Volume 228, No. 126 • December 27, 1996
New Breed of Travel Agent Scares Old Breed
By Martha Brannigan
Staff Reporter of The Wall Street Journal
Seth Werner, chief executive of a Florida mortgage business, doesn’t
know beans about arcane airline ticketing codes or hotel reservations
systems. What he does know is how to write a check for $495.
And that has made him a travel agent.
Mr. Werner is one of some 6,000 *
“independent agents” for a two-year-old company called Global
Travel International in Maitland, Fla. Global Travel has 33 full-time
agents handling airline, cruise and hotel reservations for clients
across the country. But it also signs up independent travel agents, or
contractors, for $495 each. With their credentials as travel agents,
these contractors are eligible for many of the discounts and
privileges the industry accords its distributors. Virtually anyone
over the age of 18 can obtain the credentials.
Operations like Global Travel and a handful of others have set off a
heated debate in the industry over the very definition of a travel
agent. Critics characterize companies that sign up armies of outside
agents as “card mills” that tarnish the image of the industry and
may rob full-time agents of their fair share of discounts.
Global Travel’s independent agents argue that they generate travel
sales for hotels, car-rental firms, airlines and cruise lines-even if
it’s done part-time and primarily for themselves. “We’re happy
to be using it in a very legitimate sense,” says Mr. Werner. “We
do function as an in-house travel agent.” Besides employees booking
their own business travel, he says, his company sometimes books
out-of-town business visitors at nearby hotels in Plantation, Fla.
The payoff for the independent agents: discounts of as much as 50% and
occasionally even more. A recent stay at the Hotel Nikko Atlanta cost
Mr. Werner $90 a night, compared with a corporate rate of $195.
What’s more, every time Mr. Werner or an employee books a hotel room
or rents a car, he earns a commission through Global Travel. Each
month, the company mails him a check; for December, he received $341.
Mr. Werner has also signed up about a dozen of his own employees as
“travel agents.” Agents like him get a one-time referral fee for
each friend who joined. “It’s been nothing but a positive for
us,” says Mr. Werner.
To traditional travel agents, however, Global Travel is insult atop
injury. Already reeling from commission caps imposed by the airlines
and growing competition from on-line services, the industry now sees
sales being siphoned off by thousands of independent agents. This
year, Global Travel will book about $20 million in commissionable
sales, its owners say.
Global Travel was founded by two roommates at American University in
Washington, D.C., Michael Gross and Randy Warren, now 28 years old and
the company's president and chairman, respectively. They say many of
their independent agents enter the travel business as a second or
part-time job. Indeed, new agents sign a contract stating they plan to
sell travel and aren’t applying solely to get travel-agent discounts
and perks.
Alison Brod, a 26-year-old publicist and Global Travel agent from
Manhattan, says she steers colleagues to Global Travel, including a
few who made honeymoon arrangements last summer. “Just because I do
it part-time doesn’t make it any less a job,” she says.
Her payoff: By displaying her Global Travel agent photo identification
card, she and her husband received an upgrade to a suite at the
Lanesborough Hotel in London and received a travel agent discount at a
five-star hotel in Seville, Spain. Sometimes, Ms. Brod adds, she gets
an upgrade to first class on flights by asking the gate agent, with a
deferential smile, whether space is available to her as a travel
agent.
Legally, the travel agents group has little recourse against
independent agent networks. Some suppliers like the new style travel
agents says Vicki Freed, Carnival’s senior vice president of sales
and marketing. “It’s a new way of looking at the business.”
* Highlights selected from Wall Street Journal National Editor,
December 27, 1996.
** As of August, 2000, Global Travel International has 35,000
Independent Travel Agents in 50 states and 22 countries serviced by a
team of 250 employees in Orlando, Florida.
* As of August 2002 Global Travel has
over 40,000 Independent Travel Agents in 50 States and 85 Countries
serviced by a team of over reservationists and support staff in
Florida. The current price for their program is $495 with an annual
renewal of $129.
