Happy New Year!

What I Didn't Learn This Year

But, what I don't understand is why I did not learn the things I set out to learn. Things such as:

• Why a compensation plan takes 12pages to define.
• How YTB arrived at $226 Million in travel sold for 2006.
• Why so little of the "training" at the annual convention was for travel.
  
• How nearly 150,000 RTAs can pay in the course of 9 months $79 million dollars in website sales, fees, and training; and receive $9.3 million in return.
• And for those that say I don't get the math, I did not learn how nearly 150,000 people paid in $79 million dollars and only got $64 million in return.
• Why it is a good thing to have your top executives selling off stock.
• Why a 3:1 split was a good deal when two of the three shares are worthless.
• Why employees at YTB could not sell me a cruise on November 9th.
• Why when presented with facts and figures, the argument mysteriously turns to "you don't understand".
• How many RTAs drop out in a month...a year.....
• How long does an RTA continue to pay the fee before canceling.
• How it is a misunderstanding with IATAN and Royal Caribbean.
• How the air gets booked -- through a YTB ARC number or a Travelocity number.
• What exactly the insurance covers that YTB claims covers all of the RTAs.
• The number of RTAs and Reps that actually comply with local business licensing regulations.
• The number of RTAs that comply with the Seller of Travel laws in the states that have them.
• Why there have been no updated RTA earning reports since July 2007. Never mind I know--too embarrassing.
• How a company can offer health insurance and not have the people classified as employees.
• Why all Reps and RTAs are afraid of divulging a ballpark figure of their earnings for fear of the SEC coming down on them.
• Why, out of over 300,000 views of my column, was not one single RTA able to step up to the challenge and prove that they are earning a living selling travel.
• Why people involved in one MLM that did not work for them, seem to gravitate toward another. I smacked my dog in the nose enough times and he knows not to pee on the carpet.
  

More Things I Have Learned

My last post covered some of the things I have learned in the last few months. Here are some more:

• I learned that most MLM folk do not understand the concept of a petition
• I learned that while Carnival Cruise Line's net profit fell 14%, Royal Caribbean's increased
• I learned that most MLMers have no clue what the the Director of Hotel Operations does
• I learned that most suppliers seem to place more value in quantity than quality...for now
• I learned that some folks in the MLM world are unaware there is a difference between CLIA and IATAN
• I learned that cruisinman's sources do not tell him the truth
• I learned that nothing happened on October 15th (and I was not surprised)
• I learned that there is a big push to sign up before the end of the year in order to avoid the need to sell pesky travel to earn the perks
• I learned that most YTB folks will not do anything without the "Coach" "pulling the trigger"
• I learned that many friends and family of YTB RTAs will be getting cruise certificates for Christmas and birthdays this year--even if they don't like to cruise
• I learned that "The Coach" is not too original--more on that later
• I learned that RTAs purchase brochures from YTB when they could get them for free from suppliers
• I learned that the MLM Mantra is "Tell everyone that comes withing three feet of you about your business opportunity"
• I learned that Bentley Motorcars really does NOT offer a Cocaine White color--it was all a lie
• I learned that several agencies are interested in travel MLM companies and are actively watching them

What I Learned This Year

I went through a lot of school in my younger years, but 2007 really turned out to be a learning experience for me.

I learned that:

• Some MLM agents are serious about selling travel
• Most MLM agents are not serious about selling travel
• Bentley Motorcars offers a convertible in "Cocaine White"
• YTB does not calculate revenues, they "glean" them
• Nearly 3000 traditional agents can take a stance on a petition in two months
• Just over 200 MLM agents can take a similar stance on their own petition in nearly three months
• YTB took some very proactive steps in controlling the masses with their "Behavior Memo"
• The memo worked
• YTB will sell either $500M, $800M, or $1B in travel in either 2007 or 2008
• I learned that YTB received over 70% of it's income from selling websites--not travel
• I learned that if you own a lot of stock and can sell it very high, you are able to buy a kick ass house on the Mississippi River
• I learned that EAB was promoted to "CEL" of YTB--Chief Executive Loudmouth and was able to craft poorly worded press releases
• I learned that the concept of revenue and sales is still a grey area for many in YTB
• I learned that the YTB stock went from $9.50 a share to .94 cents over the year but that is nothing to worry about
• I learned that YTB made its first profit in two quarters, but it was on the sales of websites, not travel
• I learned that Doug has a good sense of humor and although on opposite sides, I consider him a friend
• I learned that EAB is looking to expand the empire to Hawaii and is seeking "partners"
• I learned that CLIA, Carnival, and IATAN all have employees at the YTB Headquarters
• I learned that there were either 5K, 10K, 12K, or 25K YTB people at the convention in St. Louis
• I learned that Rufus has issues with his booogers
• I learned that Ryan Stallings (the yes, yes, yes YouTube Marine) is a top seller of travel for YTB
• I heard that a sales force numbering 136,000 strong were able to sell either 6K, 13K, or 45K cruises in a day
• I did the math and that ranges from .04 to .33 cruises per salesperson

There is so much I learned this year it is hard to keep track of it all.

Merry Christmas!

In the end, it does not matter which side of the fence we are on; but we can all share the beauty of the holidays with our families and friends. I offer my most sincere wishes to everyone for a safe, happy, and joyous Christmas! From my home to yours, I wish you nothing but the best!

--John

Dear Santa

Dear Santa,

It is almost Christmas and I know you are probably very busy getting ready for your annual trip around the world. I wanted to thank you for you continued confidence in booking your trip with a trusted professional travel agent. It would be horrible to disappoint the millions of children, by allowing someone that has purchased their credentials to handle this journey. There is simply too much riding on it!

I am glad to be able to handle your travel for Christmas Eve (and your well deserved off season Caribbean break). I am keeping an eye on the weather for you and will make sure you are aware of anything that will impact your trip. I have all of the contacts for you so I can get in touch with you should an elf call me about a last minute toy that needs to be delivered (it always happens). I have been in touch with Mrs. Claus because she worries too--even though you have been doing it for a long time, she loves you and worries, so I try to keep her in the loop as well. You are all set for insurance should you be delayed, or (heaven forbid) have an accident. After that unfortunate incident last year with Vixen, you are even covered for unexpected reindeer dropping damage. And finally, I have confirmed your rest breaks with the hotels in the cities we discussed--they are aware of your schedule and will have the red (what other color?) carpet out for you!

Santa, I am glad you have put your trust in me. I have worked very hard to learn my trade and to provide exceptional service to my customers. I realize (as do you) that travel today is so much more than getting from one place to another. And when there is a trip as important as yours, it really drives that concept home. You just can't point someone to a faceless, nameless website and let them hope for the best. Explain that to millions of kids on Christmas morning..."Oh Santa did not make it this year because he booked his trip on his cousin's brand new website." Unlike your reindeer, that will not fly. But I wanted to again thank you for your business. You have my numbers--they are actually on my website--and you also have my home and cell numbers and you know to use them if needed.

I am closing up the office for the holidays, but rest assured that when you stop at my house (you are coming right?) that I will have your usual--chocolate chip cookies and 2% milk--see as your agent, it is my job to know those things! Have a safe flight, be careful on the rooftops, give the herd a pat on the nose for me and send my regards to Mrs. Claus!

And one final thing...Merry Christmas!

Your professional travel agent,

Fred E. Flyer
Travels With Fred

PS: Don't worry about it now, but I think Saba might be the perfect spot for you and the Missus after the holidays. Never too crowded and I am friends with the owners of a perfect little resort that will be just right for you.

The Information They Don't Want You To Know

An interesting document was sent to me today that I wanted to share. It is the S-8 Filing by YTB on November 28, 2007 which for some reason received little fanfare and no press releases from the headquarters. Essentially, the document is the registration statement for the company and was prepared because they were offering their own securities to employees in a benefit program.

What I found interesting was that a lot of what is presented here was diametrically opposed to what was presented at my presentation last week. For instance, I always was under the impression that YTB was not out to compete against traditional travel agencies--who would have thought! Maybe someone ought to let 136,000 RTAs know the truth! I think that this document ought to be required reading for RTAs. I have to think that if I was interested in YTB or a travel MLM career, I would be running pretty fast after considering some of the risks that they acknowledge in this document. Items in parenthesis are my own comments.

