Stay Safe

To all my friends and associates on the Gulf Coast, please be safe and sane. My thoughts are with you--please check in when it is safe!

Can SEC Investigation Be Far Behind?

The St. Louis Post Dispatch has just released a story on all the insider deals by YTB. Some have been known for some time, but others were a surprise.

While technically legal, in today's environment, they do raise suspicion and red flags according to experts. And then you toss in the unwillingness to comment for the story and you have to go "hmmmm".

Some of the transactions include:

• The Plane
• The Statue
• The K-Mart
• The Development
• The Cars
• The Sub-Prime Bank Loans

It almost seems if YTB is just flaunting their blatant disregard for ethical business operations.

Congratulations To The Davidoffs

Well, well, well. It appears that the Davidoffs may have had a little extra incentive for cheering up YTB in the trade press. Apparently they were one of the Freedom Winners at the conference. So Phil and Doris....are yor now IMRs and RTAs?  So let me get this straight, you appear to be members of YTB and are also hired by them, yet you have no qualms about singing the praises of YTB and branding yourself as a former ASTA President. I am sorry, but I have to say that what little respect I had for you is very quickly evaporating. ASTA distanced themselves from your comments but did not name you--maybe they should have.

But reading this list is also interesting about the names that are or are not on the list. Holton Buggs is there, Phil Piccolo is not, Baughknight is not, PJ Jensen is, Seligman is not, and I did not see one single Osei, Turner or Walker in the bunch. But a lot of

Interesting reading for sure!

Bermuda Investigating YTB

Bermuda appears to be investigating but their laws have no teeth.  I wonder if this may have been a reason for the expansion into Bermuda in the first place?

From the Bermuda Sun, they know YTB is a pyramid, but the antiquated laws make it difficult to prosecute.

One legal source, who has links to the DPP said: "A file has been on the fraud unit's desk twice. We know they've looked at it, and continue to look at it, but it's a question of getting a prosecution. There's no doubt that this is a pyramid scheme, but the chances of getting a prosecution here are close to nil. In California, and elsewhere in the States, they tailor legislation for exactly this kind of situation. In Bermuda, our laws are more broad-ranging, so not much can be done."

And the Authorities appear to be cooperating with the Cal;ifornia Attorney General as well:

In a separate development, the Office of the Attorney General in California warned Bermudians not to get involved in YTB. A spokesman said: "This office does not undertake lawsuits lightly. Every action follows a thorough and complete investigation of the evidence. We hope that Bermudians will take note of what is happening here and will protect themselves from this kind of aggressive marketing."

I Am Speechless

Several months ago, I posted a photo on this blog that raised the ire of the YTB crowd. It was called pornographic, vulgar, exploitative, and just downright offensive. Apparently "humor" is not one of the classes offered by YTB at their universities. Apparently what is good for the goose is not good for the gander.

On today's post of Just Picture It Now, The YTB Savior In Chief includes a link to a photo of the blog author (presumably) either urinating or masturbating on a public highway in presumably Cozumel Mexico. Is this the appropriate image for an ambassador of travel to portray to a foreign nation? Or just another "we don't care" attitude from YTB?

His paragraph encourages YTB headquarters to send this photograph to "the ATSA" because he now feels that it is no longer this blog's influence that fired up the California Attorney General, but "the ASTA""

Oh, before I go. I did happen to send this “gem” up to the home office with an idea of getting everyone together on the Seminar @ Sea with the Davidoff’s and sending the ASTA a postcard from the Seminar entitled “Greetings from Cozumel”.

As I was typing this entry, it seems that the image was mysteriously pulled. However, I was able to get a copy:

Obviously this was not the gist of his blog post--it was intended to bash ASTA because they do not back up the Davidoff's position on YTB. But like it or not, ASTA is a player in the industry and since YTB says they are so concerned with "legitimizing" themselves in the industry, one would think bashing ASTA might not be a good thing to do. That list of "we don't need no stinkin'...." gets longer and longer each day.

Since the blog in question does not allow for any comments, if you are offended by the photo (if you saw it before it was pulled) or the content, you can voice your opinion directly to the CEO of YTB at info@ytb.com.

Flying High With YTB

ASTA Takes A Stance

ASTA has taken a very firm stance on the MLM issue and has essentially renounced the Davidofff endorsement of YTB!

