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Open Letter on Card Mills, MLMs

March 10, 2009 By: Paul Henderson


As president and CEO of Pro Travel Network, I have finally had enough of the badgering and unfair, biased and unresearched, rantings about so-called "Card Mills" and/or "MLMs".  So I have decided to add my voice for a real push for real guidelines across the travel agency landscape, so that the term "Card Mill" actually has a meaning, before any more companies who have real legitimate businesses, that don't happen to be the old status quo, are targeted as bad for the industry.

Case and Point:  Joystar was neither a Card Mill, nor an MLM.  They did not issue any ID cards, nor did they have an MLM side.  Joystar went down because it had too much debt, and initially recruited based on paying 100 percent commission, which of course brings $0 revenue to the company, and it ran out of time and money.

Yet there are tens of thousands of large and small agencies across the U.S. who have little or no money. Many mom and pop agencies and home-based agencies across the land operate on debt, and have little-to-no operating capital. A small fraction are publicly traded, but the rest are private and we have no idea how many thousands are close to closing their doors, bills unpaid. With only a few states having any rules or guidelines whatsoever, Joystar simply shined a light on a much bigger issue and problem. Yet some have us chasing "straw men" and "ghosts" (so-called MLMs and Card Mills), using their own definition. There are real issues confronting the industry, and they are not who gives ID cards or how a company chooses to advertise for customers or agents.

Issue: What is a legitimate Travel Agent or Agency?

There is absolutely no legal precedent or guideline as to what a bona-fide travel agent is or isn't.  How much travel does a person have to book to be called a travel agent? How much training, and who's training is required? With that currently completely unknown, what gives any person the right to judge another's legitimacy when there is no basis for the judgment? IATA says $5,000,  CLIA says 25 cabins sold and "their" training,  ARTA says "ongoing income",  I say $10,000,  and you say $3,000.  Another may say $200.  All are right, or all are wrong!

In the regulated real estate industry, how many homes must you sell to be called a real estate agent? Zero...pass required tests and it's up to your employer/broker.

In the state-regulated auto sales industry, how many cars must you sell to be called a car salesman? Zero... pass background and it is up to your employer.

Who gives RCCL, NCL, Marriott, Perillo, IATA, etc. the right to cancel an agency? They do!  They are the masters of their own companies and have the right to terminate any agency, and should, anytime they believe that agency is at risk or violates their policies. Perillo announced that its termination of YTB was because agents were taking all the discounted trips.  I understand that, you understand that. It is specific and makes sense how that could hurt it's business. Isn't that the right of a vendor? But if YTB accepts this and changes its policies for all to see, then isn't it between them and the supplier to decide their ongoing relationship?

Why are we then hit daily by blogs, webinars and front page news on how we need to all come together to eliminate all MLMs and all Card Mills? How about we concentrate on fixing the rules of the game to ensure a fair playing field for all? How about a signature campaign petition for something really important like a universal guideline as to exactly what are the qualifications of an agent?

Several years ago, we made the decision, after conversation with Marriott and ASTA, that we would eliminate any ability for any of our agents to take fams unless they earned the IATAN card.  For CLIA card issuance, we implemented stronger internal polices than CLIA's own policies (at that time). We did not issue any letters of introduction... nothing. Interestingly enough, we have found IATAN earners are simply more serious about their businesses, rather than taking fams. But this was an evolution.  By the way, we applaud the new CLIA standards.

But I still say we have no right to deny a company from issuing its own ID cards in an industry where no uniform guidelines exist. IATAN card, CLIA Card, ARTA card, ACTA card, so why can't "Host Agency X" issue a card of its own, to its own agents, with its own guidelines? What makes these entities the sole purveyors of travel ID credentials? And each of them has different parameters for issuance. Shouldn't the acceptance of a particular credential be left to the accepting supplier, absent any uniform guideline? And if abuse is found that supplier can terminate said agency, as Perillo did.  But maybe that abuse was not with Carnival. Who are we to pressure other suppliers? Let's worry about our own businesses.