• Our ongoing activities may require us to seek additional financing, which may not be obtainable or may be unduly onerous or dilutive.
• Our revenues are highly dependent on website hosting fees received from travel agents and agencies. Fees from hosting websites that we offer to home based representatives make up over 70% of our revenues.
• Adverse publicity associated with our products, services or network marketing program, or those of similar companies, could harm our financial condition and operating results.
• Our marketing program could be found not to be in compliance with current or newly adopted laws or regulations in one or more markets, which could prevent us from conducting our business of marketing online travel agencies in these markets and harm our financial condition and operating results.
• Since we cannot exert the same level of influence or control over our Reps and RTAs as we could were they our own employees, our Reps and RTAs could fail to comply with our policies and procedures, which could result in claims against us that could harm our financial condition and operating results.
• Adverse changes or interruptions in our relationships with travel suppliers could affect our access to travel offerings a reduce our revenues.
• We operate in a highly competitive market and we may not be able to compete effectively. (and listed as a primary competitor) other local, regional, national and international traditional travel agencies servicing leisure and business travelers.
• We may not protect our technology or other intellectual property effectively, which would allow competitors to duplicate our products. This could make it more difficult for us to compete with them.
• Evolving government regulation could impose taxes or other burdens on our business, which could increase our costs and decrease demand for our products.
• Our business is exposed to risks associated with online commerce security and credit card fraud.
• As a result of our operating history in online commerce and the variability that can be experienced by our franchise operations, we are unable to accurately forecast our revenues. (that explains the TW ranking and the Sail-A-Thon)
• We expect to experience significant fluctuations in our future operating results due to a variety of other factors, many of which are outside of our control. (including) governmental regulation.
• Liquidity on the Pink Sheets Electronic Quotation Service is limited and we may not be able to obtain listing of our Class A Common Stock on a more liquid market.
• Our Class A Common Stock has been thinly traded and the public market may provide little or no liquidity for holders of our Class A Common Stock. Purchasers of our Class A Common Stock may find it difficult to resell their shares at prices quoted in the market or at all.
• The exercise of options granted under our equity compensation plans could cause your ownership in our Company to diluted and may decrease the value of your investment .
• We do not expect to pay any dividends to the holders of our Common Stock for the foreseeable future.

So, how comfortable are you with a company like this? August 3, 2007 YTBLA $8.50/share. 139 days later, December 20, 2007, YTBLA $1.07/share. A little over 4 months, the stock is losing an average of 5.3 cents per day of value. In just over a quarter, the stock has lost 87.5% of its value. And in the past two months alone, the biggest drops were (as expected) when YTB finally acknowledged that Royal Caribbean terminated their agreement, and when IATAN revoked their endorsement.

.

What Is A Card Mill?

Back on October 17th, a white paper was created at ASTA defining a card mill. Certainly this was in response to the announcement by Royal Caribbean International to drop several agencies, and ASTA's support of the move.

What I find interesting, is that this white paper has not materially changed over the years. It seems to be the same "MO" for the card mills time and time again. Eventually, they will go away, but in the meantime, they wreak havoc in the industry.

Consumers become alienated and confused. Vendors can feel that they were duped. And of course the traditional travel agents (home based, online, or the "dying" brick and mortar agencies) suffer the brunt of the damage with a huge black eye. The card mill will reinvent and move to another industry and so the cycle begins again. And oh yeah, the ones that buy into the program typically find that the thousands of dollars invested would have earned a higher return playing scratch-off lottery tickets!

YTB has come out with guns blazing with proclamations that they are not a card mill. They are releasing press release after press release highlighting some of the agent-esque things they do--like their 136,000 "agents" selling between 6000 and 6500 cruises a day*, or partnering with a non USTOA listed tour operator for the Summer Olympics, to hanging their hats on a marginally investigated special edition of Travel Weekly where they were listed as a top "agency" in the US. By their actions, one would think that they too are against card mills.

Well, according to ASTA, here are the 5 signs that may indicate a business is really a card mill. So, where does YTB feel it is so different? Maybe ASTA (an organization that is recognized as THE trade association for travel agents worldwide) is just as wrong as Royal Caribbean, Perillo, and IATAN. Maybe Kim Sorensen needs to work a little harder at "legitimizing" this business--and I will say that I feel that the term "legitimizing" is a very interesting choice of words coming from YTB.

1. The cards expressly represent that the holder is a “travel agent” and imply that the holder is actively engaged on an agency’s behalf in selling travel to the general public. Both representations are false and intended to deceive suppliers. (YTB calls then RTAs upon signing up and CRTAs when they attend a class. TraverUs calls them CTAs. Anyone want to venture a guess as to what the "TA" in the abbreviations mean? Would anyone like to guess if the abbreviation is spelled out on a the credential card?)
2. Ads promise glamour and the high life at a bargain, and the chance to make money with little effort. (Has anyone seen an ad inviting you to "Travel Like An Insider" or offering lucrative discounts? Has anyone heard the pitch "For $50 a month, you just point people to your website and earn 60% commission off of their travels. You can earn money while you sleep!"? Heck, Travel Weekly even ran a news story on an agency that was trying to offer this to its clients--mycruisebookings.com. )
3. Card mills’ promotional literature is replete with references to cards or cardholders” status as being “official,” “certified,” “accredited,” “endorsed” and/or “approved,” falsely implying that persons who purchase the cards automatically enjoy good standing with industry accrediting bodies or with suppliers generally. (OK, the gig is up, CRTA=CERTIFIED Referring Travel Agent, CTA=CERTIFIED Travel Agent--as opposed to The Travel Institute's industry recognized CTA)
4. Card mills fail to disclose, or fail to disclose in a prominent manner, that suppliers such as airlines and some large hotel chains will not honor the card at all if presented in support of a request for agent discounts. (Has anyone attended a presentation? While it may be in small writing in the back office, the message is loud and clear that the suppliers are all supporting the program. A presentation I attended even displayed the RCCL and Celebrity logos--and this was two weeks ago.)
5. Card mills may falsely promise to supply “training materials” and agent “support services” that will adequately equip the purchaser to function as a travel agent. (While some MLMs may offer these, it is typically at a substantial additional cost that may or may not be disclosed. The "training" in many cases is not terribly useful in that it is more product presentation from specific vendors and not about the business of selling travel. And in most cases, it is utilized as a stepping stone to a legitimate credential in the form of a CLIA card. The training is usually not required and is attended by a vast minority of the people in the program.)

So, TraverUs, YTB, GTI, et al---can any of these be refuted? In a prior post I was lambasted for saying "it it looks like a duck, walks like a duck and quacks like a duck...well it must be a duck". So, I will say it again....it looks like a mill, smalls like a mill, operates like a mill....must be a mill!

Maybe the next post will take a look at the damage it does to the consumer.

*Apparently we are still not sure of the total nearly two months after the event. One press release indicated 13,000 passengers, but in a release yesterday, Scott Tomer claimed it was 12,000 passengers. But if you ask some RTAs, they might claim it was 45,000 cruises sold, or even $15 million dollars. I am not sure we will ever know, but for now I will go with the official "guess" from YTB and say it is between 12,000 and 13,000 PASSENGERS that either bought certificates or a cruise which will equal about 6000 cruises for the sales team of 136,000.

Does MLM Need Viagra?

It has been said that most MLM models will burn themselves out eventually and the guys on the top will just move on to a different market. The last few months have been spent squawking about YTB and the MLM model and as I look at their performance, I wonder if indeed they may not be on the downswing.

That is not to say we should give up a fight or give then a "pass"; but, I wonder if YTB has peaked. Perhaps the news we hear is more fluff than substance. Perhaps not. But Mark Ewing pointed out two trends to me that I feel are worthy of noting and are an interesting snapshot of YTB.

