YTB Contracts

The woman in the post below faxed me the contracts and it seems simple enough to get out to me. The contract, as expected, exonerated YTB of pretty much any and everything. They do tell everyone that they need to comply with any and all local laws--so they are good.

The one thing that bothered me was that any customers that register on the site or book travel belong solely to YTB. I guess since the RTA is merely referring customers, they belong to the agency, but then again, most of the RTAs that have been commenting swear that they are an agent. And as an agent, I would be damned if I would give up my client list like that.

And totally unrelated, I find it odd that there were not any more comments on post regarding looking at the YTB money trail from a different point of view! Perhaps there is nothing that can be refuted?

A Disgruntled MLMer Emails Me

I just received an email asking how someone could get out of the MLM agreement as they keep charging her credit card. I asked her a few questions about the contract and this was her response:

I started in October with the first payment of $499.90 which included the first monthly payment of the $49.95 monthly fees.

They have charged my card for November and of course soon December. I paid a $149.00 RTA Certification Seminar fee. This seminar was cancelled because their IATA license has been suspended. So I've been requesting them to refund this amount since the day of the actual seminar which was on Saturday, November 17th, 2007. As of today's date they tell me they will, but as of yesterday when I contacted Chase they had not given me a refund.

My partner and I like to travel frequently and I figured we'd get discounts to really nice places, but unfortunately to date have not been able to go anywhere yet due to personal reasons. However, my ONLY priority for joining was to get an IATA number and ID card as a certified RTA (Referring Travel Agent) to travel at discounted rates.

RIght now all I want is to get my money back. I have sent them letters and are awaiting their response.

Will keep you posted and will fax you both contracts for your information.

I really love to travel and have traveled a bit. Before this, I looked in local colleges and in the internet on how to become a "REAL" travel agent, however, found there to be no real information. So if you have any real information for me, I'd like to check it out. Again it's really to be able to go to nicer locations and far away places at discounted prices. Isn't this what we all want after all???

Best regards,
(Name Withheld by JWF)

A Different View

I will not take credit for this angle--I got it from another forum. However, I did think that it was a good way to look at the YTB program for their RTAs and the compensation plan in particular.

From YTB's financial reports reflecting the first 9 months of the year 2007.

On the income side:

1. Online travel stores and monthly fees $ 69,031,218 (paid by RTAs)
2. Training programs and marketing materials $10,364,547 (paid by RTAs)
3. Travel commissions and services $ 13,930,824 (paid by the travel suppliers)

And on the expense side:

1. Travel commissions $ 9,398,036 (paid to the RTAs)
2. Marketing commissions $ 55,370,759 (paid to the Reps)

OK, now I have all the standard answers:

• You don't know the system
• You can't look at it like that
• You have to join to know about it
• We can't tell you the real numbers because the FTC will get us
• Some RTAs are also Reps
• Etc.

But, there are 120,948 RTAs who collectively paid YTB $69 million dollars in the past 9 months. In return for this investment, they received $9.4 million dollars in commissions.

There is no way to determine who is a double dipper in the RTA/Rep bucket, so let's look collectively and call the two groups one.

Collectively, the group has paid into the YTB coffers $70.4 million dollars. This represents the sign ups, monthly fees, and training. This is an average of $582.03 per person or $64.67 per month.

Collectively, the group has taken out of the YTB coffers $64.8 million dollars. This represents marketing commissions paid (Reps) and travel commissions paid (RTAs). This is an average of $535.50 per person or $59.50 per month.

Now I know we are not talking a lot per person, but collectively it is huge, and precisely why I claim that this program will never work and is destined to fail. The average person in YTB over the past 9 months LOST $46.53. That is $5.17 cents a month.

No one would ever think of suing for this amount. More likely, this is something that would be brushed under the rug as an embarrassing mistake. Certainly no court in the land will accept a case where the plaintiff is suing for $46.53.

The program is flawed. When operating a business--any business, money in, less money out equals your profit or loss. Successful businesses will have profits, unsuccessful ones will have losses. The way I see it, out of 120, 949 businesses all but one suffered a loss. And the one that was able to make a profit, made it to the tune of $2.1 Million Dollars--and that company was called YTB.

You can crunch the numbers all you want at the SEC Filing

I also have to question the nearly $2M in salary taken by the top 5 executives at the company for an average of $377K per year. I do not fault anyone taking a large salary for running a business, but I do fault them when in 9 months they each pocket $282,750 and the 120,948 people that are building this business are losing $46.53. It might make for an interesting Excel graph.

Just A Few Comments On The Competition

While this blog is about MLMs, YTB has taken the brunt of the conversation. No doubt about that. Why? Well, they are publicly traded for one--and their info is out there for all to see--the good and the bad. Number two, their RTAs tend to be very loyal and (in my opinion) overly trusting of what they are told. It is the "he said it so it must be true" mentality that prevents them from addressing any reasonable objections or concerns. That is their own cross to bear. I still think YTB is a bad investment and stand by my assertions that very few make any money in the program. Time and time again, no one has provided any reasonable proof of making any money despite the factual figures provided by YTB that prove my point. I also think I have to be onto something here when major suppliers and industry credentialing associations are terminating them. So it is not just me!

What I find amusing is the circling of the vultures. TraverUs is the lead vulture and they are out in full force recruiting the scared RTAs. Of course this is a warm market--most pyramid participants will participate in many. And TraverUs is most certainly a card mill as well. Although they will not admit it (after all the YTB folk now know that "card mill" is a bad word). They feign compassion for the loss of IATAN and RCI. Check out this excerpt from a blog:

Hi Friends,I wanted to express that I am sorry for YTB losing their IATAN #. It truly hurts any industry when something like that happens. And no matter whether they are a competitor to TraVerus I wouldn't wish ill on anyone's business. I wish you well in any venture you choose!Maybe you're at a crossroads as to what you'd like to do with your business and future. I'm sure you were great at what you do.I am with TraVerus and we're growing strong offering an opportunity with a very low investment. If your downline is in a panic you could give them this option to come over with you. If most move together it could cost you or them little or nothing to join.

What a crock, This is the best thing that TraverUs could have hoped for. Now they can easily recruit with very little effort. Why don't they call a spade a spade? Are they really "sorry" about YTB's situation? Hell no.

And you know what, neither am I. I have said from the beginning, the MLM firms operate on the very fringe of legality. All of them. They may change the terminology from pyramid to pyramid but the end result is the same. You will not make any money in selling travel under these programs. Hey TraverUs--do you have anyone that can show me some proof? Doubt it! So please stop with the false platitudes. You are ecstatic that YTB is having their problems. And to probably a lesser degree, I am as well. I think the truth is finally slowly starting to emerge.

TraverUs, please don't think you are any different. You call then CTAs (which I think is intentional deceit) and YTB calls them RTAs. Pretty soon, you will be in the same position claiming IATAN made a mistake, RCI made a mistake, poor TraverUs.

Time will tell. As the big words at the top say MLMs and Travel: A Bad Mix!

Is YTB Beginning To Get It?

A copy of an internal communication from YTB was posted as a comment on this blog and I felt it was important to bring it to the forefront. I applaud YTB for taking this stance. I also would say that it is a shame that it really needed to be said in any event.

This begins to address one of the concerns the "traditional" agents have with the MLM business model. It is progress, but there is a long way to go. Too bad it does not apply to Rufus and Earl from the farm on YouTube. I have said that if I were Coach, Scott and Kim, I would be livid that some of these people are representing "my" product. I think they are beginning to understand.