ASTA Reiterates Opposition to Abuse of Multi-Level Marketing and Card Mills

Alexandria, Va., Aug. 28, 2008- Following on the heels of legal actions taken by various states, including California, against a multi-level travel marketing firm (MLMs), ASTA is reiterating its stance regarding MLMs and card mills.

Said ASTA President and CEO Cheryl Hudak, CTC: "While it may be possible for an MLM to operate within the law, when the rewards for participating individuals are based primarily on recruiting additional participants and not on selling the underlying product, it is appropriate for governments at both the federal and state level to investigate and act where deception and abuse are occurring.

"ASTA is aware of a recent trade article in which a former ASTA official (16 years ago) was quoted in support of a multi-level travel marketing firm that has been sued by the State of California, among others. He is entitled to his opinion, but let me be clear that while we do not question his right to a contrary view, ASTA absolutely does not share the quoted opinion about the probable future of the travel industry.

"Card mills are a different type of operation, in which the idea is to sell what purport to be travel agent credentials to consumers who are not planning to seriously engage in the sale of travel as a business but who are trying to secure professional courtesy discounts that are not intended for them. ASTA has actively opposed card mills for decades. We filed suit in California and the case was settled by our collecting and destroying the cards that had been issued. We also complained to the Federal Trade Commission, but our request for a trade regulation rule was denied in large part due to lack of support from the supplier community," Hudak added.

In 2005, as a way to educate the public about the harm that multi-level travel marking firms and card mills pose to the travel industry and consumers, ASTA released to Better Business Bureaus (BBBs) and consumer protection agencies across the country a white paper entitled What Consumers and Consumer Protection Agencies Should Know About Travel Industry Card Mills. At the same time, this white paper ASTA was made available to consumers on TravelSense.org. To read, go to www.travelsense.org/consumer/index.cfm.

The paper examines how holders of card mill IDs differ from legitimate travel agents and what credentials legitimate travel agents may have. It details the ways in which travel industry card mills harm consumers and the travel industry.

More Trouble In Wood River--YTB Cans Nearly 10% Of Staff

YTB has laid off nearly 10% of their headquarters employees. This move had been rumored since just before the convention and of course denied by all the RTAs and Reps that are "in the know". Some even went so far as to allude that YTB was more sound than Royal Caribbean who laid off 400 employees a few months ago. While 400 is a lot of people, it is certainly not 10% of their workforce!

What is ironic is that since the convention, YTB has created the pitch to "Recession Proof Your Income" They are selling the DVDs to their Reps and the message is clear--join YTB and don't worry about income ever again. Does YTB listen to their own advice? Or do they just creat advice that will create a revenue stream in the form of another DVD, Magazine or flyer to purchase? Did YTB provide this DVD to the 25 employees they laid off? Is there any truth to the rumors that they required 12 hours workdays for 8 hour pay at the convention?

It certainly does not seem that YTB is quite the "darling" of Wall Street or Main Street.

I realize business is business and tough decisions need to be made all the time, but the current economic condition did not sneak up on us (and if it did sneak up on YTB, they deserve everything they have coming to them), yet in the past 8 months they have purchased a corporate jet (from an insider), purchased a multi million dollar foam stage prop (from an insider), chartered two ships that failed to sell out, and made a lat ditch effort to stave off the California lawsuit.

My best wishes go to the employees who were laid off, I hope it is a sort term issue and I am confident that there are much better opportunities that lay ahead.

The Lawyers Lay In Wait

Last week in Travel Weekly, there was a blurb about attorneys laying in wait for the next suit against YTB. Some of the insight is amusing. See, it was not only this blog that felt it was just a matter of time.  Before long, you will have your pick of suits of which to enjoin:

There's no shortage of websites devoted to YTB matters. One law firm is even launching www.ytblawsuit.com as an information source and tool for finding more plaintiffs for a class action filed in mid-August. But someone has apparently expected this kind of litigation for awhile. Another site, ytbclassaction.com, is unused, but the domain name has been held for more than a year, TC hears. The owner is the Roth Law Group in Chicago. But the firm is not listed as a plaintiffs' attorney in either of the existing class actions filed against YTB.

Where's The Pinnacle Award

Back when the awards were announced, the word was that it was being "saved" for the convention.  So did YTB earn it again? Or were they passed over?

The word on the street was that there was some pressure from "real" agents that had received it and how it felt a little less prestigious.