Alexa ratings:
The brown line indicates the recruiting domain (ytb.com) which all Reps have and most RTAs. Since they are all a subsite of the main one, this is a good barometer. The blue line indicates the main domain for the booking websites(ytbtravel.com)--again all booking sites are subsites of the main one, so this too is a good barometer. For those not familiar with Alexa ratings, it is an Internet traffic cop. As a prospect, I would certainly question why the apparent decline. And I also have to think that a good portion of this traffic (at least post October) has been from referrals from various sites disacussing their issues with RCI and IATAN.



And looking at the stock picture, it shows a similar trend. Again, as a prospect, I would be remiss in not questioning this.

Research courtesy of Mark Ewing

Both charts seem to follow the same trend and it appears that the peaks were very early in 2007. So if any prospective RTAs are out there, this might be a good question to ask.

Psst...Carnival, Apple, Collette, NCL..It IS About The Perks (But Don't Tell Anyone)

Even after my meeting the other day, I was solicited again by a YTB agent via email. I engaged them via email (complete with my full signature including the link to this blog--go figure) and asked them to send me some information on the program. I was directed to go to a website that had all the information I needed including all the perks I can reap for traveling like a pro and the tax advantages!

Now I am not sure how long these will remain active as it seems YTB has been pretty proactive in removing anything that makes my position stronger, but I will post some excerpts here. You can surf that site and see for yourself as well. As for the documents, I have them on my hard drive.

But, read this post, check out the website, and look at the presentation and then tell me that they are about selling travel. It is about the perks. It is about tax savings. It is about recruiting more people into the pyramid.

This document is an invite to a presentation announcing your new travel business. The headline is:

Travel like the pros never pay full price again travel wholesale

This document is for a postcard that can be distributed.

Travel first class for pennies on the dollar.
You will receive Travel Agent Credentials!
Have access to Familiarization (FAM) Trips!
Significantly, discounted trips around the world!

- Princess Cruise Lines from $25 per day .
- Royal Caribbean from $40 per day
- Celebrity Cruise Lines from $40 per day
- Norwegian Cruise Lines from $35 per day
- Disney Cruise Lines from $80 per day
- Radisson Seven Seas from $125 per day
- Holland America from $60 per day
- Airtran Airways from $55 one way
- Westin Hotels, Sheraton Hotels from $49/day
- Universal Studios Orlando Comp. 1 day/2 park pass
- Crown Plaza Hotels, Holiday Inn, Baymont Inns Comfort = Inns, Clarion Hotels, Omni Hotels,
- -MANY MORE 50% off rack Rate
- Hyatt Resorts, Radisson Resorts special FAM Rates
- Avis Car Rental 20% off lowest rate
- Spirit Airlines $120.00 round trip
- (not counting tax and pfc’s)
- for travel agent and companion on same itinerary

This is a very long video presentation, but by 3 minutes and 45 seconds the discussion on the perks and discounts is in full swing. The statement the presenter makes is "Just by becoming an RTA you are now and insider." From there, he launches into the FAM opportunities and quite honestly presents them as discounted vacations which they are not!

And here is another presentation along similar lines.

To the suppliers our there that are reading this blog (and I know there are many), is this what you want for representation of your product? Yes, they move some market, but at what cost? Do you not realize that YTB and the other MLM companies are discounting your product without your permission? YOU control the product, but YTB has signed up 136,000 people to date on the promises that they will travel for free or close to it.

Does Carnival tell its employees that they can take a 50% discount at WalMart? Does Collette Vacations market their product and offer a discount on Hallmark Cards? Do Apple Vacations, NCL, and the others dictate the level of discounts for OTHER companies? Hell no! So why are you allowing it now?

You can offer the perks and benefits--but that is all they are. YTB is selling them as if they are a guarantee. And when you offer them, you are setting a really dangerous precedent. I cannot tell my clients to call you direct and get a 50% discount. Why are the rules different?

You guys are paying top commissions and your "agent" is selling your perks. So, I ask the following vendors (with their commission levels)...is it worth it to you?
Carnival (16)
Costa (14)
Crystal (13) (and I am absolutely stunned to see Crystal on this based on their rebating/solicitation policy)
Cunard (13)
Disney (15)
Holland America (16)
NCL (16)
Princess (15)
Contiki (10)
Insight (10)
Trafalgar (10)
Apple (14) (are they at least a Platinum Apple Agency?)
Collette (10)
Rockwell (13)
Travel Impressions (15)

Well?

Who's Pulling My Leg? CLIA? or YTB?

In this crazy saga of MLM and travel, it becomes very hard to know who is telling the truth. When I first published my column on MSNBC.com I was informed by a RTA that I was not aware of the following "facts":

We also booked 280,000 in bookings with Carnival Cruise Lines...We also FYI have CLIA department with people who are from CLIA, along with Carnival, and Hotels.com, right in our corporate office, so if we were at all a scam why are we affiliated with those companies,a nd why would they do business with us? By the way beginning September 1, 07 every state will have to have 1500.00 in bookings to get the ytb IATAN card, and 2500 in bookings to get the CLIA card from the cruise line international association, which is the one I have, and you MUST take an exam.

Well, being in the industry for over a decade myself, I became a little jealous that CLIA, Carnival and Hotels.com all were placing employees in the YTB headquarters. I paid my dues, I sold Carnival, why was I not offered the opportunity to have representatives in my office?

But I sent an email off to the three and CLIA responded:

from XXXXXXX@cruising.org
to john@jvegroup.net,
cc Shelly CoppersmithXXXX@ytb.com,
XXXXXXXXretailtravel@yahoo.com,
Bob Sharak XXXX@cruising.org,
date Aug 17, 2007 9:10 AM
subject FW: YTB


John,
We have no onsite CLIA paid employees at YTB, or another agency for that matter.
Thank you.
Gaye Stewart-Loudis
Cruise Lines International Association
CLIA
Director of Membership
910 SE 17th Street
Ft. Lauderdale, FL 33316-2968
754.224.2205 phone
754.224.2252 fax
XXXX@cruising.org
www.cruising.org

Well, since I had gone to the horse's mouth, I took a respected association in the travel industry's word. I chose not to address the 280,000 bookings with Carnival or the special deal they apparently had with IATAN for a $1500.00 annual commission requirement.

But now again, almost 5 months later, I see the following post as a comment to my blog:

Proud to be YTB has left a new comment on your post "Some Astonishing Comments and Revelations":

CLIA does have an office with CLIA representatives in YTB HQ (as well as other agencies). These people handle any CLIA questions regarding the card travel, training or anything associated with it. This includes overseeing that all CLIA card requests are channeled properly from YTB HQ to CLIA HQ. The reps at YTB HQ do not issue the CLIA cards themselves.

So now, what? This is two separate people telling me that CLIA has employees at YTB? Maybe someone reading this blog might be able to get someone from CLIA to post a comment to set the record straight. Or maybe it might be better coming from YTB so they can let us know exactly which associations and vendors maintain offices in their headquarters.

Inquiring minds want to know!

The YTB Recruitment Recap (Attention Travel Suppliers)

So, at the urging of the folks that disagree with the position of this blog and the petition, I went to experience the essence of MLM with a YTB informational meeting. Nothing was said that changed my mind; but plenty was said to support my position.

The message at my meeting was extremely clear. YTB is about recruiting. It is about taking advantage of the travel perks that the suppliers extend to people that are actively engaged in marketing travel. It is about signing up for a credential before the rules change in a few weeks. It is about recruiting as many people under you to be able to earn off of their contributions. In the scope of things, minimal travel is sold. The financial reports to the SEC support this. The goal (although certainly unwritten) is to recruit enough individuals to perpetuate the program. The hook is travel perks and discounts.

When the YTB Level 3 Director (please be mindful that this is not just an RTA speaking but someone that is fairly high up in the organization) was discussing the perks, FAMS, and discounted travel, there was a slide showing all the different vendors that offer those perks to YTB. I wanted to make sure that the vendors are aware that their perks are being presented in such a light.

STEP RIGHT UP AND SELECT YOUR FAM! ALL FOR $449.95 and $49.95 PER MONTH!
CHOOSE FROM THESE 53 SUPPLIERS!!!!!