Like any business that utilizes independent contractors, YTB has no legal right to dictate anything in terms of how they run their business. When they begin to impose rules, the ICs become employees. The only recourse YTB has is to terminate the agreement with an offending RTA. ANd then you have a business decision to make--lose the RTA revenue or turn the other cheek.

Congrats to YTB for making a stand, I hope that you have the desire to enforce it. (This info was copied from a comment on another post. I have no verification if it is authentic, complete or accurate--but I have no reason to doubt it either.)

YTB TRAVEL NETWORK TRADE SHOW GUIDELINES

VERY IMPORTANT: YOU ARE REPRESENTING YTB!

TRAVEL TRADE SHOW ATTENDEES
ARE YOUR PEERS, NOT PROSPECTS.

Travel Trade Shows are non-solicitation events and selling of advertising, products, or services by agent delegates is prohibited.

Spouses or guests are not permitted unless they are a bona fide home-based travel agent. Event management reserves the right to qualify all registrants and allow or prohibit anyone from attending the show who does not fit the travel agent criteria.

Dress code is business casual. No t-shirts are permitted, logo or otherwise. Please do not wear blue jeans or shorts.

Professionalism and ethical behavior is expected of all RTAs attending Travel Trade Show events. No marketing is permitted by agent delegates. Be sure to be respectful of travel suppliers and other attendees. Exhibit a positive attitude towards suppliers and their products. Remember that your behavior is a direct reflection of YTB and any infraction of the above policies may harm YTB and your teammates. Violations will be addressed by YTB Corporate.

Thank you to everyone for your cooperation as we strive to become the largest travel agency in the world!

How About An "Aha Moment"

Lot's of comments on the math challenged post, and I see now that the sales have somehow been upped to a trillion dollars. Maybe YTB ought to just take over the war on terrorism and help out the country.

Let me talk about the REPS and RTAs for a minute. Reps are the guys that are pushing the program and renting the websites out. RTAs are the ones that are renting the websites and telling everyone within three feet of them to go book on their site. They are two separate businesses as YTB likes to remind us and you can do one, the other or both. But I suspect that most do both! There is no real current data available, so I will use the July data provided by YTB. Please keep in mind, all figures are on commissions--not sales.

REP ANALYSIS

It looks like there were a total of 134,147 reps out there (6,910 non power team leaders, and 6,237 power team leaders) The numbers on the sheets include all the bonuses override commissions and YTB has noted that accordingly.

Non Power Team Reps

• 6,910 reps earned a total of $489,522 for an average of $70.84 per rep
• 99.9% of the non power team reps earned less than $1000 in the month of July
• 73.5% of them earned less than $50.00
• One tenth of one percent of them earned between $500 and $1000

Power Team Reps (including overriding commissions and bonuses)

• 6,237 reps earned a total of $6,213,799 for an average of $966.28 per rep
• 77.6% of the power team reps earned less than $1000 in the month of July
• 30.3% of them earned less than $50.00
• 1.5% of them earned over $10,000

So, the lucrid opportunity seems to be within the 1.5% of the people in the program to me. But let's compare this earning to the RTA earnings. And then we can discuss where the money is to be made in this business. I will again say that it is in the recruitment--and even then, it is not all that!

RTA ANALYSIS

It looks like there were a total of 106,102RTAs out there.

July Earnings

• 17,644 RTAs earned an average of $57.05 for the month (based on commissions of $1,006,512)
  
• 83.4% of the RTAs did not earn a penny
  
• 16.6% of them earned something but the average was $57.05
  

Future Earnings

• 32,720 RTAs can look forward to an average paycheck of $60.93 for their future bookings (based on commissions of $1,966244)
  
• 69.2% of the RTAs can look forward to receiving a check for nothing
  

Now, for a moment, let's assume that we have an average superstar in YTB. He or she is far enough along in the pyramid to be a Rep and an RTA and is earning off of both programs. But in the realm of superstardom, he or she is average. Not a Tom Cruise or Brad Pitt, but a solid Vince Vaughan.

Mr. Average Superstar, on the Rep side, pulled in $996.28 in commission and bonuses for the month of July. These include the override commissions and the dream bonuses as well. But knowing how well travel can pay too, he also performed well on the RTA side. For his efforts, he was rewarded with a check for $57.05.

$996.28 (Rep Compensation)
+$57.05 (RTA Compensation)
$1053.33 TOTAL COMPENSATION FOR JULY 2007

Let's annualize that for a minute and assume all months are equal. That is $12,639.96 (EBIT) in earnings from BOTH programs for a full year. $6.07 per hour!

So where is the opportunity? In the hope that the company will be around for you when it is your turn to sit on the top of the pyramid? How are they moving so forward when at every turn there is another large obstacle in their way. Downplay the IATAN and RCI move all you want. They are big players.

I have the feeling I can provide numbers all day long and the responses will be nothing more than "we will see" and "you are wrong".

So, here it is, I have laid out the income for the average superstar with YTB and to me it looks pretty paltry. I have asked time and time again for someone to provide some convincing proof of earnings but no one has taken me up on it. I wonder why?

For The Math Challenged

I am not sure if I am not explaining it correctly, but my point is that YTB is not making their money off of travel. It is off selling the websites and collecting monthly fees. One YTB RTA has claimed that YTB has sold over a billion in travel. Maybe over their life, but not in recent memory and certainly not this year.

Allow me to quote her latest rant in the comment section and then I will explain my position:

Proud to be YTB said...

And where do you think they got the milliond in commissions from travel in their earnings report??? if the company YTB is earning 16% from cruises, and less percentage for total sale of other bookings... then yes, YTB made billions in travel sales to earn those millions! DUH!!!!! it doesn't take a rocket scientist to figure out that total sales is NOT equal to total earnings... especially for a travel company! The vendors get paid too!!!

Line #3 says it all!!! "TRAVEL COMMISSIONS" NOT "TRAVEL SALES" Two different things there pal!!!

I thought I was dealing with smart people here? Again I disprove what you say!!!

Also, you just backed up my statement with what you replied about FAM trips... and I quote...
"I said suppliers could correct the issue and restrict to whom they offer discounts or FAMS. It is easy--give the perks to those that deserve them--not someone that tries to buy their way into the program."

In a nutshell, you agree that it is the vendors who issue the FAM trips, so it's the VENDORS fault! YTB is NOT to blame!!! The vendors could restrict or halt the issuing of FAM trips to a specific company!!!

Shot... SCORE!!! Hahahahaha!!!

OK, so now let's take a look at their most recent earnings report filed with the SEC.

For 3Q 2007

• Total Revenue: $39,869,242
• Online travel stores and monthly fees: $28,691,270 (72% of their revenue)
• Travel commissions: $5,536,399 (13.9% of their revenue)*
• Training programs and marketing materials: $3,651,184 (9.2% of their revenues)
• Other: $1,990,389 (5% of their revenues)

For YTD in 2007

• Total Revenue: $95,918,855
• Online travel stores and monthly fees: $69,831,218 (72.8% of their revenue)
• Travel commissions: $13,930,824 (14.5% of their revenue)*
• Training programs and marketing materials: $10,364,547 (10.8% of their revenues)
• Other: $2,592,266 (2.7% of their revenues)

So, where does the bulk of YTB's income come from? Signing on new RTAs. Why can't Proud to be YTB see this? Am I missing something?