A Fitting Image For YTB

By now, we all know of the "image changes" at the recent Olympiad. The not so cute singer... the not old enough athlete...the mental terrorism...and the fake fireworks. All these were done to enhance the world image of China as they had an opportunity to really shine. But the farce came apart and the world was able to see China for what it really did represent (no politics here) as opposed to the image China felt the world should see.

That sort of seems like one of the MLM companies that has taken a hit on this blog for the better part of a year. As a matter of fact, they even had a connection to the Olympics. Remember, they were going to be the world's largest supplier of tourists to the Olympiad because of their affiliation with Shanghai Spring Tours. Well, that did not happen and apparently YTB was not above the IOC and they were not able to "call a play" to allow the $3M in tickets reserved for Chinese Nationals to be used for their packages to US Nationals. So how many were there? My guess is zero. I bet there were severl directors who paid for a package and then were forced to buy locally and see if they could attend any of the events.

Last week's edition of the YTB Biz Report (as all weeks do) featred the above graphic as their "inspirational insight" along with this quote....

Some people make headlines while others make history. ~Philip Elmer-DeWitt

Well, maybe it is appropriate for some companies or countries, but not so sure it fits the bill here. YTB is indeed making headlines, they may be also making history in a sense; but rest assured most of what they are claiming is indeed false and deceptive--just like the fireworks.

Inside An RTA's Mind

This seems pretty typical of the response of most in YTB. Are Steve Mencik and I the only ones who see the flaws in this type of thinking?  And this did not even come from one of my blog posts!

On August 18th, 2008 at 6:24 pm Chris G said

I would like to apologize to all the traditional travel agents out there. I have been a MLM junkie and have been a threat to your business. I have been in YTB since July 2006. I have currently have a massive downline of 4 RTAs (I used to have 6, but 2 quit) and 11 Reps (Reps can join for free in case anyone didn?t know). None of these RTA?s or Reps have been motivated to do anything. I have shown the business to maybe 25 people. I know, I?m such a recruiting machine. I have also booked a whopping total of $172.60 in travel commissions. I know, I know, I should be ashamed of my greed. Most of these bookings have been from family and friends, but also a handful of strangers who found my travel site on the internet. Most of the bookings have been with flights, hotels, rental car and an occasional extra like honeymoon registry or tour. I work a full time j.o.b, go to school and enjoy working my business part time. Even if YTB didn?t have the marketing company, I would still purchase the travel site, even if I knew I didn?t have a snowballs chance of making a lot of money. I guess if I give up my YTB site and if myself, my family and friends book through a traditional travel agent, they will share their commissions, bonuses, tax deductions, benefits and more, cool.

On August 18th, 2008 at 9:38 pm

Chris,
The small amount of commission that goes to you or any other YTB or other MLM agent is not the point. You are ?working? a business part-time. You have spent approximately $450 to sign up, and another approximately $1200 in monthly fees to collect $172.60 in commission. Quit now, promise me you won?t go into another MLM, send me a check for $500 for this advice, and you?ll only lose $500 over the next two years, instead of the almost $1500 you lost over the last 2 years. What a bargain! I?m saving you $1000 and you don?t have to do anything at all!

You said, ?Even if YTB didn?t have the marketing company, I would still purchase the travel site, even if I knew I didn?t have a snowballs chance of making a lot of money.? Why would you purposely get into a business in which you knew you would lose money? Are you one of those people that P.T. Barnum talked about?

Apparently you don?t understand that traditional travel agents are not concerned that you are ?stealing? our business. We are more concerned that by pretending to be travel agents, you are going to damage our reputation as people that know the products we sell, and have the experience to give people expert advice on which product is best for them. People that are going to book online aren?t going to come to us anyway. They will go to Expedia, Travelocity or a host of other places, including the YTB sites. Just remember, if you book your trip online, you?re on your own.

If you are really serious about having a part-time travel business, there are host agencies that will give you an 80/20 split on commissions instead of the 60/40 split that YTB gives you. Some of them charge no monthly or annual fees. Some of them give you a website just like YTB?s for free. They also provide true travel agent training, not the CRTA recruiting training.

To get what few travel benefits there are, you will have to earn them. You?ll actually have to sell enough to earn $5000 in commissions in a year so you can get your IATAN card, something you?ll never get with YTB, since IATA dropped them.

