Paycation – another travel membership scam?

Travel used to be something only rich people with yachts did, but now it’s almost impossible to get away from the travelholics and wanderlusters.

From luxury cruises to digital nomads to eco-tourism and travel bloggers, vloggers, and photographers, it’s starting to feel like everyone’s traveling the world.

Paycation hopped on the travel bandwagon and has done quite well with it. Does this mean I’m involved?

This video explains everything:

Make sense? Either way, here’s the full review on Paycation.

Overview

Starting in 2014, travel industry employment has been sitting at an all-time high. [1] There’s been a huge surge in travel for people of all ages – in 2012, young people alone spent a whopping $217 billion on tourism. [2]

So, it stands to reason that there’s ample opportunity to make money off the travel industry.

Paycation Travel aims to take advantage of that opportunity, direct selling style. They’re a “travel services” (travel club) MLM that hires on distributors as “Travel Consultants” and has partnered up with Xstream Travel, a travel agency out of Dallas, TX. Xstream Travel has been in business for over 12 years, so that’s a big plus.

Paycation has been around for two years operating out of Texas, and they’ve got an A- rating with the Better Business Bureau. [3]

Now, they’ve only been in business for a few years, but they’re doing less than $1 million in revenue a year. [4] That’s insanely low. Can you really expect to get rich off a company that can’t even hit 7-figures?

On top of that, they appear to just be a rebranding attempt for Texas-based travel membership MLM TraVerus Travel, founded by David Manning in 2006, who is now the CEO of Paycation.

In addition to David Manning, whose experience mostly lies in recycling MLMs, their president Mark Campese has over 20 years of experience in direct sales. He’s got a pretty well-established reputation in the industry, having served as a national sales trainer for years training tens of thousands of MLM newbies. [5]

Products

Paycation is another travel booking portal that offers travel discounts. You can book anything from entire vacation packages to hotels to rental cars to cruises.

Some of their most popular destinations include Los Angeles, Jamaica, Hawaii, Paris, Cancun, New York, and Chicago. They’ve got a heavy focus on travel within the U.S. but plenty of international destinations as well.

So, you’re selling a membership rather than a tangible product.

The problem with these MLMs is that, all too often, their booking systems don’t actually come up with cheaper prices than free alternatives such as Kayak and Google.

Also, although you can’t earn at high levels, even their lowest level membership ($40 to start and $29.99 per month thereafter) includes an affiliate program that allows you to earn some commission. So, there’s no real line between customer and distributor either.

No tangible product, no line between customer and distributors…sounds an awful lot like a pyramid scam.

Opportunity

Like I said, there’s no real line between buying their product and buying into their business opportunity.

They offer a few levels for joining their opportunity.

1. Independent Associate: For $40, you become an Independent Associate, and for $29.95 thereafter, you’re a member of their travel club. You get commission on both personal and team member sales as well as a personalized website and back office.

2. Referral Travel Consultant: For $99.95 to start and $59.95 every month thereafter, you become eligible for tax benefits and receive your own travel booking portal in addition to your own personalized website and back office. You get 65% commission on travel booked through your own portal and 20% on travel that is referred back to the corporate department.

3. Certified Travel Consultant: If you’re already a Referral Travel Consultant, for an extra $149.95, you can take a certification exam and become certified if you pass it. Paycation, through their partnership with Xstream, offers extensive training to their distributors to make sure they pass their certification exams. Commissions on travel booked directly through you bump up to 75% for Certified Travel Consultants, which is pretty high. [6]

They also offer coded bonuses, matching bonuses, a residual 4 by 7 matrix plan, business builder bonuses, lifestyle bonuses, and diamond team bonuses. Oh, and a car bonus…of course. [7]

However, you can’t receive certification with Paycation until you’ve earned $5,000 in commissions in your first year. This may sound like a pretty humble salary requirement, but if you take a look at the income disclosure for pretty much any MLM, almost no one is making that much.

Paycation doesn’t provide any income disclosure on their website, so even with a pretty high commission rate, it’s impossible to know if anyone is actually making money with them. Given the annual revenue for the entire company is still in the 6-figure range, the answer is probably no.

Recap

So, they do offer extensive training, which is pretty rare in MLM. They even offer certification!

Paycation could be a good opportunity for people who want to get experience working in the travel industry, but it’s not free – at nearly $150 just to take the exam, plus monthly fees of about $60, you’re paying a lot in the hopes that you’ll make some money one day.

At a commission rate of up to 75%, you’d think there would be ample opportunity to make good money. However, no one’s using Paycation as a travel booking service…when 75% of the cost goes toward the travel agent, you can bet the sticker price is being marked up quite a bit.

No, people who join Paycation are almost unequivocally joining for the business opportunity, meaning that your profits rely 100% on your ability to recruit other people.

What happens when the bottom of the pyramid can no longer recruit en masse? Well, it falls out.

They aren’t making any money, so they stop paying their memberships. That means the people above them lose their income, and so on, until the entire company crumbles. We see it all the time in MLM.

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I’m not a Paycation hater, as I’ve shown throughout the review. But it’s still selling hype and the opportunity of getting rich and traveling the world.

Could you make money with it? It might be possible, but you won’t get rich overnight.

If you like automated ways to build passive income, there are better ways.

(and you can trash those old MLM habits, too)

via http://mlmcompanies.org/paycation/