Now there was an asterisk (*) next to travel commissions up there. This is the total amount that YTB received on behalf of all travel sales. The commissions paid out to the RTAs are an expense and not reflected here. It has been said that across the board, YTB earns 8.2% commission. This is when you figure in some of the higher producing commissions like Carnival at 16%, and some lower ones like airline ticket at $6.00 per transaction. To make it easy, can we agree to call it 10%?

If YTB has earned $13,930,824 in commissions (which is a great number for an agency, but a pretty crappy one for an agency with almost 150,000 agents), they would have sold $139,930,824 in travel this year to date. Seems like it is $861K shy of a billion. For argument's sake, let's use 16% commission--that means that they would have sold $84,600,000 in travel--oops that is further away from a billion. Maybe that 8.2% was closer. Let me check...oops, that shows they wold have sold $170,000,000. Wait, I know, they actually sold $1,000,000,000 and were earning 1.39% commission. Well, which number do you want to use?

And I will drive home a point I have made time and time again, the sales numbers are admirable. I am quite sure they are earning mega-bonuses for your Carnival BDM and other suppliers that do business with YTB and the MLM crowd. But it further emphasizes the fact that you do not sell travel. You are selling websites and collecting fees. Will these numbers stand up to the Burn Lounge sniff test?

In the past quarter, you had 106,000 RTAs (from your July report) and you managed to sell about $55 million in travel product. That is $518.87 per RTA. Those sales, resulted in $5.5 million in commission to YTB which took 40%. This allowed the RTAs to earn $3.3 million or an average of $20.63 (and I rounded up) per RTA for the quarter.

Sales per day per RTA $5.77
Commission per day per RTA .23 (yes, that is 23 cents per day)

Let me put this in perspective. A cup of coffee at McDonalds for a senior citizen is 25 cents. If the RTAs work really hard, Monday through Friday, they will be able to afford something off the "Dollar Menu" on Friday night. But only one thing. ANd only if you live in a state that has a reasonable sales tax!

Quod erat demonstrandum!

Out of Control

Not much else to say... To the YTB folks out there....has this message been approved?

(Note: it appears that EAB is re-recording some of his older posts with the new camera and removing others. So if comments do not make sense, or the videos do not display, you know why)

The Issues Are....

Over the past few days, the comments have taken a turn for the worse. I apologize for that, but I doubt there would be much discourse if I required everyone to register to post a comment. I would appreciate keeping on the issues.

And in case anyone has forgotten, I will lay them out once again and explain my position as to why the MLM model does not fit with travel.

1. The travel suppliers are getting the short end of the stick. From the numbers available, it is evident that the people in the program are not about selling travel. Yet they are big on taking industry discounts and FAM trips. These have a cost to the supplier. When a supplier like Carnival, Royal Caribbean, Globus, Apple Vacations and so forth offer a FAM trip, there is a cost to them. It is a gamble that they will in turn get a ROI by having the agent sell a trip for them. This is not happening. According to a YTB presentation--in September the RTAs earned $1.4M in commissions. This equates roughly to $14M in sales. At 134,000 RTAs, that is $104.47 per RTA. The comeback will be there were not that many when the travel was sold. Legitimate rebuttal. Let's say there were only 12,000 RTAs when the travel was sold. Still only equates to $1166 in sales per month. The MLM TRAs, CTAs, Reps or whatever you want to call them, are selling MINIMAL travel and most likely (as was proven by Steve Perrillo) selling it to themselves.
2. The consumers are getting the short end of the stick as well. Set aside the WBAL-TV issue for a moment--there are rogue people in every industry. But when someone is looking to invest (and a vacation is indeed an investment) in a vacation, they have an expectation. They expect to have as seemless of an experience as possible, have few problems, get a good value for their money, and if possible have an advocate on their side should something not go as planned. Does the MLM model provide this? Absolutely not! The experience is not seemless as there are entirely too many steps to go to to plan the vacation. If a personal opinion is needed, it is rarely accessible, and when it is accessible, the consumer is now dealing with a minimally trained RTA that may not know the difference between Panama City and Panama City. I cannot speak to the problems encountered in the MLM process, but if it is like ALL travel, there are likely to be problems at some point out of the control of the RTA. What is the MLM answer? To call the vendor and hash it out. Again, tha vast majority of RTA websites do not have any contact information on them for YTB or the RTA. Furthermore, the numbers on the RTA site are "insider" numbers for travel agents and are NOT designated for consumers. And value for the money--maybe and maybe not. I venture to say that the pricing is competitive to any other means--but where is the value? Where is someone to advocate for you? Where is someone that can guide you? Where is someone that has invested in years of training? Where is someone that has the experience?
3. Finally, the industry is getting the black eye. YTB is bringin on an average of 500 RTAs per day (according to independent RTA claims). At that rate, in a year, they will have infused more "agents" into the industry than were EVER working in the industry. Talk about diluting the pond. But the issue that stretches across all three issues is here. They have said you can come "from Yale or Jail", "Penn State or the State Pen"--this is true. One man convicted for investment fraud was released from jail and ran right to a travel MLM. In every industry, there must be some sort of professionalism. From where I stand, that is not a requirement to get in the MLM program. Look at YouTube. Attend a trade show and admire the green t-shirts that proclaim "I got here for free. Ask me how." Watch a presentation. Watch them harassing and soliciting clients at resorts and on cruise ships while they are abusing supplier perks. They have single handedly taken a profession and are well on their way to reducing it to the lowest common denominator. And quite honestly, that is frightening.

The entry into travel is alluring to many. It is sexy. It is happy. Everyone likes to do it or talk about doing it. Sort of like sex. It does not require you to maintain an inventory. Traditional MLM programs find inventory, lack of appeal to a mass market, and unsexy products to be a liability. So travel seems like a good fit. But as all of the numbers support--the MLM business in travel is not about travel at all. It is about bringin in more people to rent a website. Travel is the product (and remember why it is appealing) to keep the MLM programs just on the side of being legal. Look at earnings--not dollars but earnings...who earns more in the YTB program? Reps or RTAs? Where does the income come from? Renting sites and selling programs? Or selling travel? The answer is obvious.

If the MLM companies would admit what they are, we would be a long way to solving this dispute. They are not in it for the travel. If the suppliers would realize this, the dispute would be solved entirely.

I have said it before, I can set up an eBay store in a few minutes and I can buy gold rope chain from a distributor. That does not make me a jeweler.

Let's Talk Satisfaction

Has anyone reading this blog ever purchased travel from a YTB website? I am looking for answers for a few questions:

1. How did the charge appear on your credit card statement? The name of the vendor.
   
2. What type of travel was purchased? Air, cruise, land based vacation package?
3. Were you satisfied with the availability of help during and after your transaction?
4. Were you overall satisfied with the experience?
5. Would you book there again?
6. Any other comments?

YTB Stuns The Travel Industry (Starring Earl Allen)

Here Earl Allen talks about me as having fired the first shot. While I am flattered, he is mistaken. Does he really think the petition was the impetus behind the RCI and IATAN decisions? These moves were in the works well before I put up a petition.

