OPINION
I politely decline
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For the most part, they seem much like
us. They struggle, they complain and they
pay tribute to the way the industry once
was, much like any group on the way to retirement after a lifetime of travels and little
compensation.
For many travel agents involved in the
industry’s social life, it becomes routine: familiar faces all trying desperately to put the
best face on what has become an extremely
challenging profession.
But while this is going on, there is another reality. The best of the best in this
profession get privileged invitations that
often involve exotic travel and face-to-face
time with the suppliers’ very top executives; this access can translate to clout. Their
opinions are sought out at these gatherings
of the top-producing agency firms, and in
exchange for being treated like travel royalty, they offer cooperation for commission
overrides and very special treatment.
I would argue that all too often they sell
out. Because the fact is that top-producer
awards do not recognize agents who create
business; they honor agents solely on their
aggregate business.
I’ve attended more than a few of these
events, and I’ve sold out as much as anyone. I did boycott one top-producer event,
but I was told that I was the only agent who
had even raised the issue of business creationism.
I want to tell you how I came to climb up
on this particular soapbox, and why I hope
I might influence one or two other high-producing agency owners to consider the
impact they could have on our industry if
they “just say no” to their next top-producer
event invitation.
A few years ago, we were attending one of
these events sponsored by a major
cruise line. On the
first night, just as we
were being seated
for dinner, a very nice couple asked if they
could join us.
The dinner was pleasant, but my wife and
I seemed to be doing most of the talking as
we were peppered with questions about our
somewhat unorthodox business model. I
knew that the other couple owned one of
the line’s top-producing agencies, and I fi-
nally looked at them and said, “So, enough
about us; tell us a bit about your agency.”
The woman smiled and responded, “Oh,
I don’t know anything about the travel busi-
ness. I’m a rebater. My husband is a com-
puter expert, and we just take our three
favorite cruise lines and we rebate a good
share of our commission on our website.
Travel people are involved in rounds of social gatherings and supplier-provided events designed to make us product- proficient. So we meet other agents and we socialize with them at a dazzling array of expos, seminars, cocktail parties, fam trips and breakfasts.
REALITY CHECK
extensive “marketing override” and then
plow it back to the agency’s bottom line.
This tactic enables the upper-echelon
cruise lines to claim that megadiscounters
are receiving just about the same commission as any agent while providing marketing support to them through the
back door.
Since some of the mega-rebaters who work with cruise
lines earn cumulative commission and marketing fees in the
23% range, their ability to adjust pricing downward, when
combined with factoring in tour
conductor fees, makes for a substantial discount.
It is interesting to observe that Carnival,
Royal Caribbean and Norwegian Cruise
Line have been more aggressive about policing pricing of their product than many of
the upper-crust lines.
So is rebating some sort of wonderful
new business model?
No. It is, I believe, a company that is saying to a supplier that it does not need its
commission and that it will simply return
much of it to the consumer.
It is a company that undermines the value of the products it sells, in effect saying
that the product is worth less than the value
set by the company itself and honored by
the ethical agency sales force.
But most importantly, the rebating company is based on enticing clients away from
legitimate agencies who have real business
models.
I believe that to be a “business model”
you have to actually create business. Rebaters simply attempt to take existing business
and reallocate it.
Nothing I write is likely to have any impact on rebating. Your angry letters will not
stop the practice.
But just suppose that the leaders of our
industry, the owners of the top-producing
ethical travel agencies and consortia, turned
down their next invitation to a top-producers event. Just imagine what would happen
if these industry leaders took the position
that it is not an honor at all to be recognized in the same way as those whose approach to business approaches that of a rug
merchant in the Grand Bazaar.
Imagine what would happen if collective-
ly we all said, “You do me no honor when
you also honor those who demean the value
of your product and the notion that we can
all compete on the basis of services ren-
dered.”
What would happen if the most respect-
ed among us just said no?
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We get millions of visitors, and
we do great business, but I ac-
tually don’t know much about
travel.”
This didn’t shock me. I had, af-
ter all, worked for a major cruise
line for more than a decade. But
I was surprised that this woman
was so openly admitting what
she does for a living.
I’ve recounted this story previously
because it led me to take count of the attendees at the top-producer events on my
schedule. And, not surprisingly, many of
them are top-producing rebaters.
Without fail, the room is filled with
agents I admire, true leaders of the industry. But they all have one thing in common:
They accept their award status and their
honors without ever questioning why so
many others in the room are outlaws who
choose to be parasites.
I do not know of a single instance of a
top-producing agency owner telling a supplier that he or she will not be attending
a recognition event as long as the nation’s
(and neighboring nations’) largest rebaters
are included.
When I declined to attend one of these
events, a top cruise line executive told me
I was a fossil who did not understand that
“there are a lot of business models out there
that are different from yours. Not everyone
sells retail.”
Last year, I attended a cruise line event
where I was seated with the top sales execu-
tive of one of the world’s best cruise lines. It
was all love and kisses except for one gen-
tleman who sat silently through the dinner.
He was the owner of one of America’s largest online rebate agencies, and it appeared
that he had no interest in or knowledge of the industry issues being
discussed. His was,
as it was again explained to me, “a differ-
ent business model, Richard. They sell on
volume discounting just like other Internet
megasellers.”
When I do seminars I am often asked
how the giant rebaters actually do it. How
do they get such great pricing?
They do two things you and I don’t do.
They sell so much by giving back their
commission to the buyer that they can be
assured of earning a certain number of free
tour conductors. So they factor that into
the discount.
The second thing that they do, with the
tacit agreement of most of the upscale
cruise lines, is take large portions of their
Richard Turen
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Contributing editor Richard Turen owns
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JUNE 27, 2011
