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Travel Agent Resources

How to Steer Clear of Travel MLMs

By Courtney Eisen

January 9, 2024

Regrettably, the travel agency landscape is riddled with host agencies that operate more like Multi-Level Marketing (MLM) schemes than genuine hosts. We've heard tales of agents who have shelled out thousands for training, paid recurring fees, and then been pressured to recruit new agents for the host. These types of agencies not only drain their agents' resources but also fail to deliver effective training, leaving their agents lost and frustrated. Here are some strategies to help you sidestep MLM Travel Agencies.

1. Follow the Money Trail

Some agencies levy charges for training and impose recurring monthly or quarterly fees. Others offer "free" training but still charge fees. While there are expenses associated with each agent in a host agency, such as errors and omissions insurance and licensing, often, these host agencies turn a profit on their agents before they make a sale. If you're considering a host agency with training fees and/or membership fees, it's worth pondering whether they might be more driven to recruit new agents than to train their existing ones.

At LuxRally Travel, we don't charge for training, we have no membership fees, and we absorb your errors and omissions insurance and licensing costs. In fact, we invest in our agents until they start making sales, which means we are highly motivated to nurture the sales skills of our agents.

If you're considering a host agency that profits before you do, stay vigilant and look for any additional signs that they might be an MLM.

2. Resist the Recruitment Rhetoric

Some of our agents have shared that during interviews with other hosts, the host seemed more interested in having them invite others into their agent program than focusing on securing their first travel leads. Any mention of recruiting agents during your interview with a host should raise alarm bells.

Suggested Article: Our Host Agency Reviews

As a new agent, your energy should be channeled into expanding your client base, which will likely begin with your personal networks. If you have friends who are travel enthusiasts, convert them into clients; don't make them your rivals.

3. Assess the Host Agency's Support System

If an agency heavily invests in marketing but offers scant support for their agents, it's likely they operate on a recruitment model rather than refinement. A reputable host agency will provide training, continued education, weekly meetings, a resource portal, and round-the-clock support. If a host seems lacking in back-end support but promises the world on the front-end, it's a warning sign that the host relies on new agent fees to profit and doesn't earn much from their agents' sales. Unfortunately, this is the case for many travel agencies, given that the average travel agent earns around $50,000 a year.

4. The Travel Agent Pyramid Scheme

Some host agencies go a step further and promote a "sub-agent" model. These host agencies are outright MLMs. While there may be instances where having sub-agents is appropriate, most of the time, it isn't. New agents certainly don't need sub-agents. Sub-agents are akin to commission-earning assistants, which could make sense in a well-run travel business led by a large agent. However, the sub-agent should be fully aware of the situation and choose not to become a full-fledged agent independently. Moreover, the idea of sub-agents should be initiated by the travel agent, not the host agency. It's unethical, in our view, to market a sub-agent role with the same allure as an independent travel agent. If your host agency mentions sub-agents, especially if you're a new agent, it's best to distance yourself.

We Stand Firmly Against MLMs

Our host travel agency is the polar opposite of an MLM. We don't profit until our agents do, we never pressure our agents to recruit others, and we don't endorse the sub-agent model. If you're considering joining a travel agent program, discover more about becoming a travel agent with LuxRally Travel.

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