I will correct a few wrongs as well. He claims I own Tripso.com which is not true. I write for them and I also am a volunteer administrator on the forums. He says that my petition stated that YTB was "illegal" and that is not true either. You can read it and see for yourself. Finally, he went on about how I edited the comments on the petition. Again, not true. I did delete some names that were obviously false (Mickey Mouse, Donald Duck) and I also deleted "signatures" that did not relate to the cause. You see, what Earl Allen does not get, is that a petition asks for support of an issue. The wording was clear. So it made no sense for someone to sign a document in support of a position and then utilize the comments to essentially negate their signature. If you want to argue, do it on a forum or in a blog. Here is an example of a comment that was deleted:

Hi John, Why are you such a hateful man? I guess you just can't accept change. Industries are changing on a daily basis. YTB gives a chance for people in this country to provide a better life for their familys. Online travel was here before YTB. Brick and mortar Travel Agencies have been shrinking for many years. The world is constantly evolving, Accept it John. I think the bottom line is that you're just mad at the world, and taking it out on MLM, and YTB. I have news for you John, MLM continues to grow at a rate of 150,000 people per day globally, and this will continue to increase. I'm also involved in another MLM that has had over 500,000 people join globally in just 4 months. We YTB RTAs, and all the MLMers in this great big world of ours really do love you John! P.S. Just remember, YOU put yourself in the spotlight. Now we are going to spread the word to the global MLM community about your hateful actions my friend. You will be able to read about yourself, and your hateful ways on the internet. Peace

So, with that type of reaction from the MLM crowd, I do not think I was out of line. There actually is another petition that I did not sign supporting the MLM model.

But enough of my commentary, please enjoy the fourth part of our series.

The World's Largest Travel Agency By 2010

I have read where one MLM travel business is shooting to be the world's largest travel agency by 2010. This firm has only been around a few short years (less than 5 in the travel business really).

At their current rate of growth, it may indeed be a possibility. But, I also have to wonder if an amateur driver can actually pilot a race car in a race. Let's talk about Corporate governance for a minute as I highlight the experience of each officer and director. You can decide if their collective experience enables them to pilot a travel company to be the number one travel company in a few short years.

Directors

1. Former minister, former life insurance salesman
2. Son of a former minister, former life insurance salesman, Certified Financial Planner
3. Former life insurance salesman, friend of former minister
4. Real estate development and management
5. Franchise attorney
6. A CPA
7. A medical doctor that specializes in real estate holdings
8. Another attorney with interests in minor league baseball, car dealerships, and recording labels among others
9. A former professional sports Hall of Fame inductee

Officers

1. Former minister, former life insurance salesman
2. Son of a former minister, former life insurance salesman, Certified Financial Planner
3. Former life insurance salesman, friend of former minister
4. A man with executive management, corporate ops, administration, and marketing skills from an undisclosed company
5. Another man with corporate experience in mergers and acquisitions and financial forecasting

Now, how are these 14 men planning on growing a "travel" business to the largest travel agency without any background in travel--brick and mortar or otherwise? One might think that it makes sense to have some people with travel industry experience in a senior management role--or at least on the Board as an adviser.

But, perhaps, this is not so much about becoming the largest "travel agency" in a few years as it is about being the largest MLM company that is using travel to fuel their growth. There is a huge difference.

It will be interesting to see how these race cars are handled before they crashe into the wall.

The LA Times Gets It!

Today had a very good article in the LA Times by James Gilden. He has taken the same points I have been making for months and has brought them to the people of Los Angeles. Some excerpts from the article:

Whether it's soap or travel websites being marketed, the goal of multi-level marketing companies is to make commissions selling business opportunities to friends, family, even strangers.

In this case, the ones who prosper earn most of their income from the sale of travel websites to other agents, not from the sale of travel itself. In 2006, YTB made 72% of its revenue from the sale of online travel stores and monthly fees and 15% from travel commissions...

...J. Kim Sorensen, president and chief executive of YTB, said YTB had put into place systems to control its agents' requests for FAM trips, funneling them through its central office and verifying the agents were producing travel sales...

...Hewitt made a plane reservation on American Airlines' website, not his own, because "it was cheaper." Hewitt then traveled to his destination and presented his YTB-issued card to several hotels and requested a travel agent rate.

"They just snickered at me when they saw the ID card," he said

#3 In The Series

Here is the third installment of Boek-TV. I decided to accelerate posting these because of some of the comments in previous posts.

In this episode, Earl Allen mentions numerous times about the 60% commissions that can be earned in YTB. Claims he made higher than a middle six figure income last year (one wonders why you would leave that), and tells about being able to write off all your travel because you are now an "insider"--which is not true. One of the few factual comments he made was that there are approximately 22,000 traditional agencies left and that we are mad. We are not mad for the reasons he claims, but we are mad. Grab some popcorn. This episode brought to you by Traverus!

More Wisdom from Mr. YTB...

Here is Earl Allen Boek coming to you from the farm again. Please note the change in the white-board in the background. From a bunch of scribbles to line charts heading up---some subliminal seduction? You be the judge.

YTB ought to be very proud of this individual representing their brand! But then again, he does say you can came with a truckful of garbage and YTB will take you. But please note the focus here. How much of this video was about travel, and how much was about recruiting?

Now This Is What I Am Talking About!

I just received this email from a YTB RTA. Follow the link at the end. His name is Duane Russell and hails from the Bakersfield area of California. His YTB site is TravelLife. Emphasis is mine!

Another interesting solo-ad from an M&A E-News Subscriber. You are subscribed as xxx@xxxxxxxx.xxx. Subscription options are at the end of this message.

$ 7 Trillion a year in travel ! Now is your chance to get in on the ground floor of e one And only hottest MLM online travel business in the world. For under $500 you now have a travel site the exact same as expedia, orbitz, etc. 80% off of your travel, not to mention, the residual income you will generate from your downline. Once you have 6 people, your power team is complete, and Weekly checks start coming in from now until you pass it to your kids because this company is publicly traded and growing 300% a year ! Too easy? Your right, so don't wait. There is a meeting once a month in all the major cities. Don't miss this opportunity !

For more info. Visit: http://www.ma-enews.com/m/link.php?id=ab3107d111007a

[End Featured Solo-Ad]

Clever, But Not So Professional

Not sure if this was created by YTB, Carnival, or just someone in the organization. It is clever for sure, but I also imagine it helps to seal the deal as well. But I have heard that YTB has said they would not do business with Royal Caribbean even if RCI reversed its decision.

YTB Speaks--Or So He Thinks...

Over the next few posts, I will share some entertaining videos from none other Earl Allen Boek. As you can see, professionalism is not a class offered at YTB-U. This first video is not so much about YTB, but a teaser to the more entertaining stuff. But it is interesting that I discovered that we had a common connection. It seems that Mr. Boek admits that without a traditional employer, he never would have been able to be where he is right now. He describes his farm and invites us all to the fishing hole. He talks about Steve Jobs (although he says it is pronounced "Jobes" I guess a biblical reference) and very interestingly he tells of his start with Saga Food Service. That is where the connection lies. Bill Scandling founded the company and was my father's roommate in college. The Scandling family is very close to our family and we have been on their boat numerous times. Sadly, Bill died just over two years ago, but I thought it was interesting that Earl worked for them before Marriott bought Saga out.

Anyhow, please enjoy this YTB RTA presentation from Earl Allen Boek--the man to whom you want to trust your travel dollars. Please note that early on, he defends the video as him "not trying to scam you". I think it is interesting, that a lot of the YTB positioning is from the defensive--Sorensen says he needs to "legitimize" the business in the eyes of the industry, and Boek needs to make sure you know he is not "scamming you."

YTB's Response To IATAN

This is the response to the revocation of IATAN endorsement to the RTAs. I think it is incredibly casual considering the ability to obtain the IATAN card was the primary focus of the sales pitch. The CRTA card opens some doors. The CLIA card opens a few more. The IATAN card opens ALL doors. Now all of a sudden, those doors have been slammed shut!