Windstar Cruises
Crystal Cruises
Princess Cruises
Adam's Mark Hotels
Ritz Carlton Hotels
Hyatt Hotels
Embassy Suites Hotels
Doubletree Hotels
Disney Cruise Line
Royal Caribbean Cruise Lines
Sheraton Hotels
Homewood Suites Hotels
Holiday Inn Hotels
Peabody Hotels
Four Seasons Hotels & Resorts
Carnival Cruise Lines
Celebrity Cruise Lines
Norwegian Cruise Lines
Harrah's Entertainment
Omni Hotels
Crown Plaza Hotels
Radisson Hotels
Holland America Line
Dollar Rent A Car
Budget
Sandals
Contiki
Trafalgar Tours
Payless Car Rental
Enterprise Car Rental
Thrifty Car Rental
Avis
Apple Vacations
Club Med
Insight Vacations
Alamo
Hertz
National
Delta Airlines
Grand Lido Resorts
SuperClubs
Breezes
Hawaiian Airlines
British Airways
KLM
American Airlines
Virgin Atlantic
United Airlines
Air France
Air Jamaica
America West Airlines
Alaska Airlines
AirTran

Below is the slide in question:

Some Astonishing Comments and Revelations

As a continuation of my previous post, here are some of the comments which were made at the meeting on Thursday night. As you will see, it is all about recruiting. Please keep in mind that there was a lot more said; this is just what I took note of that was particularly remarkable to me. My comments are in parenthesis and italics after each comment. These comments are from notes they are NOT transcribed, so if a word or two is missing, I apologize, but the intent and message is accurate.

• After 2001, 200,000 brick and mortar agencies went out of business because people were afraid to travel. (There were not 200K agencies in the heyday. This is blatantly false.)

• 85% of travel is now booked on the Internet and not with traditional agents. (This is up for dispute. I believe 85% of airline tickets may be booked online. I believe 85% of people may research online, but when several studies indicate that only 64% of the households in the US have computers, I find that 85% number a bit hard to swallow.)
• This opportunity is 2 businesses inside of 1.(While they do say you can do one, the other or both, this evening it was presented as having to do both.)
• The travel commission was explained very well; but he alluded that airlines were commissionable. (The “commission” is a service fee attached to the airline ticket, essentially making it more expensive than Travelocity, since they tack on their own fee.)
• In 3-5 years it will be unfashionable to not have your own online booking engine. (I just thought this was an amusing line. It was repeated several times throughout the night and at one point he suggested that each member of the family would have their own YTB booking engine. Again, once everyone has their own, where does the revenue come from?)
• I joined because I could cruise for $40 a day. I wanted to travel wholesale. (This is critical. Here is a Director admitting what the hook was for him.)
• There are three reasons people join YTB—save money on travel, save money on taxes, or make money selling travel stores. (Nowhere does he mention anything about clients or selling travel. It is about saving on personal travel, tax advantages, or earning money on the recruitment end.)
• YTB is publicly traded and that means you do not need to do any investigating—the SEC does it all for you so you know they are legit. (This was probably the most frightening comment of the night.)
• Coach, Scott and Kim are equivalent today to what Walt Disney, Bill Gates, and Sam Walton were yesterday. (Well, maybe this was the most frightening.)
• This is a perfect opportunity for college students. (I thought this was very interesting. He is probably right. I suspect that a college student can come up with $500 and would likely do very well. Very interesting.)
• 7 Trillion spent on travel. Will double in 3 years because of baby boomers. (Again, the number may be in dispute, but he did reason this shift and I thought it was pretty decent as well. He said we have been following the baby boomers since birth. Gerber Baby food—mom does not need to chop up food, GI Joes and other toys that were pre packaged, Mini-vans for the convenience, and finally the housing market, now it is about travel since they are retiring. Not a bad way to look at the market in general.)
• FAM trips are a great way to show your family the world. As an “agent” it is my duty to “inspect” the properties I go to. (I was so insulted by this comment. Bringing family on FAM trips is what will get them eliminated. Obviously from this comment, it is a farce. I placed the quotation marks because he used the quote marks motion in his speech.)
• His brother wanted a hotel not on the site. He told him to go to the site and pick a similar one out of the 55,000 he had on there. Said he ended up at the Royal Hawaiian on Maui. (This is very interesting, his family wanted a specific hotel and the level of service was to tell him to go back and pick something else. I also realized that I needed to get to Hawaii more often. I was unaware that the Royal Hawaiian had relocated.)
• The compensation plan was brushed over, but demonstrated with examples later in the presentation. (The plan was shown with examples later; the slides were sped though to get to more discussion of the FAM trips.)
• More FAM talks, wife and family tested a FAM for a Tour Company that took them to Europe for $899—Paris Amsterdam, Brussels. (He claimed that this was a special trip for 20 YTB RTAs in his team and their families. IS it a true FAM? Who knows. But he did say that the price was $899 for an undetermined amount of time and included air. He did not state that it was per person. Again, just a little bit of misdirection.)
• Travel companies offer FAMS because they want you to recommend their products to your customers, so they bring you in and treat you royally. (This was particularly interesting as he is aware of why FAMS exist, has no problem taking advantage of the opportunity, but as was demonstrated with his brother, has no desire to really interact with his “clients” at any level. So how exactly does an RTA go about recommending and advising a client based on a FAM trip that they have taken?)
• This RTA Card is more valuable than any CLIA or IATAN card. Each day more and more vendors are making the decision to deal exclusively with YTB and will not accept those other cards. (WOW, talk about spin control. It seems that this indicates that any hope for reinstatement with IATAN is out the window. I am surprised CLIA was included here as well. Is CLIA beginning to take a look? And as for the statement itself; well, I will let it stand on it’s own merits—or lack thereof.)
• Be sure to sign up before the end of the year, because on January 1, there will be a requirement to sell travel to get your RTA card. Right now, you don’t need to sell a thing to get the benefits. (Once again, proof positive that this is not about selling travel. It is about the perks. Sign up now so you can get the perks without doing anything? Heaven forbid that you might have to actually sell something so you had best act now.)
• Had a meeting with Coach a few weeks ago and he does not want to do business with anyone that that is willing to do business with anyone else other than YTB. (This is a ballsy comment. So, is Coach now going to tell Carnival that unless they eliminate all other supply sources they will no longer sell their cruise line? How ridiculous is this. Now I can see that many vendors decide to NOT do business with YTB and the ones that are willing to work with them may be a sole source. But I suspect those vendors will be very small vendors that see the attraction of 136,000 RTAs and sketchy foreign entities—not a good place for the consumer.)
• Tax advantages are clear. Write off your internet bills, phone bills, cars, computers, business expenses and as long as you have The Travel Channel, you can write off your cable because as a travel agent this is your “research and development”. You can even write off your mortgage or rent because you are operating a business in your home. (He used his quote mark gesture again here. There are advantages to a home based business, but I am quite sure they are not to the extent displayed here. He did not mention checking with a tax advisor which I thought was odd.)
• We send out weekly emails to your clients, so all you need to do to build your business is give YTB marketing a copy of all the email addresses you have and they will send the newsletter. (Uhm, this is illegal. You need to have people opted in and you cannot just provide a list of names and spam them. I mean you CAN do it but it is illegal.)
• Once you recruit 6 people, your $49.95 monthly fee is waived. The one time set up is $449.95 and if you do it tonight, your site will be up and running before you get home. It takes 7 to 10 seconds to set up depending on who’s doing the typing at the home office. (The focus here? Recruitment! Getting back your $49,95 fee and having a completely free business. I laughed at the 7-10 second comment, I thought that was really funny.)
• The key to the compensation plan is that you make 50% off of all of your people’s earnings. I have one guy that I make $7K -$10K a month from. And that is just one guy and not counting my own stuff. (Recruitment and a statement of earnings?)
• Even if you hate the business, find six people that love it and live off of their earnings. (This just sounds smarmy to me.)
• I made over a million dollars last year and I am not saying that to impress you but to impress upon you how good this opportunity is. (Recruitment and income statements.)
• The average Level 1 Director is making $20K - $25K a month plus free health insurance and a $2000/month stipend from the home office and a $10,000 bonus.
• The average Level 2 Director is making $40K a month plus free health insurance and a $4000/month stipend from the home office and a $50,000 bonus.
• The average Level 3 Director is getting free health insurance and an $8000/month stipend from the home office and a $100,000 bonus.
• The average Level 4 Director is getting free health insurance and a $12,000/month stipend from the home office and a $250,000 bonus.
• The average Level 5 Director is getting free health insurance and a $15,000/month stipend from the home office and a $100,000,000 bonus. (All income statements that some claim are illegal to make. They are interesting and he did not give monthly commissions beyond Level 2. Now are these legitimate numbers? Anyone’s guess.)
• And while I was in Europe, they just announced that they just created a Level 7 Director for Ron Head and they will announce the benefits for that level later. I can’t even imagine.
• Success From Home. This is a magazine that has featured YTB twice. It has a 8 month waiting list to be even considered and we have been picked twice in a year to be featured. If you ever needed to know about how credible YTB is, make sure you read this magazine. (A paid endorsement does not certify credibility. Michael Vick’s mom says he is a nice boy. A Federal Court felt otherwise.)

