So, you have come across this term ‘travel MLM’ and you are wondering what is means? The travel industry continually evolves (which is one reason why I love the travel and tourism industry– it never gets boring!). However, there is one new term that has been flying around lately that have some people confused- travel MLMs. What is this newfound business model? Is it even new? Is it bad? What does it mean for the industry? Read on to learn all about it…
Related reading: what a host agency is and how it works and the pros and cons of being a self-employed travel agent.
What is an MLM?
Have you ever had someone ask you to join their team at Avon or seen your friend promoting products by Tropics Skincare on Insta? Yep- they were promoting an MLM business.
Multi-Level Marketing (MLM), also known as network marketing, is a business model where individuals sell products or services directly to consumers. In addition to personal sales, these participants are encouraged to recruit others into the business. This recruitment creates a hierarchical structure, often termed a ‘downline,’ where the original participant earns commissions not only from their own sales but also from the sales made by their recruits. The recruitment part is often where the most money is made and if recruitment slows down significantly there will likely be insufficient commissions to pay to the ‘upline’, thus causing the hierarchical structure, or pyramid, to collapse.
The global MLM industry has experienced significant growth over the past decade. In 2022, the market was valued at approximately $200 billion and is projected to reach around $328 billion by 2030, reflecting a compound annual growth rate (CAGR) of about 6.4% from 2023 to 2030. MLM is most commonly prevalent in industries such as beauty and cosmetics, health and wellness, and utilities and more recently, travel.
Are Travel MLMs a Thing?
In recent years we have seen more travel MLMs start to pop up. This means that they are travel-based organisations that operate under the MLM structure (in part or entirely). Most commonly in this model, individuals become independent travel consultants or agents, offering travel-related services such as vacation packages, cruises, and hotel bookings. They also recruit others to join their network, earning commissions from both their personal sales and the sales made by their downline. This approach allows participants to build a business centred around travel, using their personal networks (think- the mums at the school gate, old school friends, relatives) and marketing skills (Instagram and TikTok are major platforms) to promote their services.
Examples of Travel MLM Companies
You are probably wondering which companies that you are familiar with might be travel MLMs?
Several companies operate under the travel MLM model, offering various services and opportunities. Examples include:
- InCruises: Founded in 2015, InCruises offers membership-based cruise vacation packages, allowing members to access discounted cruise rates through a subscription model.
- Jifu: Established in 2018, Jifu provides a travel portal offering members discounts on hotel bookings, flights, car rentals, and other travel services.
- MWR Life: Since 2013, MWR Life has offered travel club memberships, providing access to discounted travel services and lifestyle benefits.
- Evolution Travel (partnered with Archer Travel): Founded in 1952, Evolution Travel operates as a host agency, offering individuals the opportunity to become independent travel agents with access to various travel suppliers and training resources.
- InteleTravel (partnered with PlanNet Marketing): Established in 1991, InteleTravel offers individuals the opportunity to become independent travel advisors. While primarily a host agency, InteleTravel’s partnership with PlanNet Marketing introduces an MLM component, allowing advisors to recruit others and earn commissions from their downline.
- Essens Travel: Established in 2011, Essens Travel is part of the Essens Group, providing members with access to exclusive travel deals and discounts on hotels and flights.
- ByDzyne: Founded in 2019, ByDzyne offers a range of products, including travel services, beauty, lifestyle, and wellness products, operating on an MLM model.
- iBuumerang: Established in 2019, iBuumerang provides discounted travel services and a unique “prib” (perpetual residual income builder) system for its members.
- Surge365: Established in 2015, Surge365 provides travel club memberships with access to discounted travel services and opportunities to earn through its MLM structure.
- DreamTrips International: Founded in 2005, DreamTrips International offers curated travel experiences and memberships, operating within an MLM framework.
Video: The truth about Evolution Travel
Are Travel MLMs bad?
Travel MLMs are a legitimate business model that emphasises direct sales and entrepreneurship. When implemented ethically (which isn’t always the case unfortunately), travel MLMs provide people with opportunities to build their own businesses in the travel industry, develop sales skills, and earn income based on product sales.