While CLIA is accepted by the cruise lines, it is not universally accepted in the hotel industry or with tour operators. As Arnie Weissmann has said, many suppliers are hesitant to express an opinion on YTB, I imagine that this move by IATAN may have them changing their policies to accept IATAN only. It would be a way to do the right thing, yet not come out of their closet.

The RTAs have lost a huge part of their program. If I were an RTA, I now have to ask if it was worth $500 and the $50 a month.

YTB INFORMATION RELEASE IATA/IATAN UPDATE

November 16, 2007

Valued RTAs:

YTB is pleased to announce our best financial quarter ever, followed by a highly successful event with Carnival Cruise Lines just last week. Some of you have expressed concern about the cancellation of our IATA/IATAN accreditation. We want to assure you that this does not, in any way, affect the ability of YTB or its RTAs to sell travel and be paid commissions from the sale of travel. We are actively working with IATA/ IATAN and our legal counsel to substantiate that YTB meets or exceeds IATA's/ IATAN's regulations.

As a company that has always upheld high standards, we applaud IATA/IATAN for ensuring the integrity of their programs, and hope to have our certification reinstated as quickly as possible. We thank you for your continued support and for the passion you share for YTB. We will continue to keep you updated on any developments as we move forward in our efforts to work with IATA/IATAN. We also wanted to answer some of the questions we, and many of the Directors, have been receiving.

Questions and Answers

1) Is YTB corporate working to get re-installment of the IATA/IATAN?

Yes. YTB and our legal counsel are actively working with IATA/IATAN to resolve this issue and substantiate that YTB meets or exceeds both IATA/IATAN's regulations and our own high standards.

2) Is YTB in trouble?

No, not at all. We just announced our best quarter ever, including our highly successful Sail-a-Thon with Carnival Cruise Lines. We are making plans for even more exciting opportunities for our RTAs and Reps, including great travel and event packages for the 2008 Beijing Olympics.

3) Are we a "legit" travel agency because of our remaining affiliation with ARC?

We are a legitimate travel agency for many reasons including our affiliation with ARC and CLIA, the extensive training and support that we offer our RTAs, our strong vendor relations, and the fact that Travel Weekly named us the 11th largest leisure travel agency in the country.

4) So, what did IATAN status do?

The only thing IATAN status did was offer an additional avenue for resources and supplier contacts. It also offered a card that must be earned and was recognized widely among the travel supplier community. The CLIA card offers many of the same benefits.

5) What is the difference between ARC and IATA/IATAN?

ARC (Airlines Reporting Corporation) is the organization that certifies us, and other travel agencies, to book travel and conduct business. We are in good standing with ARC. IATA/IATAN is a global trade organization, but their activities and accreditation do not have any effect on the day-to-day running of our business.

6) Can we still use the IATA/IATAN number at the time of booking?

Yes, the number will remain the same as it also serves as our CLIA and our ARC number.

7) Can we confirm that we are one of four agencies that had their accreditations cancelled?

Yes. However, we are actively working with IATA/IATAN and our legal counsel to regain our accreditation.

8) Are we going to issue new credential cards, since they say IATA/ARC#?

Until our issues with IATA/IATAN are resolved, we ask that RTAs refrain from using any materials that reference IATA/IATAN.

9) How is this going to affect the RTA's ability to earn commissions or receive travel perks? When calling the vendor, don't they need to give the IATA number?

It will not affect the ability to receive travel commissions in any way. Reduced rates will still need to be approved via the reduced rates department to determine eligibility. Hotels only require CCRA (in YTB's booking engine) to receive net rates (available in the travel portal); these rates are basically when booking with hotels directly. Some vendors will require an IATA or CLIA number while others want the YTB phone number as verification.

10) How does this affect YTBU teaching about credentials? Should we just omit the IATA/IATAN portion all together?

For now we should omit the IATA/IATAN portion, but we will continue to evaluate this, as we work with IATA/IATAN.

11) How should we address the IATA/IATAN issue in business briefing presentations?

If someone asks about it directly, assure them that the loss of IATA/IATAN accreditation does not, in any way, limit our ability to sell travel and receive commission. Also tell them that YTB is working with IATA/IATAN and our legal counsel to clear the matter up as quickly as possible

12) Does this have anything to do with Royal Caribbean terminating our contract?

No, the two issues are not related in any way that we can identify.

13) Why does it seem like all this bad news is coming at once?

As YTB continues to grow, we become a bigger threat to both brick and mortar travel agencies and other online travel sellers. That means that some of our competitors might attempt to impede our business progress in any way they can. Think of it as a "success tax." But know that YTB's entire team is here to support our Reps and RTAs and we will continue to fight the negative statements and misinformation about our company.

Thanks for all you do for YTB.

J. Kim Sorensen

President & CEO

YTB Travel Network

Happy Thanksgiving!

Wishing everyone a Happy and safe Thanksgiving!

For a Complete Change of Pace....

I will not make any commentary, just put out the "facts" since when I say anything at all, it tends to rile up the RTAs. No comments, I will let the numbers speak for themselves.
(all information can be verified on the financial pages of Yahoo or Google)

August 1, 2007 stock closed at $8.50
August 2, 2007 stock closed at $3.75
November 19, 2007 stock closed at $0.99

Former CEO Michael Brent is the single largest shareholder in YTB. Since August 2, 2007, he has sold 983,184 shares of stock and received $2,070,983. He is selling stock very frequently and usually daily. He still owns 14.1 million shares

Current Chairman Lloyd Tomer sold 1 million shares on January 24, 2007 earning him $6.69 million dollars. He sold an additional 14K shares on September 13, 2007 resulting in $39,200. On September 14, 2007, he sold 2K shares resulting in $5,600. He still owns 2.6 million shares and is considered the smallest shareholder of the company's major shareholders

Kim Sorensen has also sold stock, but not to the degree of the others and is the company's second largest shareholder with 8.9 million shares.

The average volume is 242,000 shares bought or sold on an average day. On August 8, 2007, there were 864,800 shares bought and sold. That day, the stock opened at $6.75 and closed at $4.00 a drop of 59.94%

Since August 1 to yesterday the stock has dropped 88.35%

In 2007, two of the major shareholders and two founders of the company have sold off $8,807,076 worth of YTB stock. In 2007, the stock has gone from a high of $9.50 to a current level of under a dollar.

Currently YTB has a market cap of $95.2 million which is down from $119 million two weeks ago. The top three investors (all founders) currently own only 25.6% of the company. There are an additional 69 million shares out there that were purchased for a price higher than $0.99.

eBay Is Getting Into The Action

I read a column today about how Craigslist is a hotbed for drug trafficking and prostitution. I also know that it is a hotbed for MLM agents to market their business--either travel or selling the opportunity.

I mean after all, why spend money to advertise?

I also have noticed a LOT of MLM firms selling on eBay. Again, either the opportunity or the travel itself. For those not familiar, eBay has always recognized there is an inherent risk in allowing unqualified people to sell travel on eBay and has required a special certification through Square Trade in order to do so. This certification requires a valid IATAN number, as well as a few other items such as a business checking account, physical address, and business telephone number listings.

Well, it looks like Square Trade is weeding out the agents that have signed up under an IATAN number that is no longer valid. Please see the following message from Square Trade:

We ran a report of all Travel Seal members and their corresponding IATAN numbers against the IATAN numbers which were recently revoked for YTB and Inteletravel, the reported returned a total of 25 accounts, of those 25 accounts, only 12 were found in approved status.