The presentation was very professional. There was no high-pressure “time share” sales tactics. I never felt that I could not get up and leave at any time, so that is great. I am disappointed (yet not surprised) that there was literally ZERO focus on selling travel.

I hope that suppliers are reading this post in particular. I think it demonstrates the level of commitment that some people in YTB have to you and your products. Something needs to be done!

John Goes To A YTB Meeting

Well, many folks have encouraged me to attend a YTB meeting just so I know what the “real deal” is all about. Most of these folks are YTB people already in the program and insistent that without that experience, my opinions are worthless. So let’s toss that theory right out now. I have been and here are my opinions on the meeting.

The meeting was Thursday evening December 13^th in Columbia, Maryland at the Hilton Garden Inn. The hosts were Marcus & Barbara Board and Greg & Carly (did not catch the last name). The main presentation was done by a Level 3 Director names Donald Bradley who apparently flew in from Atlanta for the presentation.

There were 22 people there which included the 5 presenters 13 RTAs. So, there were only 4 people new to YTB. The room was obviously stacked. This became obvious when the presenter would ask a rhetorical question “Now doesn’t this sound like a good plan?”, and the 13 RTAs and the remaining 4 presenters would all shout out their agreement in unison. Also when Donald Bradley was being introduced, in the middle of the introduction as they were going over his achievements, there were cheers, etc. It was obvious that a great deal of the evening was orchestrated.

The PowerPoint presentation was the same presentation I have seen at many websites. It was actually pretty old since it did include RCI and their brands as suppliers.

Donald was a great speaker and very persuasive. You can check out his website which is very well done at www.the3ceosonline.com.

I was not able to ask any questions. The room was so loaded with obvious YTB RTAs and Reps. For all I know they all were with YTB as they all seemed VERY friendly with one another and my friend and I were the only two guests. There was no charge for us, but RTAs needed to pay $10. I am guessing the idea is to either have the RTA bring people in and allow the Director to “close them”, or expose the RTAs to the MLM side of the business in hopes of signing them up for the other side.

I am composing my notes and some comments on the information presented, and will post it in a future post. I will say that there was very little information that was new to me. What surprised me was some of the anecdotes and comments. And not surprisingly, the meeting was nothing about travel---all about perks, benefits, and recruiting! I think attendance at these meetings ought to be required of all suppliers!

Pay No Attention To The Little Man Behind The Curtain!

Here is an update on the growth of YTB from Coach and Scott. I am not sure when it was recorded, but with the references to the holidays, I assume it is very recent. Just a few observations I noticed and wanted to point out.

1. I did not count the number of times, but I believe the word "travel" was only uttered once. At about 2:50 when Scott says. "..yes, we book a bot of travel, but..." and then continues on about how the strength is in recruiting more people to buy travel agencies.
2. The entire 5 minutes was about recruiting--not selling travel, yet the big "T" in the logo was right between the two of them.--your TRAVEL biz. But you don't hear too much about that do you?
3. I felt that the whole presentation was from a defensive position. Yes, they are recruiting and getting more people to join the ranks, but I wonder what the attrition rate is now. I suspect this is a number that is VERY difficult to obtain. Just from the attitude in this video, I have to think it must be substantial. It was repeated over and over that "everything is ok". Well, Captain Edward John Smith also said that as well.

I watched this several times this morning and I kept thinking to myself that it is eerily similar to that turning point in the Wizard of Oz when the "wizard" is uncloaked to reveal that he is not all that he was made out to be.

PAY NO ATTENTION TO THE LITTLE MAN BEHIND THE CURTAIN!

And I think that there is a line in there that is also very apropos as well:

DOROTHY: ...you're a very bad man!

WIZARD: Oh, no, my dear -- I'm -- I'm a
very good man. I'm just a very bad Wizard.

An Interesting Comparison

In this afternoon's Travel Trade email blast, there was a report about Signature Travel Network. Here is what is said: (emphasis is mine)

Signature Travel Network, continuing to grow in size and geographical spread, reached $3 billion in annual sales in 2007. Signature president Michelle Morgan, speaking at the cooperative's annual sales meeting in Las Vegas, said the consortium added more than 20 members since its meeting in January and through acquisitions its largest members added another 20 locations. The result is a sales powerhouse of 177 agencies and 310 locations across the U.S. and a clientele around the world.

OK, making some assumptions here, but if each of the 310 locations employed 6 selling agents...that would be 1,860 agents responsible for $3 billion in travel sales. That works out to $1.6 million per agent! Kudos to Michelle and everyone in the Signature Travel Network--take a bow--you deserve it! You exemplify exactly what a real agent is!

And in this corner... let's look at the powerhouse YTB. On track to be the largest agency in the world that cannot sell the #2 cruise line and has been shown the door by IATAN. They have 136,000 agents (almost t75 times the number that Signature has) and they managed to sell $226 million dollars (which is 13 times LESS than Signature and is still in my mind a fictitious number). That works out to $1662 per "agent".

Wow, quite a difference! It can't be that far apart! Can it?

To the suppliers....how many FAMS, discounted travel and so forth did you supply to Signature members over the past year? How many were supplied to YTB? I am guessing a lot less to Signature.

FAMS are all about experiencing a product to encourage sales. I would venture to say your investment in FAMS for signature paid off pretty handsomely. How did it do for YTB? Is there a supplier out there willing to come out of the closet and answer?

Success From Home!

"Success From Home" is a magazine that featured YTB last year and it appears that they will be featured yet again in January 2008. From a YTB Website:

The proven success of YTB Travel is being featured again in the January 2008 issue of "Success from Home" magazine. This opportunity is so powerful that the editor dedicated the entire magazine to highlight Your Travel Biz! YTB is so confident about this opportunity that they now offer a $6,000 guarantee! That's right! By successfully participating in the magazine program you are now guaranteed a minimum income of $6,000. It could only take a few hours per week! For specific details on this incredible offer please fill out our form to receive your FREE Copy!

The Next Step? We will send you a FREE DVD Presentation and personally explain this opportunity to you in detail. There is no obligation so please do not hesitate! Once you see this amazing opportunity and decide to become a part of our YTB network, we will provide & assist you with the materials and support listed above.

While this seems laudable on the surface and I realize it applies to the Rep side of the business; I have to ask if YTB will be indicating that this is a paid endorsement? So, has the success really been proven again to earn the cover position? Or has the check cleared the bank again? Yes, that is right. Please see the following from the publisher of "Success At Home":

Success from Home and
Your Business at Home
Success from Home and Your Business at Home are designed to be powerful recruiting and sales tools for the network marketer. They feature your company and your distributors, complemented by powerful third-party content from best-selling authors and experts
http://www.videoplus.com/magdetails.php

Contact info can be found here: http://www.videoplus.com/contact2.php#pub

Now of course anything in the magazine is going to have a pro YTB slant--after all that is why they paid the money to have it created. But I question the integrity of the magazine (not so much YTB) for distributing this as a paid periodical that does not clearly indicate that it is entirely sponsored by the advertisers. Will there be any realistic angles presented? Or will it be the same success stories from the highest squatters on the pyramid again?

