By Michael Akana at Nov. 3. 2007.

      Last month, Royal Caribbean International® and it’s partner cruise lines–Celebrity Cruises® and Azamara CruisesSM announced they “have begun terminating our business relationships with certain travel-related companies that we have concluded are in the “card-mill” business (selling ordinary consumers access to benefits designed for actual travel agents). We have a fundamental concern with the business practices of these companies.”

      Almost everyone in the industry cried out that it’s about time.

      There are legitimate strategies for reducing the cost of travel. Travel during the off season.  Book early to take advantage of early booking discounts.  Book late to fill excess inventory.  Travel with groups to leverage buying power.  Your local travel agent can help with legitimate strategies for keeping the cost of travel affordable.

      There are also shady deals that are not so above board.  One type of scheme targets the buyer. A very low cost travel option is advertised. Once the buyer puts down a deposit, the terms of the “deal” seem to change. Soon the unsuspecting buyer realizes that they could have saved as much or more money by booking a package directly with the supplier or through a local travel agent.

      There is another scheme that affects the whole industry — the card mill.  The card mills sound a bit suspicious even at first glance. They promise free travel or discount for travel as a professional travel agent. They market the idea of FAMs, or “familiarization trips.” They fail to mention that FAM trip, while often offered to legitimate travel agents, require a lot of work, both in classroom settings and in whirlwind tours of facilities.

      I attended a seminar with GoldRush Getaways in San Jose in response to an offer of discount travel presented and the Half Moon Bay Pumpkin Festival.  The room was full of curious travelers who wanted to find out what the gimmick was. There was a pitch to buy in as a travel agent. Pay today and both household members can be travel agents for life.  What was strangely missing, as I pointed it out to the presenter, was almost no information on how to actually sell travel.  It was all about travel agent discounts and FAM trips.

      Royal Caribbean did not identify which travel agencies were on their list of card-mills. Travel industry news have identified Joystar and YTB as targets., Peter Stilphen of Coral Sands Travel has not been afraid to name names in his articles about multi level marketing and card mills.

      Stilphen and a number of other travel host agencies have created an organization named PATH (Professional Association of Travel Hosts) to help insure that travel agencies that operate with outside agents maintain professional standards. According to the PATH website, “PATH is a non-profit, all-encompassing, non-partisan corporation known as the Professional Association of Travel Hosts, Inc. PATH’s members are comprised of Host Agencies and Travel Suppliers only.” Dugan’s Travels, the host agency I work with is a member of Path.  Celebrity and Azamara Cruise lines are listed as supplier members.

      The California Attorney General’s office enacted legislation in January 2007 that addresses a few of the tactics used by card mills. Seller of Travel Statute California Business and Professions Code Section 17550-17550.59 addresses, among other consumer protections,  restrictions on discount programs.

      This time, it is the travel industry that is responding. Royal Caribbean’s letter to travel agencies said, “ ‘card mill’ companies offer normal consumers the ability to become a “travel agent” or “travel agency” or receive ‘travel agent credentials’ with little or no professional training or certification. These normal consumers are also often told they will receive discounted travel pricing and/or other benefits from travel suppliers, such as our brands, which are specifically intended for legitimate, professional travel agents.”

      Royal Caribbean’s letter went on to describe some of the negative effects of card mills:

      • “ They can lead to negative consumer experiences with these untrained agents, undermining the integrity and business reputations of accredited and certified travel agents.
      • They can devalue the knowledge, experience and expertise that legitimate, professional travel agents provide their clients every day.
      • They can substantially increase the costs of our operations by causing us to provide costly and valuable benefits to a set of persons or entities for which those benefits were not intended.
      • They can create an environment in which the traditional and full set of services we expect a travel agency to provide to consumers are, in fact, not provided, despite the payment of a full commissionin connection with a booking.
      • They can mislead normal consumers with unrealistic expectations of “travel-agent-only benefits,” when, in fact, they are not travel agents.”

      Card mills have been a plague upon the travel industry.  Whether the scheme is includes a multi-tier, pyramid system or simply require a high cost buy-on, watch out.  It’s a bad deal for the buyer, for the travel industry and ultimately for the consumer who end up paying for the higher costs of travel.  Travel agents applaud Royal Caribbean for it’s stand against card mills.

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