I have cancelled the 12 approved accounts and associated notes with the remaining 13 accounts indicating that they are not to be reactivated under the same IATAN #.

Have a nice Thanksgiving.

Regards,

XXXX
Customer Experience Manager
SquareTrade

A WBAL-TV Update

To read the article and see the video, click the WBAL-TV Logo

To address some of the comments I saw as I was scanning them...apparently YTB and Barry Simms did get together and YTB agreed to reimburse the money lost.

However, when my portion of the interview was conducted (last Monday evening), the only communication YTB had sent to the reporter was the emailed quotations that were displayed on the screen.

And also, on Monday afternoon, the "terminated"RTA's website was still active. I don't know if it still is.

So I say good for YTB and doing the right thing. I still would like to know how the whole transaction took place.

(My apologies for the delay. The interview aired at 11pm on Thursday evening, and I was scheduled to be out of town Friday morning till Sunday night and just saw it. Had I seen it prior, I would have updated the blog)

Thoughts On The Issue At Hand

Before heading to New York with my kids for a pre-holiday long weekend, I wanted to fire off one last entry to somewhat address all the comments that have been made in the past few days. When I started this blog, it was with the intent of allowing everyone to have their say. Pro and con. It has worked well. If you care to disclose your name, you can. If you care to be anonymous, that is OK too. Everyone's opinion carries equal weight and is not edited, moderated, or blocked. It is all about speaking one's mind, right? And I want to thank everyone for their posts--even the ones with which I don't agree.

As everyone knows, a battle has been going on between "traditional" travel agents and the "MLM" travel agents. I want to state again, that this is not about YTB. It is about the model. Unfortunately (or fortunately) YTB is the loudest, largest, and most egregious of the MLM companies out there. Their RTAs are very vocal, and in my opinion, lacking in knowledge of the industry or business in general. This lack of knowledge has only served to fuel the fire and make a stronger position for the traditional agents.

On the traditional side, we have established a petition that has a VERY powerful message and we have been lobbying the industry for change--or at least for a review. To date, I think we have been very successful. In an incredible flash of good timing, RCI decided to terminate contracts. Shortly after that, Pilgrim Tours offered a statement regarding the MLM model and how they would no longer support it. Perrillo Tours issued a statement in support of the traditional agent and cited that 90% of their YTB bookings were for the agent themselves. Many representatives of suppliers, while not speaking FOR the suppliers, have signed the petition as well. And finally, IATAN has revoked the endorsement of 4 agencies--one of which is YTB.

While the RTAs are running around saying it is a misunderstanding and blessing me as if I had severe allergies, this is a very serious problem for them and they may not realize it.

In the most basic sense, their reputation has been tarnished when a leading supplier essentially fires them. It is further eroded when their "Sale-A-Thon" is not quite the success it should have been. And finally, what does that reputation look like when IATAN revokes their endorsement?

Many RTAs do not know the difference between CLIA and IATAN as is evidenced by some of the comments to this blog. But, that is OK, because the suppliers do know the difference. When a company uses the IATAN card as one of the largest enticements to buy into the opportunity and it is no longer available, it is an issue. I am amused that IATAN was so important that it was on EVERY sales presentation and training session by YTB before last week. Work hard, and get the IATAN card and you too can travel like an insider. Now all of a sudden it really does not matter. Other than cruise lines, most suppliers (hotels, resorts, tour operators, car rental agencies, and airlines) seek an IATAN number to honor any bookings (and subsequently commissions) and any discounted travel. If I were a YTB RTA, I would be pretty ticked off right about now.

There will be more isses to deal with down the road. The Attorney General in Rhode Island is waiting on a report from the Department of Business Regulation. Apparently YTB has not complied with the laws of the State. Again, this will be yet another black eye.

There will be an investigative report tonight on WBAL-TV in Baltimore about YTB and one of the rogue agents that took $15,000 from a group and canceled their reservations. The interesting part is that YTB corporate refuses to talk to the reporter.

The model is a bad one for the consumers. Travel is NOT a product. It is an experience and the MLM model does not recognize that. They claim that Mary Kay and Tupperware are MLM--true, but they sell a product. The product they sell is also considerably less expensive than travel. Why would a consumer fork over thousands of dollars to an unknown website? With Orbitz, Travelocity or Expedia, you know the brand and there is recourse when something goes awry. When you book with a traditional agent (home based or store based) there is recourse and you know where to go for help. With YTB you are not booking with a known company. You are booking with a person that was able to afford $500 to hopefully buy some perks and make a lot of money. And when there is a problem, YTB (corporate) can conveniently say that they are independent and we cannot control them. It is obvious from their websites that they have no desire to service the consumer or offer any help. Most of the sites do not have any telephone numbers or email contact information and the "HELP" page directs the consumer to call the vendor directly. Sorry Charlie--it does not work like that when someone just forked over several hundred or several thousand dollars!

The vendors are getting a bum deal on this too. Sure there is incremental revenue from the MLM agencies. RCI apparently tossed away $23M of it. They took a look and figured out what was "good business" and what was "bad business". Good business shows that their agents are actively selling the experience to someone other than themselves. Good business shows a modicum of professionalism. Good business does not make your field reps groan when good business approaches them. Good business rewards you for FAMS and discounted travel with full fare clients--not more FAMS and discounted travel. Good business will treat the customer as a mutual customer and treat them as you would yourselves. Good business is interested in learning about the industry--the perks are pretty far down the line. Good business sells travel--only travel

Bad business on the other hand--well, they don't!

So what does my crystal ball show? It shows a drawn out battle. I think finally, the traditional agents are a cohesive group with a cohesive message. I think the suppliers and associations are looking at this very carefully. They will decide if they wish to align themselves with good business or bad. I suspect there will be more suppliers that shun the MLM model. There will be no rush to jump on this bandwagon, but I bet they are all looking at the numbers as I type!

The YTB financial statement just released indicated $5.5M in travel commissions and $28.6M in website sales and rentals. Now tell me what business they are in?

But on that commission number, that is probably representative of $55M to $60M in sales for the quarter. If all 4 quarters are as strong as this they may be on target to reach the "verified" sales they claimed last year. But I challenge that $240M a year in sales for 121,000 agents is a pretty poor showing. When I look at the petition, I see some big names on there and I venture to guess that just those 2600+ names represent well over $1BILLION in sales.

$240M/121,000 Versus $1B/2600---now you decide which is good business and which is the bad?

Now--please feel free to comment away--there is no moderation here and your opinions deserve to be heard and not edited down.

Top 10 Questions For Your Upline In A Non-IATAN World

1. How do I sell Royal Caribbean, Celebrity, Azamara if a customer wants to sail on them?
2. How do I sell Perrillo Tours, Pilgrim Tours, or Qantas Vacations if a customer wants to vacation with them?
3. How will I get all the discounts and perks available to IATAN cardholders now that we are no longer endorsed by IATAN?
4. Will all of the suppliers accept a CLIA card for travel perks and benefits?
5. Are you going to be reducing my monthly fee to compensate me for the inability to sell products and the inability to redeem my hard purchased perks?
6. Are there going to be other suppliers who turn off the faucet on our program?
7. What about CLIA? Are they going to repossess our CLIA cards next?
8. Is ARC also going to not allow us to sell airline tickets?
   