It is grossly unfair to pass judgment on companies for being a "card mill" when the term itself is meaningless, and formed and reformed by the opinions of those who use it to broadly target agencies whose models they just don't like. Now please understand, I am philosophically against any agency who issues ID cards to undeserving agents, but we need a uniform guideline so that companies cannot be targeted because they do not meet yours or my definition of "undeserving."

Neither are all MLMs bad. What a ridiculous notion. Who says they are? Those who have never had success in it or see it as a threat to their models? Or those who use these bashing techniques as promo for their previously unrecognized companies. Travel is a $7 trillion industry, so I hardly think competition is the issue. MLM has just become another "buzz word" created to label those we don't like. Is there anyone today that sees Mary Kay as a bad business model? Warren Buffet owns Pampered Chef. Is there anyone out there who hasn't eaten from TupperwareAvon is a household name. So why can so many traditional companies such as American Express, etc., sell a home-based agent product, with training and accounting tools, support, etc., but if an MLM does it, it is no longer a valid product? Come on!

So how can we judge any travel related MLM, as good or bad?  If they book lots of travel... they must have cheated. Or we take their number of agents and divide into travel revenue to show that each agent only booked or earned this or that, as if that means anything. I was taught as a child that less than 20 percent do over 80 percent of the work. If an MLM agent takes an unwarranted fam.... oh my God, the end is near. So we spend hours picking apart another's business, instead of addressing the real issues of concern, that perhaps a bad company has exploited. Fix the issues, the exploitation goes away.

Finally, my reason for addressing this is not to promote nor defend MLMs or Card Mills. Pro Travel Network does not issue any ID cards, although Pro Travel Network does use the MLM model to attract and recruit new agents, but uses a very traditional model for training, booking and accounting. My main goal is to hopefully bring some rational thinking to an issue that has gotten far more press than deserved, yet the real issue(s) is being ignored.

Stop the forums, webinars, and witch hunts. Most importantly, stop wasting my inbox with this nonsense. Stop giving place to once nobodies who have now become somebodies carrying the Card Mill banner. How about a forum on industry regulation and defining what an agent is or isn't? If a person has not satisfied certain requirements, then they are not called a travel agent. Maybe we need a system that rewards in degrees of agent proficiency or sales. Once we decide what qualifies a person to carry a credential and be called an agent, the entire "Card Mill" era will end.

What we don't need, is every four-five letter acronymed company or association putting out a new ID card. That makes the problem worse and then, by definition, disallows our ability to say who can or who can't issue ID cards, or even question the qualifications they choose for their cards.

I would love to sit in on the panels or boards to help defend, not MLM nor card mills, but fairness.  Let's face it, most travel agents don't book $1 million per year. Since only a few even hold the IATAN card, that means most book far less than $50,000 per yearr. Many thousands are part-time. Does that make them less qualified to make a booking? So this must be researched and carefully thought out, debated and discussed. I do believe all bad agencies and hosts should be terminated, but we must first, as an industry, come together to create what guidelines allow for that. Otherwise, we must stop pushing rules that do not exist!

The bottom line is this: I have to believe that most of the people in this industry love it. None of us want it hurt. All of us want to be successful. I would like to believe that none of us are looking to make it at someone else's expense. With that said, everyone deserves the right to "pursue" success. Being a business owner is one of the hardest things that I have ever done, and that is true whether you have a multi-million dollar operation or are a home-based agent. Success comes at a price. Mistakes are made. But I submit that travel is so huge.... so huge that we can all get along. So rather than broadly and blindly accuse or lash out at everyone who meets a certain profile, which history has proved doesn't work and is illegal, let's work to create guidelines that are fair for all.  Guidelines that if followed, all of us can "pursue" our goals of succes.


What do you think of this $type?
 

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