As to the $6000 guarantee, well that is a topic for another day.

A Blog Update And A Request For Help

There have been a bunch of recent comments regarding rogue travel agents. I am not denying that they exist and never have. It is really not even the issue at hand and the only way YTB was brought into the fray, was when a rogue YTB agent apparently scammed a Baltimore group. So, there is really no need to continue to post these snippets which are typically old news, undocumented, and in some cases totally irrelevant--several were arrests for something completely unrelated to travel and the story just said that the person was employed as a travel agent.

With that said, I would like to ask all of the reasonable YTB folks out there to continue the dialogue. As I have said, I think both sides have learned from it. I know I have and I am sure Doug has as well. In response to some comments from the rogue YTB folks, I considered implementing moderation to the blog. But, as soon as I did that, I would be accused of censoring (if I did or didn't) so I have decided to allow it to remain uncensored. I would appreciate it if the responsible YTB and MLM folks would use a screen name--no need to register, it is just that "anonymous" is cowardly, too easy and used by too many.

My request to you is to see if you can control yourselves. We are debating an issue here and there are hot opinions on both sides of the issue. I have heard of threats, I have received threats, ominous incessant emails, etc. Is it really necessary.

It just came to my attention that the following "press release" was posted on a free press release site. It was subsequently removed but again, I encourage you to police yourself. Coach--is this the caliber of representative you employ? It has come to my attention that this person may indeed not be controllable as he is not the YTB Rep or RTA but the company belongs to his girlfriend. Is his girlfriend in agreement with the tactics?

YTB Rep Applauds Companies Decision To Launch Suits Against Slammers & Scammers

For_Immediate_Release:

United States of America (Press Release) December 3, 2007 -- For Immediate Release, SF, CA. Dec. 3rd, 2007 All Media Release

Finally news is circulating among reps that YTB has had enough and is taking action against it's distracters. Travel columinst like John Freneye, Jr. and competitors like Mark Ewing, travel club promotor for Real Vacation Careers, CMET who generates business for his product by using a YTB scam logo on YouTube, may find these tactics will begin to be highly costly to them in the future.

Al Boek,Gm for RobertsResorts.Net a YTB affilate, applauded the action, "It's about time these attack and slam sites pay the price for attempting to use the good name of YTB to further their private agendas."

Contact.
Al Boek
alBoek@RobertsResorts.Net


For more information:

7TrillionTravel
PO Box 1570
Anderson, Ca. 96001579
530-378-1363

Earll Allen Boek
Contact author

So there you have it. EAB speaks for YTB RTA's and Reps online. The blog will remain open to all posts without any moderation and hopefully the BS comments will go away and we can get back to discussing the issue at hand.

More Bad Press

From yesterday's Chicago Tribune, another more in depth column talks about YTB.

Just some observations from this side:

When questioned about the 7 trillion dollar travel market, it seemed the response was eerily similar to the claim of travel sales to Travel Weekly, and the recent one day sale:

"It's a number that has been published," said J. Kim Sorensen, president and CEO of YTB Travel Network, when asked about the $7 trillion figure. He wasn't certain of its origin but believed it was from Forrester Research, the Cambridge, Mass-based travel research company.

The journalist discusses the revenue streams. Again, as I have said for a long time, the business is NOT about travel:

The YTB representatives who prosper earn most of their income from the sale of travel Web sites to other agents, not from the sale of travel itself. In 2006, YTB made 72 percent of its revenue from the sale of online travel stores and monthly fees and 15 percent from travel commissions. Another 11 percent comes from the sale of training programs and marketing materials and the rest (less than 2 percent) comes from franchise fees and "other."

He discusses the lucrative earnings when you sell travel through YTB:

Most YTB agents had little or no commission on sales of travel in 2006, according to company documents filed with the SEC. At the end of 2006, YTB reported it had nearly 60,000 registered travel agents. For the year, it paid those agents about $4.9 million in travel commissions, or less than $82 per travel agent.

And he discusses the turnover. This is very interesting as it is a number that is very difficult to obtain:

The turnover at YTB is significant. At the end of 2005, it had about 21,000 registered travel agents. In 2006, it added about 59,000 new ones, but at the end of 2006 it still had only about 60,000, a net gain of about 750 registered travel agents for the year. Nearly 97 percent of its travel agents lasted on average less than one year.

It goes on about an RTA that was laughed when he presented his ID card for a discount, and then needed to wait a year for a refund and had to file a complaint wiht the BBB to do so.

And perhaps in the most interesting sentence, when Sorensen identifies someone in a YTB video as a "REP" who was earning discounts for travel. I thought Reps sold stores and RTAs got the perks:

As recently as Oct. 31, a person whom Sorensen identified as a rep talked on the YTB Web site about getting a $500 a night hotel in Prague, Czech Republic, for $150 using YTB travel agent credentials.

Can MLM And Travel Co-Exist? Just Maybe! (Part 2)

My last post (before distraction) explained where I felt the MLM model had made significant strides towards (for lack of a better word) acceptance in the travel industry. With that said, there is still a lot of work to be done. I believe that the MLM model has seen a tremendous amount of growth--from 60,000 to 130,000 RTAs from YTB alone in a year! I also believe that this growth has not been managed at all. When any company is allowed to grow uncontrolled, it will fail. What I believe is happening is that the MLM model is accelerating the shift from agent sales to B2C sales. By opening up the channel to virtually everyone, there is no choice. Look at the recruiting efforts. If 150,000 recruit 6 people, that is 900,000. If they recruit 6 it is almost 6 million. If they recruit 6 it is 32 million. So you only have 3.5 generations of recruitment before everyone is a RTA. What happens then? NO recruiting, no travel sales, the model collapses. Far fetched? Maybe. Maybe not. So with that in mind, here are some (not all) of the areas where I feel there needs to be significant change on the MLM end.

• Arrogance. This needs to be toned down a bit on all levels. It is great to have goals and benchmarks. But, keep the arrogance in check. I am still not buying $226M in sales. I certainly do not buy $1B in sales for 2008. I have heard about the Pinnacle Award and how YTB received it three years in a row. Vicki Freed told someone at the recent HB show in Las Vegas that she was aware of once. Maybe she is confused. 13,000 cruises? 13,000 passengers? 13,000 certificates? You get the drift.
  
• Professionalism. It is hard to manage 15 people in two offices--just ask me. I cannot imagine managing 150,000 in 150,000 offices. Sure the memo was great, but honestly, YTB ought to look into a compliance person to monitor blogs, presentations, forums, etc. We can be forceful and professional at the same time, but when you read a post from an RTA that says "Lisa got what she f&^king deserved for screwing with us, now she is in charge of the hotels" just screams unprofessional. Set the expectation and enforce it. As a business owner, if I knew that some of my representatives were representing my company like some of the YTBites in these comments---my sales force would go from 150,000 to 10 pretty quickly. You all ought to be thankful anonymous messages are allowed to express your opinions. Too few have the courage like Doug, to stand up for your own thoughts and beliefs. Your cred rating would go up a bunch.
  
• Unified messages. Similar to the professionalism, the MLM needs to control what is put out on the streets. Most people do not understand the compensation program (I think I have most of it--but not all of it) and judging from the different interpretations I have heard, I know that 150,000 don't have it correct. Directors have conflicting on stories. Please be realistic and not offer deceptive messages to the masses. Many leave your meetings feeling they are going to earn 60% of travel booked and a world of free travel awaits for them. I am sure it was stated correctly, but perhaps not as clearly as it could have been.
• Focus. Shift the focus to selling travel and not the downline. Eventually, you are going to run out of people to recruit and then what? If you could refocus the efforts of 150,000 on selling travel, then there might be some legitimacy when you crow about the Pinnacle Award and $226M in sales. Instead of talking about recruiting six people to recruit six to recruit six to recruit six to recruit six...why not recruit six to sell a trip? And speaking of focus...all I have heard in the past few months is that YTB sells travel. Well what is the deal on the cars and flowers? Is this turning into a Market America program? What's next? Self administered colonoscopy kits? Sex toys? (although I hear there is real money in that)
  
• Customers. More of the RTAs need to focus on the customer. The average RTA does not give a rat's ass about customer service. As long as the client goes to the website, the RTA is happy. If the RTA is not interested in selling travel and handling the customer....cut him loose and get rid of the dead wood. The industry is not for everyone--contrary to what may have been presented. A lot of customers feel they are dealing with trained agents--reality demonstrates that the vast majority are not. Customer service is NOT referring the client to the vendor to resolve the problem. At this point, what is in it for the vendor? Not a damned thing. The vendor is paying top commission to someone that merely said book direct. This is screwing the vendor, seriously pissing off the traditional agents, and in the eyes of the client--giving the whole industry a black eye.
  