9. Can I get my money back? I am not getting what was promised to me when I signed up.
   
10. Do I need to contact an attorney to represent my interests?

It's Official, IATAN Drops YTB

Well, last night I said the silence from YTB was telling in regards to the IATAN issue. Sometimes, they say a picture is worth a thousand words.....

IATAN Dropping The Other Shoe

Modern Agent is reporting that YTB was one of the agencies terminated by IATAN. I have not heard a confirmation (or denial) on this, but I do have to say that the silence from the YTB front is eerily similar to the silence we saw when RCI dropped the first shoe.

At the same time, several sources told Travel Pulse Daily that YTB was on IATAN's list of dropped agencies.

.

RTA Income Claims

This information is from a document entitled, "Rep and RTA Income Claims" as authorized by YTB.

RTA Income Potential Claims . The following RTA income potential
claims are approved for Rep use in presentations and promotional
materials:

1. “As a YTB RTA you earn 60% of the travel commissions earned by YTB on everything from hotels, car rentals, cruises, fly/drive and fly/hotel packages and yes, even airline bookings.”

2. “In addition to the travel discounts, perks, Fam Trips and the tax savings which come with the YTB RTA position, our RTAs earn 60% of the travel commissions YTB receives whenever travel or travel related products are booked through the YTB system. You may have heard that the airline industry no longer commissions airline travel. That may be true for most travel agencies, but not for YTB – YTB earns, and you as an RTA earn, every time that you
book airline travel through the YTB system. You are even commissioned on your own travel.”

3. “Book Travel and Travel Like A Pro, that’s the YTB motto. Attend free CLIA certification training, YTB gives these one half day trainings continually across the country, and you earn a CLIA card which enhances your access to travel discounts, perks and Fam Trips. Never lose sight of the importance of booking travel and earning travel commissions, a full 60% of the travel commissions are paid monthly to our RTAs. Forget what you’ve heard about no
airline commissions, airline tickets are commissioned to YTB RTAs every time you or your customers book airline travel through the YTB booking system.”

4. “Can you receive regular commissions by booking travel as a YTB RTA? The answer is clearly, yes. YTB pays travel commissions on all travel and travel related bookings made through the YTB system. Cruises and fly/hotel packages pay the highest commissions; YTB also pays on airline bookings and on your own travel.”

At best, most of these 4 are misleading as it applies to the travel industry. These "talking points" are very finely worded to avoid any legal issues, but they are misleading on many points.

1. The allusion that YTB earns commissions on airline bookings. The reality is that the airlines do not pay commissions. Yes there may be an odd consolidator here and there for some international travel, but there is essentially no commission to be had. What they do receive is a flat fee (I believe $6) for each ticket booked on the site and the RTA is entitled to 60% of that. So without industry knowledge, a prospective RTA might envision all this airline commission when in reality is is $3.60.

2. This point is obviously to sell the perks. They discuss perks, FAMS, discounts and tax savings. While YTB claims that they do not sell the program on these points, it certainly seems as if they do. Again, the emphasis on airline commissions is misleading. Earning commission on personal travel is an accepted practice in the industry, but it is certainly not a reason to get into it. We are working of a 10% margin and any consumer can probably find an agent to rebate or discount that will be more to the benefit of the RTA than taking their own commission. Assume $1000 Carnival Cruise. YTB Earns 16% or $160. The RTA earns $96. I imagine one could go to Drews Cruise and get a rebate larger than that. Remember, if this is the only sale for the RTA, that commission is further reduced by the website rental fee.

3. This is the most egregious of the four. They are touting more perks and discounts. They are admitting that they (YTB) are offering free half-day CLIA training classes that will get you a CLIA card good for more perks and benefits. I had mentioned that I had heard that YTB was doing this and everyone rebuked me. Now it is in writing from YTB's own manual.

4. This is probably the less deceptive of the four talking points. However, it does again allude to the airline commissions that can be earned. Actually, it is not even a commission, but a fee come to think of it. And again, while it does not claim that you can make a certain amount of money, this claim does not say what the majority are earning--zip.

I notice in the first part of the document where they talk about the Rep points, they keep using the phrase "thousands make hundreds and hundreds make thousands". AS I have said from the start, their business is renting websites--not selling travel. It is glaringly obvious that there are no such phrases for the RTAs. But then again, "hundreds make tens and hundreds of thousands make zero" just does not have the same ring.

NOTE: I have uploaded this document to my site as I suspect that it will be pulled from the source shortly. The original document is a Word document located here. Follow the link to Income Claims. This is the site belonging to a Level 2 Director, Arlyne Thompson. According to her site, she has 400 RTAs in the California Expansion Team. Actually, the entire site is interesting and worth snooping around a bit.

Just Some Comments

This weekend, I have been re-reading this blog and, more importantly, the comments. I have said it before, my beef is with the model of MLM in travel. It is not with YTB, Traverus, GTI, or any of the others that are out there. Sure, they will be used as examples, and to be honest, YTB has taken the brunt.

I ask myself why? Well, first off, they are a publicly traded company and a lot of their info is public. Second, they seem to be the largest MLM out there. Third, they are the loudest.

Since I published my column, I have received thousands of emails and most say the same thing--"it is not a scam because someone told me it is not." Maybe it was not those exact words, but similar in sentiment. Well, to the people involved--WAKE UP!

Do you buy that "brand new" Yugo because the salesman told you it was in perfect shape? Do you plunk down a life insurance premium because a salesman sold you it "was the best one"? Do you buy some Firestone 500 tires on eBay because the seller said there was "plenty of tread left."? Of course not. So why are you buying into a business where no one can show you anything?

I have been told that the FTC prevents anyone from discussing any types of earnings. While this is false, it should raise a BIG FREAKING RED FLAG to you. The FTC does not allow YTB to tell you about earnings, but it has no jurisdiction over the independent people. YTB is the one that forbids you from talking (it is in the contract you signed)--and I am sure there is a good reason why.

In these comments, I have heard it said I will never say anything good about YTB. Well, here you go--they are an outstanding marketing company. They know how to recruit. But I am afraid it stops there. Everywhere I turn, YTB comes up on the dirty end of the stick. RCI fires them. Perrillo fires them. They are all over the Internet and the most linked term is "scam". You just do not see this with traditional agencies. Sure there are some bad eggs, but it seems that the YTB basket is full of bad eggs--they are the norm, rather than the exception.

Just this morning, I was a guest on Peter Greenberg's syndicated radio program (150 stations and XM 166). He was talking about "become a travel agent" scams. Peter's office contacted me. I did not seek him out.

Last night, a reporter from WBAL-TV in Baltimore called me about a YTB agent that booked a group of 30 to Las Vegas, and then ran with the money. YTB is doing nothing to help these folks, yet they had no problem renting their IATAN number for this woman to pull off the scam. WBAL-TV will be coming to my office on Monday afternoon to air a segment on Thursday at 11pm. Again, they called me! And on Friday, IATAN apparently pulled the plug on 4 US Agencies as well. Travel Weekly reported that they were of the "MLM/Card Mill" Model. I am not saying it is YTB--we have not heard. But this goes to show that the industry is starting to take notice of the monster that has been created.

So, as I said, YTB and the term "scam" are never far apart. Rather than point the fingers at me, why not point some back at yourselves and the management?

And in the meantime, the offer is still out there--show me that you are making money selling travel under YTB. We are going on three months and the closest I came was a woman saying that "I made enough to buy me a Cocaine White Bentley that I am gonna drive to the next YTB meeting." In case you are wondering, Bentley does not offer "Cocaine White" as a color--check it out!

