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Travel Research Online has sent out an email with its reaction to the RCL announcement.

It is time for the associations of the industry to begin to consider a very serious effort to self-police the definition, training and ongoing education of travel agents. Two very good reasons for undertaking these efforts immediately are evident:

The latest spate of card mill type operations will go away, only to be replaced by some other aberration that will manage to sidestep the emerging attitude by suppliers. Further, not all suppliers will deem it in their best interests not to deal with card mills. Until a clear, enforceable definition of "travel agent" exists nationally, some new permutation of the card mill will emerge on a regular basis.

If the trade does not take up the cause, it will come from some other direction. Eventually some consumer group will insist on standards and the legislation will happen without the type of initial input that will best serve the travel agency community. Standards will affect everyone in the industry and will not be without burdens of their own, such as continuing commitments to education and training. In the past, legislation developed without agent input has focused on the wrong issues, requiring agents to post bonds rather than to enhance professionalism. Most card mills could more easily post bonds than the average travel agency or agent. The trade needs to take the initiative to control its own destiny.

A few observations:

First of all, the travel industry has been attempting to "self-police" this area for over a decade! All too often, these efforts have devolved into shouting matches between agents over who's more "real" than the other. Basta! Let's not encourage more of that, please.

Organizations like OSSN have done an excellent job of raising and defining standards, as well as providing support and educational opportunities for the home-based travel agent community. Indeed, the RCL statement specifically mentions OSSN's accreditation as a marker of agent professionalism!

The spectre of legislation is abhorrent. Existing legislation has done nothing -- zero, zilch, nada -- to either promote professionalism or protect the consumer. The typical model for legislation is the California Sellers of Travel law which levies a tax (although it's not called that) on travel agencies and uses the proceeds to reimburse victims of fraud. In essence, honest travel agents are penalized while the state lets the criminals go free, because after all the consumer has been reimbursed. Meanwhile, the politicians can brag to their constituents that they're "protecting" them. Again, OSSN has done immensely more to enhance professionalism in this sector than any politician ever will. I'd also like to think I've made my own modest contribution by teaching new agents how the industry really works.

And asking legislatures to ban card mills is a fool's errand. It's been tried and failed for the simple reason that (apparently) what card mills do is perfectly legal. Just like pornography. Offensive to some, unethical perhaps, but legal.

Asking suppliers to follow RCL's lead may be laudable, but it is not in and of itself a solution. As TRO notes, not all suppliers will rebuke so-called card mills. Why? Because they can produce significant volume. Most holders of these cards book their travel at going rates and the suppliers pay the normal commissions. It's a booking just like any other.

As to the "travel agent rates" these card holder get, in most cases they are getting the same discounts with their $495 ID card that they could have received by joining a $50 travel club. My observation has been that the super-duper "agent-only" rates touted by card mill agencies are the result of group discounts negotiated based on their volume with the cruise line. The suppliers know this, even if the ID card holders (and many industry observers, it seems) don't seem to get it.

And even if the holder of a "phony" ID card gets on a "real" fam cruise, they are paying something for a cabin that otherwise would have sailed empty. And they drink and gamble and shop while aboard and buy shore excursions. I know, because I've watched them do it! So the cruise lines are making money on the deal at a minuscule increase in marginal cost.

And while it may happen, I doubt that there are many "true" fam trips (which I define as those that are either free to the agent or at a truly minimal cost) that are offered to agents who are not producing volume.

The only sure-fire way to end card mills once and for is for the accrediting agencies like ARC, IATA, and IATAN to stop accrediting them. It would seem to be a simple matter for them to establish additional requirements (like ARC's now quaint requirement that a travel agency have a safe of such-and-such a level of security) in order to be accredited. Those additional requirements could include not operating a card mill or providing ticketing to a non-travel-agency company that does. End of problem.

But these agencies have, for reasons that remain obscure, decided not to do that. Unless and until they do, suggesting that travel agents continue to wage internecine warfare on one another is, in my opinion, not productive. Let us not forget that mnay people who sign on with card mills do so with a sincere interest in becoming travel agents, albeit with a misguided understanding that this is the way to go aboiut it.