• The credentials and perks. Regardless of what is in the official talking points, the MLM program utilizes a strong focus on the credentials and perks. First off, for the "traditionalists" they are not that great to begin with. Sure at one time they were but not so much now! When I bought my first agency, I looked for a business where I could make a living for myself and provide a living for my employees. The perks were the last thing on my mind. In over a decade, I have been on one FAM. I say eliminate the in house credentials and let then qualify like everyone else. $5000 for IATAN. Why is there even a need for YTB to issue a "credential"? Amex does not, Carlson Wagonlit does not? The only reason to do so it to take advantage of a grey area when it comes to suppliers. By putting some fancy wording and a photo on a card bearing the word "IATAN/CLIA NUMBER: 123456" lends some false credibility to the RTA. I think this is fraud. And please, stop treating FAMS as low cost vacations. The suppliers expect more. They are learning opportunities. If you want a family vacation, buy it like everyone else does.
  
• Financial focus. The MLM model (and YTB in particular) is very vocal about them not being about recruiting and them being about travel. I wish it were true. The financial reports indicate otherwise--most of the income is derived from recruiting. If it were focused on travel, I would have thought more than 6500 cruises would have been sold in the Carnival sale. Had it been a little more focused on travel, I venture to say that Royal Caribbean and IATAN would not have terminated them. Could YTB recruit more people serious about selling travel if they could claim that the average RTA earned a few thousand a month (rather than the pitiful $60)? I think so!
  

So, what is the solution? I have some ideas. But this post is too long as it is, so stay tuned. Besides, I need to refine them a bit. Part 3 coming soon to a blog near you.

Another Step In The Right Direction?

Not sure if this was an initiative of YTB or on the part of the producer, but it seems that all of Earl Allen's videos have been pulled from YouTube. I am not sure what I will do now for my Sunday morning entertainment, but this is a great step in the right direction.

The industry--MLM or traditional does not need, misleading, amateur, unprofessional YouTube videos out there for the public to see. Fortunately, EAB's videos had very little play time on the net, so the damage was probably not too bad. Now, what about Rufus?

Kudos to YTB if you have taken a stance on YouTube marketing. While it may be a great channel, it certainly needs to be regulated. After all, EAB was communicating your message. Not it was the best choice for a spokesman, but requiring approvals would be a great thing!

Can Directors Read? Comprehend?

NOTE: Part 2 was scheduled to appear here, but this seemed to need addressing first.

I have argued till I am blue in the face with Proud To Be YTB, who claims he is a director for YTB in Florida. Depending on some varying factors, he earns either $30,000 a month, $64,000 a year, or $100,000 a year. One of the comments he made was that the only numbers that matter are the ones in his bank account. I imagine this is the support for your downline that YTB keeps saying is essential to success.

The latest round of foolery centers on a press release about the famously successful one day sale in November. The release and the individual websites directed people to book their cruise on November 9th. It told them that there were two methods--call a special 800 number or contact your RTA. Well, Mr. Proud To Be YTB seems to read the release as not being directed to the "common client". I beg to differ.

How about you read it here and let me know. It is a PDF file.

I am suggesting that Proud To Be YTB take some of his $30K a month and enroll in a Reading is Fundamental program or maybe catch a few episodes of Schoolhouse Rock, because it has become painfully apparent that not only does math confuse him, but comprehension of the English language is also an issue.

From the original thread, here are two of his comments:

The common client could not use this number to book a cruise. The client would have to go through an RTA either by website or in person to book for this sales event.

I'm not talking stupid stuff. These are the facts my friend.

And another one:

That sales e-mail was given to the YTB RTAs... NOT the clients! The clients received a different e-mail which provided the heading of their RTAs websites and told the clients of each RTA to either visit their website or contact their RTA.

That number wasn't for the clients to use on their own.

Can MLM And Travel Co-Exist? Just Maybe! (Part 1)

As Doug Bauknight has said in his blog, he has learned a lot in the past couple of months from the "traditional" side of the fence and I have to admit, I have learned a lot from the "other" side of the fence as well.

I am certainly not willing to say that the MLM model is the best model, or even if it is a workable model (which I believe it is not). After all if the model works or doesn't--that is between the Reps, RTAs and YTB. If it is a bum deal, then they can work it out--we will just keep selling travel.

But I will say that there have been some very positive moves:

• The reduction of the YouTube videos. When they are reported, it seems that they are removed. Very good for the industry--shows some professionalism. Well, at least it does not show the unprofessionalism. But there are still many out there that ought to be taken down--listening EAB?
• The reaction to the RCI announcement. YTB attempted to talk and ran into a brick wall, so they struck out in a partnership with Carnival and tried to sell product. Certainly this is a more admirable retort than building a website against RCI and encouraging members to write flaming letters. If the sale was the success it was intended to be remains to be seen. There are no real accurate numbers out there and to be honest, I am not sure that Carnival and YTB know the correct numbers. But, it did show that YTB can indeed sell travel.
• The slap down by The Coach. The memo about professionalism was huge. I hope that the message can be heard and heeded by 150,000 independent people. And for those that don't heed, it, I hope YTB has the cajones to do something about it.

But there is still a lot of work to be done. While both sides need to come to terms, I feel it is incumbent on the MLM model to adapt to our industry. They are indeed the new kid on the block. Change is good, but do not come into an industry and expect them to adapt to you. You want to change it? Join it first...and then affect change! It is all about compromise.

In my next post, I will talk about what I see as needed to narrow the divide!

The Final Numbers Are In

Well, we have all been waiting with baited breath for the results of the one day sale held nearly a month ago. Apparently the numbers are in and there were 12,000 passengers sold. This equates to about 6,000 cruises. What the press release does not state, is that this was a Carnival promotion and was heavily focused on selling cruise certificates valued at approximately $400.

These certificates are for two people, so the dollar value to this promotion (to the supplier) is in the range of $2.4 million dollars. At a 16% commission, this effort likely earned YTB less than $384,000. Based on the 130,000 Referring Travel Agents that participated, all things being equal, each would have earned 60% of the YTB commission or about $1.77 per Referring Travel Agent.

Here are the first two paragraphs from the release:

YTB International, Inc. , a provider of Internet- based travel booking services for travel agencies and home-based independent representatives in the United States, announced today that it held a successful one-day cruise sales event in November.

During the event, YTB's network of Referring Travel Agents (RTAs) booked more than 12,000 cruise passengers through gift certificates, individual, and group cruises. YTB's efforts marked one of the best single sales days for cruises in the history of the industry.

While this may be an admirable day for YTB and Carnival, I am not so sure it is worthy of all the accolades. Look at the recent WLCN:

A travel agent survey conducted by CLIA reveals that WLCN events, held throughout North America on October 17, are expected to generate a total of 17,852 bookings - which translates into an estimated $22.3 million in sales that will yield more than $3 million in travel agency commissions.

This was produced by 900 agencies at events in their stores on one night. There was a virtual component to this as well and according to CLIA:

Combined, CLIA's 2007 WLCN events and online Virtual WLCN option are estimated by the nearly 4,000 participating agents and agencies to generate a total of as many as 34,654 bookings, $43.3 million in sales and over $5.8 million in travel agency commissions.

So, 4,000 traditional agents produce 34,654 bookings (probably 70,000 passengers) resulting in sales of $43 million and commissions of $5.8million. This seems a bit more successful than 130,000 agents producing 6,000 bookings, resulting in sales of $2.4 million and commissions of $384,000.