In many countries including the UK, the USA, Mexico Australia, Canada and the European Union, travel MLMs are legal as long as they involve genuine product sales and comply with disclosure laws. However, it’s important to distinguish them from illegal pyramid schemes or ponzi schemes, which focus primarily on recruitment without offering real products or services. Engaging in pyramid schemes is illegal in most countries, therefore, it’s important for participants to thoroughly research and understand the specific organisation that they are considering joining.
How Does Payment Work with a Travel MLM?
In a travel MLM your earnings typically come from two main sources: commissions on personal travel bookings you make and bonuses/residuals from the sales made by individuals you recruit into the network, known as your “downline.”
Each travel MLM will compensate slightly different. To get an idea of the payment structures of two of the major travel MLMs in the industry right now I suggest you watch the video below- it explains really simply how and why compensation is accumulated.
Hybrid Travel MLMs
In the travel industry, many MLM models, such as Evolution and Inteletravel, are actually hybid MLM models. This means that they are only part MLM and that there is no obligation for you to contribute to building a downline, allowing you instead to focus solely on your travel business. Organisations operating under such a hybrid model use the MLM structure as a means of expanding their business only, with the travel product or service being the main focus.
So what does this mean in practice? This means that you can only join the business by being signed up by a contact and therefore becoming their ‘downline’. However, you have no obligation to build a downline of your own.
The Pros of Travel MLMs
Whilst the MLM business model can sometimes have a bad reputation due to the sometimes heavy focus on recruiting others to join the business below them, the MLM model can also be a good way to grow a business. Some of the pros of joining a travel MLM include:
- Flexibility and Independence: You will likely have the freedom to set your own schedules and work from various locations, making it an attractive option for those seeking a flexible career such as students, long-term travellers or non-working parents.
- Travel Benefits: Many travel MLMs offer incentives such as discounted travel rates, exclusive deals, and familiarisation trips (yes- FREE travel!), allowing agents to experience the products they sell firsthand.
- Entrepreneurial Opportunity: Joining a travel MLM provides you with a platform to start your own business without the need for significant upfront investment, which is a game-changer for many.
- Training and Support: Reputable travel MLMs, such as Evolution Travel, provide comprehensive training programs and support systems to help their agents succeed, NOT in recruiting other agents, but in selling the product or service!
The Cons of Travel MLMs
Whilst there are many reasons that people choose to join travel MLMs, it is important to also be aware of the limitations, which I have outlined below.
- Emphasis on Recruitment: Some travel MLMs place a heavy focus on recruiting new members, which can overshadow the actual selling of travel services.
- Variable Income: Earnings in a travel MLM are typically commission-based. This means that your earnings are not guaranteed- it is up to you to make your business successful!
- Market Saturation: In areas where there are a lot of travel MLMs working for the same company it may be difficult to sell your products.
- Reputation Concerns: Due to the mixed reviews of MLMs, some individuals may be hesitant to engage with travel MLM agents, impacting the ability to establish trust and credibility in the market. (but it is important to remember that not all organisations are the same and that you do your research!)
Are Travel MLMs Right for You?
Perhaps you have landed on this page because you are considering joining a travel MLM. If this is the case, I urge you to conduct thorough research on the travel MLM that you intend to join, try to find out how many people are also part of the MLM in your area (is is already saturated?) and find out whether the priority of the orgaisation is to product or service that they are selling (e.g. holidays) or recruiting members to the MLM to build and benefit from a downline (which is a major red flag).
Personally, I believe that travel MLMs, particularly the hybrid models, offer a unique opportunity for people to build business in the travel agency that they may not otherwise have access to. However, it is important that you do your research and make sure that the MLM that you choose have a travel base organisation, with recruitment NOT being the focus of the business.
Here at Tourism Teacher I offer support and guidance for those who are considering becoming an independent travel agent, which is something that many travel MLMs offer. If this is something that you would like to know more about, add your email address here and I will send you some more detailed information.