So, I will keep on plugging. MLM is bad news for the industry and slowly the industry will come around. I will keep it in the forefront. I will continue to show examples (and yes, opinions) as to why it is bad news. I will continue with the petition and I suspect there will be more changes ahead.

So, if you are in the Baltimore area, check out Thursday's 11pm newscast and see what I had to say with Peter this morning!

IATAN Strips 4 Agencies of Accreditation

Travel Weekly is reporting that IATAN has stripped 4 US agencies of their accreditation. I imagine the players will come to light in the coming days.

Read about it here!

One Day Sale

In answer to the RCI decision, one of the MLM companies, YTB, has decided to have a one day sale to support Carnival Cruise Lines, who did not follow along with RCI.

Well, I am not sure how successful this will be; and am not sure any real numbers will be available, but I do know that the way this is being handled just strengthens the position that MLM and travel does not mix!

I have spoken with several people that have called and the level of incompetence is staggering. Just a small sampling of the responses people received when calling to inquire about a cruise on their special toll free number:

• YTB offered a cruise certificate but was not able to discuss any restrictions
• YTB "agent" had never cruised and no one in the office had not either (she thought) and recommended the customer just go to a website and get all the answers
• YTB said to call a RTA to book a cruise. When told we did not know an RTA and wanted to book it now, the YTB "agent" put the prospect on hold and never came back

And that is just three examples. I wonder what is going to happen to the poor souls that actually purchase something. I am not sure who is staffing this toll free number, but all they are doing is either trying to sell a highly restrictive certificate (the details will be on the back once you get it), or telling the consumer to go to an RTA website to book it themselves.

So where is all this "consulting" and "selling" that the YTB RTA's claim they do? I have seen none of it so far, yet the majority claim they actually sell travel.

I said it before--consumer beware! But I will add--supplier beware! Is this the person you want representing your brand?

Perillo Tours Gives MLM The Boot

From Modern Agent, Perillo Tours has come out with a statement! Are the other suppliers far behind? I hope not!




Here is the excerpt from Travel Weekly. Steve is pretty smart. 90% are taking their own trips. Insta-rebate!

Perillo Tours quietly stopped taking bookings from YTB Travel Network, the controversial Illinois-based multilevel marketing travel agency.

Steve Perillo, president of Perillo Tours, said that when he read Royal Caribbean was weeding out "card mills" and that YTB was on the list, he decided to have a look at YTB bookings for his firm.

He said he found that "90% of the travelers and booking agents were the same person. ...I would love for all agents to take our tours, but this is not the idea. It is to support agents to learn and sell the product, not to use this for their own travel discounts. ...This is abusing the privileges of sellers," he said.

He said Perillo Tours might take similar steps regarding other YTB-like firms, but he needs to learn more about what others are up to first.

Rhode Island Folllow-Up

I am still not sure what the issue is, but I am relatively sure that there IS an issue. I am waiting on a response from the state's DBR, but this is the answer I received from the Attorney General's Office:

You'll have to check with DBR on this. As the regulator, DBR's driving it. What would involve our office is evidence pointing to YTB potentially violating any RI consumer-protection laws, and we'll be relying on DBR to provide us with any such evidence if it exists.

This is governmental tap dancing at its finest. Read between the lines and this guy does not want to commit till his agency has a case. But he did say that the DBR was driving an investigation. I do have an email into DBR to get a comment.

Stay tuned!

Did Rhode Island Give YTB The Boot?

NOTE: This is information that was given to me by someone I deem reputable. When I checked a few RI sites, they indeed had their booking ability suppressed. Of course there is no mention of this on the YTB end. I have a few calls into to the Attorney General's office and will post the response when it is received. So, at this point, this is not fact, but I can say that there is a preponderance of evidence supporting the assertion.



Today, I heard that the Rhode Island Attorney General has shut down all RI-based YTB agents. I hear that the AG is in discussions as to how to bring YTB into compliance with the laws of the state that they have seemingly been skirting for a while. I only know of one RTA site, and it is indeed shut down and redirects tot he YTB Business Opportunity page with no mention of being able to book travel. Emmanuel Travel.

I wonder how many YTB agents are in Rhode Island, and I wonder what the current spin is on that?

Some Details On The One Day Sale (and a consumer warning)

The details are beginning to emerge! They are selling Carnival Gift Certificates in addition to the two category upgrade offer. More details are posted here on this YTB page Looking at the details, well, look for yourself...

2007 Carnival Gift Certificates are now available for a limited time! Great gifts for Parents, Relatives, Close Friends, Business Acquaintances, Employees, Party Giveaways or a Special Unexpected Holiday Surprise.

Certificate Prices are for Two People sharing a Stateroom and are available in different categories for each length of cruise. Once purchased and awarded all certificates can be upgraded by the recipient for an additional fee. Certificate levels include all Carnival Ships sailing itineraries of that length except as noted. Certificates are valid for 18 months. Certificate purchase requires signed agreement.

Choose how you cruise!
Special - This award can only be used from September 1st to December 15th. The price includes cruise fare and port charges only. Federal Taxes and Paid Gratuities are not included and must be paid at time of booking.

OK, so you need to buy it on November 8, 2007. Use it before December 15, 2007, and prepay a gratuity for service that has yet to be rendered? Now who is getting the special deal here?

Oh and check out the restrictions....

Restrictions:
4 Day Certificates: Weekend sailings excluded
5 Day Certificates: NY & 6 Day sailings excluded
7 Day Certificates: Valid on: Carnival Destiny, Carnival Glory, Carnival Victory, Carnival Legend,
Carnival Valor, Carnival Triumph, and Carnival Liberty only.

Extra Special 3 and 4 Day Cruises:
$398.00 (does not include taxes, fees or pre-paid gratuities)
Valid on Fall sailings from Miami on Carnival Fascination only.

I also note that YTB has been making noise about their RTAs being REFERRING Travel Agents and they do not refer to them as "Travel Agents". But in the above webpage, they do refer to them as "Travel Agents" and also in their press release! Seems like they want it both ways again. Just like their sales numbers. Perhaps REFERRING is not a comfortable word with consumers any more?

CONSUMER WARNING!

When you go to purchase that cruise certificate, your data is NOT secure. The page where you are required to input your credit card is NOT a secure page. Check out the URL:

THE URL HAS NOW BEEN CHANGED AND IT IS A SECURE PAGE.

My advice is to NOT book anything online at this page. When transacting any e-business, always look for the "S" in the URL address. To protect your data, and possibly identity, the URL should begin with https://www.your....

How Low Has the Cruise Industry Sunk?

I am considering this YTB/Carnival partnership to sell all these cruises on one day. I have my doubts as to the success of the idea, but we will see. Or more likely, we won't see. I know I am reluctant to discuss my failures--human nature.

But I got to wondering about cruising in general. YTB feels that with 106,000 websites and a few email blasts they can create this huge demand for cruising on Carnival Cruise Lines. If we take away the fact that 84% of those RTAs have not sold a single piece of travel and are probably blissfully unaware of the recent changes to their individual websites, I wonder when did travel purchases become an "impulse buy"?

I know that when I market to my clients, I need to present an idea to them three, four, maybe a dozen times before they act. I have seen very few impulse purchases unless it was a gift certificate.

Has Carnival now become the National Enquirer and The Star of the travel industry? Are we at the point, where an email, or a flash ad on a website is now all it takes to pick up a new cruise to go with that pot roast?