Here's a free idea: Why don't the cruise lines institute a special seminar for card mill card holders who go on their fams? "Oh, you're with Agency X? Then you'll be very interested in the exclusive seminar we have for you! We'll be serving shrimp!"

In these educational sessions, the cruise lines sales reps can show these people what a rotten commission deal they are getting from their current agency and how easy it is to earn real commissions. They could offer them a commission incentive if they put down a binder on group space -- that'll separate the wheat from the chaff! Perhaps they could do so in concert with PATH host agencies, who ideally would make it very economical for these agents to make the switch.

OSSN has posted RCL's statement about decertifying certain agencies.

An excerpt:

The significant problems associated with this growing segment of the agency distribution system [i.e. card mills] are numerous and include the following:
• 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 commission in connection with the booking.
• They can mislead normal consumers with unrealistic expectations of "travel-agency-only benefits” when, in fact, they are not travel agents.

In addition, the rapid growth of this segment combined with the lack of control over members by these agency headquarter organizations accelerates the necessity for swift action on our organization's part to curtail the expansion of this disruptive and destructive market segment.

Ouch!

Here's an excerpt from an interesting (to say the least!) letter that Royal Caribbean Cruise Lines is sending to its travel partners.

We are writing to provide you with important information regarding the new manner in which we will be dealing with certain travel-related business practices.

Royal Caribbean International®, Celebrity Cruises® and Azamara CruisesSM 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.

I have been writing about this practice for well over ten years and devote considerable attention to the issue in my travel agent course.

While the traditional travel agent community has been vocal in opposing the practice of issuing ID cards to anyone willing to pay for them, other segments of the industry, such as ARC, IATA and IATAN which could effectively put so-called card mills out of business should they wish to do so, have not taken action.

The fact that these companies have not been prohibited by the authorities, despite lawsuits and other attempts to shut them down, leads me to the conclusion that, whatever you may think of so-called card mills, they are legal.

The key to ending card mills rests with the suppliers. But have suppliers been not particularly keen on policing their own fam and discount policies. Yes, airlines will not "honor" such cards for upgrades and such, but airlines don't honor much of anything these days. RCL's initiative could change that.

It will be interesting to see how this plays out in the travel trade press over the coming weeks and whether or not RCL's stance will "go viral" within the ranks of travel suppliers. If it does, the business of model of more than a few host agencies will become effectively obsolete, although I suspect they will not immediately fold their tents and slink off. Most agencies that use the referral agent model (a nicer way of saying "card mill") have long had fine print that counsels their agents that industry benefits are at the discretion of the supplier and instructs their agents not to complain if their request for a discount is denied.

It would also be interesting to know exactly which companies RCL has in mind (the letter doesn't say). I suspect that they will not take action against all the host agencies that critics label as card mills. Some of them produce significant volume for the cruise lines, even if most of the bookings are for their own agents.

One of the closely guarded secrets of the referral agencies is that the cruise "fams" they offer to their agents are often not especially good deals. Cheap, yes. But the cruise lines are often charging the agents in question the same price they'd give to virtually any group of that size. In other words, if all you're interested in is a bargain, with a little smart shopping you can get the same deal without shelling out money for an ID card.

Then, too, there will always be suppliers who will provide discounts, knowingly or otherwise. My guess is that people who acquire these cards will still get "travel agent rates" at hotels without ever knowing what the actual travel agent rate is or that they could have gotten exactly the same rate by flashing their AAA card. And, of course, there are still hotel desk clerks who cannot tell a real IATAN card from a lookalike.

I also think it's important to note that this action by RCL, even if copied by other cruise lines and tour operators, will not do anything to stem the growth of the home-based travel agent sector. If anything, it will help us grow both in numbers and professionalism.

It is astonishingly easy to meet the minimum requirements to be taken seriously by the travel industry. Not only that, but doing so often costs less than the price of those ID cards! It is only slightly more difficult to start earning significant income by producing actual bookings for suppliers, including RCL, who are more than happy to extend industry courtesies to their actual "partners." In fact, I will be going on an RCL fam cruise to Bermuda in a few short weeks!

If you are reading this because you are interested in becoming a home-based travel agent, I urge you to educate yourself by signing up for my free six-part mini-course for wannabe home-based travel agents (scroll down when you get there). And while you're there, sign up for my equally free bi-weekly newsletter.