Agents to their property at a reduced rate in order to "familiarize" ourselves with their property. (You can't sell what you don't know.) In return for this discounted rate, we as travel agents are better equipped both in knowledge and excitement to promote their property to full paying customers.

What's been happening to vendors like Royal Caribbean is they offer these discounted rates to certain MLM companies, but are not seeing any return on this investment by these same companies in regards to full paying customers. Furthermore, many of these MLM's promote their Agency Cards as a "right of passage" to receive these discounts simply by flashing their card. It's not a right, it's a privilege and perk given to those of us who are professional and courteous. Even then, there is no guarantee.

Last year when Freedom of the Seas was launched, I had to get on this ship. The problem was, the ship was booked solid through the rest of this year. Royal Caribbean was not about to throw a family overboard just to put our family in at half price. As a professional, I also needed to get on this new ship so I could speak intelligently to my clients about what to expect and what they could do. (And there was a lot to do on this mega ship believe me!) So I booked this trip just like any other customer and had a blast! (See for yourself!)

With all this being said, you might be wondering why Royal Caribbean would not only give YTB a pass, but actually strengthen their relationship with YTB while at the same time supporting the ARTA?

Good question, and I'm glad you asked!

Not all Travel MLM's are created equal. There are very viable, profitable, and respectable Travel Agencies who simply use the Network Marketing model to promote and build their business. How can YTB claim that they are a Travel Agency first and foremost? Anyone looking at any Travel Agency should first verify both IATAN/ARC numbers and also check to see what the gross yearly travel sales are. (Unfortunately, no other Travel MLM can produce gross sales numbers.)

What's even more revealing concerning Royal Caribbean specifically as why they would not terminate a partnership with YTB is the actual business we do with them. Fully 30% of YTB's leisure business are cruises and large part of that business are done in groups. I just checked our groups cruise page and out of the several hundred groups with 30 or more cabins being booked at this time I went down half the list and found the first 50 with Royal Caribbean.

Please note: These are clickable links, but some may expire due to groups being closed and taken beyond November of 2007.

1. HBCU Alumni & Friends Fantastic Voyage
2. Superbowl Party Cruise
3. Friends and Family
4. Re-Union of Friends
5. 25th Garrison Anniversary Cruise
6. 2nd Annual Contours Express Getaway
7. 40 - Anniversary Cruise
8. A Family and Friends Getaway
9. A Siesta Cruise with Tara
10. ACTC Cruise
11. Adams/Karlavage
12. Adorando en Alta Mar con, Hnas Meléndez
13. Amie Jo & Esperanza's Fiesta
14. B and B's First Cruise
15. Bermuda Family Travel
16. BJ's 2008 Fun Fest Cruise
17. Briscoe, Manly, Atcherson, Gross Family Reunion
18. Candy's Fun Group
19. Chambers Family and Friends Cruise
20. Chanel & Drew Wedding Cruise
21. Cindy's Group
22. Circle of Friends
23. Claude and Yvonne Anniversary Cruise
24. Clayton Valley 78
25. Cool and Fun
26. Crawford Wedding Cruise
27. Cupid's Cruise
28. Dayton's Finest Travel Club Hawaii Cruise
29. Derby 50th Anniversary Celebration (Celebrity)
30. Desert Hills Presbyterian Church (Celebrity)
31. Dockery Family & Friends
32. Donald & Sheryl Stanley's Super Bowl Cruise
33. Doris Carter 08 Bahamas Cruise
34. Dumas Family Reunion
35. Family and Friends
36. Family Unity
37. Family Unity II
38. Fauntleroy Travel & Friends
39. Friends & Family of Mercedes
40. Fun In The Sun
41. George & Roslyn Group
42. Go Mexican With the Sanders
43. Harrison/Greenhill to Suns Sail
44. Haworth Birthday Group (Celebrity)
45. Hemet Alaska Cruise
46. Hope On The Move!
47. House of Prayer 2nd Annual Men & Womens Conference
48. Hubbard Anniversary
49. ICC New Year's Kickoff Party
50. It's My Party

With a list like this, do you really think Royal Caribbean would want to terminate our relationship? I can promise you that Royal Caribbean is looking at the bottom line and they know very well what all these groups of 30 or more cabins will do for their business.

In closing, based on what we have just learned about Royal Caribbean's relationship with YTB and the group bookings department and all the groups we currently have, I would have to agree with the ARTA Chairman, although he doesn't realize he's talking about YTB when he was quoted "RCI has taken a major step today to add teeth to its support for the legitimate travel retailer"

They most certainly have.

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Doug & Ronda Bauknight
AKA: TravelPro
Travel Agent / Networker
Phone: 678.458.5812

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Labels: Agent Discount, ARTA, Association of Retail Travel Agents, Card Mill, FAM's, Freedom of The Seas, Group Cruise, MLM Watchdog, Rod Cook, Royal Caribbean

Posted by TravelPro on Thursday, October 11, 2007 at 10:48 PM | Permalink

Hi there, thanks for the post! I just joined YTB last week, and reading your post added to the company's credibility for me. I also just started a blog of my own and was wondering if your blog has helped you market YTB?

Posted by Anonymous | Friday, October 12, 2007

Love your site. I am new to YTB also and this news (RCI)was certainly disconcerting. From your post, I am starting to see a new dynamic unfolding motivating ATR and its pressure on travel vendors. I think it is fear and despiration over a change in the way business is being done. Would RCI really walk on that much business??

http://homebasedtravelagentsblog.typepad.com/my_weblog/2007/09/solutions-to-co.html?cid=86279324#comment-86279324

Doug,

I just added comments to Peter Stilphen's blog. He is one of the guys behind the issues with RCCL. I just wanted to show it to you.

John

Posted by www.residuallifestyle.com | Saturday, October 13, 2007

Love the info. This is fear indeed. I've seen it before in the Mortgage and Real Estate business. Keep up the great info line and thanks for being smarter than them.....

Posted by Larene | Saturday, October 13, 2007