Look at it another way, 130,000 Referring Travel Agents had the potential to each earn $1.77 for their efforts. 4,000 Travel Agents had the potential to each earn $1,450. As was mentioned before, this was a Carnival/YTB promotion in response to the RCI announcement to terminate the YTB contract. It is a safe assumption that the YTB average sale was considerably lower than the WLCN average sale--the WLCN focused on all cruise products and not just one product with an entry level price point.

Once again, the numbers are what the numbers are!

YTB Release

CLIA Release

Two Sides To Every Story

Well, it seems the forums are abuzz with the news of a management shift at Royal Caribbean Cruise Lines. Lisa Bauer, the Senior Vice President of Sales, who signed the letter terminating 3 agencies back in October has been moved to Senior Vice President of Hotel Operations.

Most people familiar with the industry and perhaps with Lisa's background see this as a promotion. Maybe a lateral move with a slight upward trend. After all, he background is in resort management. Big resort management. Most companies, when grooming their future leaders will expose them to all the facets of the organization. Most of the people familiar with the industry see this and understand this.

There are others who are less familiar with the industry who feel it is something else. Over the past two days I have heard people explaining what "hotel operations" were on a cruise ship. Here are a few of the ideas:

• She is now in charge of buying the sheets and towels
• She is now in charge of booking your pre and post cruise stays at hotels
• She is now in charge of the Royal Caribbean owned hotels in Alaska

The naiveté of these people is amazing. For those who are blissfully unaware, Hotel Operations encompasses EVERYTHING the guest sees once they step on board the ship except for the actual operation of the vessel. Yes, she is now in charge of the cabin staff, the pursers staff, the cruise staff, the medical staff, the maintenance staff, the shore excursions, the entertainment, the food, the booze, and security. To me this is quite a bit MORE responsibility when you consider it is for the entire fleet.

I also find it is strange that the only people who feel it is a downward move are representatives of the three entities that were terminated by RCI in October.

I have heard all sorts of comments about Lisa's decision to "screw" with this company and so forth. Does anyone really believe that Lisa woke up one morning and decided to head into the office and type up a letter before anyone else got in? Do you really believe that the decision was her's alone? Come on, please get real. The decision was her's alone about as much as the petition had on the decision. Laugh if you will but EAB (who has been pretty low key lately) told me that it was the petition that caused RCI and IATAN to make the decisions. Again, come on!

One thing I will say, is that the timing is odd. Lisa was the fontwoman on a very controversial move. She was names one of the 33 most influential people in travel. She was also named Travel Executive of the Year by Travel Trade and received a very long standing ovation. SO why now? I am pretty sure we will never know. It will be interesting to see what happens now going forward.

My crystal ball: a new SVP of Sales will come on board. He will support past decisions and might even further enhance them. Now if CLIA would only make a statement--but that is a lot less clear in my crystal ball!

A YTB Director Gets Confused

Over the past few posts, I have been accused of not knowing how to read dollars and cents on the financial reports provided to the SEC. Most of the criticism has come from a YTB Director (Level 1) who initially told me she earned $63,000 in travel commissions year to date, and was on target to receive $100,000 in commissions for the year. An aggressive final 30 days if I say so myself!

But wait, apparently it is not me who is confused on the numbers at all.

Proud to eb YTB said...

I stand corrected on the commissions part. I started out by saying sales, and that is what I truely meant. somewhere along the way, I changed it to commissions.

I do apologize for that.

I will no longer talk about my income. john likes to twist it around anyway.

Let me also point out to you that YTB is NOT about screwing over your downline. YTB is about helping your downline build their teams. This is why when someone has a prospect, I help them bring them into the business. The SAME opportunity exists for EVERYONE!!! My downline can become a director like me... just as I can become a level 2, 3, 4... director like those in my upline.

IF YOU WOULD JUST SHUT UP AND GO TO A MEETING, THEN MAYBE YOU WOULD UNDERSTAND THIS BETTER!!!!!

Now I admitted that I was wrong with the sales/commissions issue. Why don't you admit that you were wrong with a lot of the topics you posted... instead of having me prove you are wrong!!!

My travel sales are in the $60K range and my commissions are in the 30K range. That's all I will say about income...

This Director wants me to admit I was wrong in my analysis of the YTB financials. I cannot see where I am wrong. People paid into the program and received less. They lost! This Director now claims that it is not "about screwing over your downline" yet admits that the only numbers that matter are the ones in his bank account. Maybe not an outright screwing, but certainly worthy of a cigarette!

Again, this "director" is now claiming that of her $60K "range" of travel sales, she is earning $30K in commissions. 50%! Well, if that is true, I think YTB needs to make it clear to everyone that you can earn 50% on your travel sales. I missed the memo.

And please Proud to Be YTB, I could care less how much you make (or don't) on bringing people into the program. We are talking about travel here. I have said from day one that you cannot earn a living selling travel in the MLM model. You have proven it resoundingly. You are a hot shot producer (by your own admission) for YTB and have gone from earning $63K in commissions to supposedly $30K in commissions. Which I believe to be blatantly false. If you sold $100,000 in travel sales the commission to YTB would be in the range of $10,000 and your share (because you are a director) would be $7,000. Again, hardly a living.

You tossed out another number of $30K. I think this number may be accurate for your total bottom line with YTB--travel commissions and referral commissions, etc. I will never know or understand, because as you so eloquently (and professionally I might add) pointed out to me:

IF YOU WOULD JUST SHUT UP AND GO TO A MEETING, THEN MAYBE YOU WOULD UNDERSTAND THIS BETTER!!!!!

A YTB Director Speaks

In one comment I mentioned that YTB collected $93 million dollars from their Reps and RTAs over the course of 9 months. I also mentioned that the commissions paid to these same folks only amounted to $64 million. There was a $28 million deficit.

One of the comments made is very telling about what this whole deal is about. Mind you, this person is claiming to be making $36,000 a month in income. Something that was prohibited from disclosing just a few short months ago. This person is also a Director with YTB with a substantial downline of people. I ask those that are in YTB or those that are considering joining, is this the person you want over you? I am sorry for the personal mention, but I feel it is important to demonstrate two things:

1. There is not that much money in the program for most of the people
2. The ones higher up on the pyramid are making money and are happy to do so off the backs of those that just joined. As long as there are people willing to pay $500 and $50 a month, this Director's bank account will continue to be the only number that matters!

Here is the comment as it was posted:

Proud to be YTB said...

I'm making profit john... ME!!! also, there are RTAs and REPs who haven't done that much yet... but they will get there. Remember... there are new people joining every day. each person moves at their own pace. this is why those numbers you are showing really don't mean much. the numbers that do matter to me are the ones in my bank account.

So, now what is this business REALLY about?

(Note: someone wanted to know where it was originally posted. It is the 20th comment located here. And if anyone knows Blogger, comments cannot be edited, I can delete them, but not edit them)

Selective Reading?

I was just looking over this blog and discovered a very glaring trend. It seems that when facts and figures are posted, there are very few comments. But when opinion is stated, they fly out the door. Could it be that when presented with facts, figures, and citations that there really is nothing to say?

• Rufus, his boogers and YTB
• Tony tell us about $100K a month income
• Exaggerations from the beginning
• Consumer fraud in the US
• More exaggerations and misinformation
• Math help part 1
• More perks, less travel
• Math help, part 2
• Speaking of exaggerated claims (TraverUs)
• The MLM attitude emerges
• IATAN gives 4 agencies the boot
• A different view of the math
• YTB contracts exposed

But boy, let me toss out an opinion and watch out. These all had more than 30 comments each:

• Thoughts on the issue at hand
• For a complete change of pace (stock questions)
• An AHA moment

What does one glean from this? It seems to me that when it is commentary, people will attack and be loud and clear with anything they feel to be "fact". But when true fact is presented, it becomes painfully obvious that the commenter is incapable of defending his or her "factual" position. Brings to mind the axiom "Let the facts speak for themselves".

PS. This was a fun post to do--I really like Rufus and his boogers. Always gives me a chuckle!