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You too can be a travel agent
By Peter Kaplan
 Michael Gross wants to make you a travel agent.
For $495, Mr. Gross's Orlando, Fla.-based company, Global Travel International, will send you an ID card naming you one of its 19,000 "independent" agents.
Even if you've never booked an airline ticket in your life, the company promises you commissions for any business you drum up, plus discounts on hotels and air travel.
To Mr. Gross and a growing number of ambitious entrepreneurs like him, armies of part-time, independent agents are an ingenious new way to sell airplane seats, cruises and hotel rooms.
"What we've done is redefine what a travel agent is," says Mr. Gross, the company's president.
But whether these part-time travel agents ever get much out of their $495 cards is a question that's being hotly debated as companies such as Global Travel gain a bigger foothold in the travel business. The growing number of card merchants is shaking up the travel industry and raising difficult questions about what qualifies someone to be a travel agent.
"It's like saying, `I'll make you a mechanic for $495 a year, and you'll get free gasoline,' " said Michael S. Pingrey, general manager of the D.C. agency Act Travel. "It gives the rest of us a black eye."
Taking off
Companies that sell travel agent cards often are run by aggressive entrepreneurs such as Mr. Gross, who see themselves as pioneers of the travel business.
Global Travel works this way: Having paid for their credentials, independent agents try to develop a clientele among friends and family. Then they refer potential customers to the company's headquarters outside Orlando, where 100 full-time agents do the booking and ticketing.
In exchange for the referrals, Global promises a commission that runs from about 2 percent for airline tickets to about 5 percent for travel packages and cruises.
On top of that, the company's monthly newsletter touts a list of travel discounts available to Global agents. Global Travel Chairman Randall Warren says the card entitles people to the same cut-rate hotel rooms as professional agents.
Mr. Gross and Mr. Warren believe Global Travel and other companies like it eventually will take over a large share of the U.S. travel industry, which is fragmented into 33,000 agencies.
"If you look at every other industry, they're all going through a maturing process," Mr. Warren said. "Now I think the travel industry is starting to go through that."
Global has grown into a sizable business that sells 10,000 airline tickets a week and advertises regularly in the Wall Street Journal.
`A black eye'?
But the success of travel card merchants has attracted growing criticism among professional travel agents - and the increasing scrutiny of airlines, hotels and even federal regulators.
Travel agencies are one of the least regulated businesses in the country, with almost no licensing or training requirements imposed by either federal or state agencies.
The rise of the card sellers comes at a time when the travel industry groups are campaigning to boost their profession's image. Critics worry that thousands of "independent agents," many of them with little or no training, are staining their reputation.
"Probably the greatest fear is if people are doing this and don't really know what they're doing, it's a black eye for the entire industry," said Bruce Tepper, vice president of travel industry consulting firm Joselyn Tepper & Associates.
The growing number of card sellers has opened the door to scam artists, critics say.
Last year the Federal Trade Commission filed suit against a travel company in Irvine, Calif., called World Class Network, which sold about 51,000 travel agent cards around the United States. World Class promised commissions, travel agent discounts and the potential to make "six-figure" incomes. But as it turned out, almost no one in the travel industry honored World Class cards, and only about 4 percent of the card holders made any money. In reality, the FTC said, the company was a pyramid scheme that expanded by offering card holders a $100 finder's fee per recruit.
FTC investigators estimated the total "consumer loss" from World Class Network at $35 million to $40 million. When the company settled with the government and agreed to reimburse its agents, only about $3 million worth of company assets was left to divvy up.
The perk question
Do card sellers such as Global Travel get people the travel agent discounts they promise? That depends on whom you ask.
Giving perks to full-time, professional travel agents is a long-standing promotional practice. Airlines and hotels typically offer discounts of 50 percent or more as a way of encouraging the agents to book clients with them.
To get the perks, though, nearly all airlines and hotels say they demand that agents have a card from the International Airline Travel Agent Network. And that card is issued only to agents who earn at least $4,500 worth of commissions a year and work at least 20 hours a week in the business.
Stan Bosco, a consumer affairs specialist with the American Society of Travel Agents, said many consumers pay hundreds or even thousands of dollars to get credentials from one of the "card mills," only to find that major airlines and hotel chains don't honor them.
"It's a worthless piece of plastic," he said. "They are promising something to you that they have no way of [being able] to deliver."
Most major hotel and airline companies are wary of giving discounts to independent, part-time agents who don't bring them many bookings in return. Hoteliers such as Marriott International Corp., Hilton Hotel Corp., ITT Sheraton and Westin Hotels contradicted the claim that they give discounts to Global Travel's agents.
"Many of these companies like GTI, you'll find that many people are joining them just to get discounted rates," said Stacie Canova, a Marriott spokeswoman.
"We don't like to give those benefits out to people who are not actually selling travel for us."
In fact, Ms. Canova said, Marriott has been cutting back on the number of agencies that get discounts. During the past year, the Bethesda company has canceled the benefits for 800 agencies.
The owners of Global Travel reject any comparison to companies such as World Class Network. Unlike that company, they said, Global Travel delivers on its promises.
To prove it, Mr. Warren dials Sheraton's reservation line and identifies himself as a Global Travel agent. Despite the company's publicly stated policy, he's promptly given a discounted, travel agent rate in a Florida hotel.
"They look at Global Travel, and they realize how much volume we extend to them," Mr. Gross said. "They want to do business with us."
Mr. Warren said many airlines and hotel companies are afraid to say they work with his company because of possible reprisals from mainstream travel agencies.
The real aim of the Travel Agents Society and other groups, he said, is to stifle competition: "They're trying to preserve the 40-year-old mold of the traditional mom-and-pop travel agency."
The FTC appeared to bolster his case last month when it refused a petition from the Travel Agents Society that would have imposed a broad ban on the "card mills."
The agency said card sellers were "valid consumer protection concern." But it said the society "failed to identify the extent of the harm to consumers allegedly caused by this activity."
The society of travel agents was disappointed about the decision but vowed to keep up its scrutiny of the card merchants.
"If we're going to sell you a card before you actually sell any travel, then you're dealing with a card mill," Mr. Bosco said. "We want to make sure that people out there who are presenting themselves as travel agents are indeed in the business of selling travel."
Source: The Washington Times
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