So, no apology needed. Go ahead and keep giving Coach and company the hard-earned money you earn at your j.o.b.
When you are ready to be a true travel agent, give me a call.

Thanks Von Nickleberry

I got a call this morning from Von Nickelberry (YTB Director and Instructor at the Convention) and I want to publicly thank him for his time and opinions. Surprisingly, we agreed on a number of things; but by the end of the call, we definitely are not on the same side.

Von, is very adamant in his beliefs and his loyalty to YTB. I admire that and I also think he admires my equivalent tenacity on my side of the fence.

I enjoyed the call, and I will be calling him back at some point to continue it. It was refreshing to have a conversation as opposed to a lecture, recruitment pitch, or worse.

Travel Training 101

I recently ran into an interesting question brought up by a fellow poster, and YTB Travel Professional, that caught my attention. The reason it did so was because one of the main things the YTB posters tell us constantly is that their RTA's are TRAVEL TRAINED and that YTB itself and suppliers train them exclusively. You even have Marc Mancini doing training’s for you.

"Hi, I have a teammate who is looking for a part time job in the travel industry to get more experience. Does anyone know any places that will hire in an office (B&M) an inexperienced person who has purchased an online agency? "

If you are so well trained, why would you want a job working in a B&M (the shame..a JOB) to gain more knowledge and experience? Shouldn't you already have had all this from what we are told? I’ve seen a response saying that training is not experience..your right it’s not, but that would also mean that probably 90% of the RTA’s have none of that as well. Also, why would you think that a B&M agency, who’s not affiliated with YTB, would hire you part time/full time/anytime when you have a separate booking engine that would not give them the business?

Now in all fairness, the training you all claim to get from suppliers is not really training at all. Showing you a product, is simply that. Training for a real agent would be learning a GDS, geography classes, deciphering airline rules/regulations, exchanges or tour operator procedures. I'm sure many would agree to this fact. I've seen posts where some do not even know that Canada is not part of the US, do not know that Visa’s were required to travel to China, and as yet nobody has answered the question to the difference between MCO and MCO. Since the convention the only "classes" I've seen referred to were about recruiting (Build Your Biz the Christian Way & Building Momentum through Travel Parties). When are the “Geography 101” or Customer Service 102” classes?

I googled YTB Travel Training and majority of what I got was..you guessed it...recruitment training. Shouldn’t travel training be MANDATORY and not OPTIONAL for you to become an RTA? Especially for those who do not simply want to be a website, but want to jump on in and actually assist customers. With all the emphasis on the lawsuit saying recruiting is what all your about, you'd think someone would wise up and actually start pushing the Travel Training Part.

Get into heaven for only $495 and $50.00 per month!

When I was a little kid, I used to get God and Santa Claus mixed up. They both had a beard. They both got talked about a lot around Christmas. They both gave some kind of gifts. They both lived far away. And you had to be really good or you got into a lot of trouble with both of them. They both knew exactly what you were doing all the time.

Now that I am a grown up, I don’t get the two confused any more. So I am perplexed as to why so many people seem to have YTB mixed up with God.

Ever since the crap hit the fan in California, we’ve seen a staggering number of posts, all claiming that even through the State of California, the State of Illinois, the Better Business Bureau, and a raft of other organizations all seem to be having some trouble with the way YTB runs its business, God himself is still firmly behind the wheel.

Let me show you a couple of examples of things we’ve seen posted this week by YTB members.

“It is a rock solid company with the favor of God upon it”

And this...

“There are so many people out there who want and NEED financial
FREEDOM... how can we not stay focused on the task God has given us?”

And my favorite...

“This company is no different than Jesus. He was ridiculed, scorned,
talked about and everything else. So is YTB. But being built on the
foundation of God's principles I truly believe that God has His hands on
this company”

There are many more, but I think you get the point.If, in fact, YTB is the honorable company they would all like us to believe, then why the desperate attempt to make us believe that the big man upstairs is behind the whole thing? Why can’t this company and their members survive on their own merit, without using God as their celebrity endorsement?

I just learned that YTB actually had a class at their most recent convention about how to use God to recruit, and how much YTB is just like God! I found this on a YTBer's blog.

"My First class was with Level 2 Director Von Nickleberry. Entilted "The Believer and YTB; Build Your Biz the Christian Way". Von shared his testimony interwoven in showing the siilarities of network marketing and the creation of the early church. He shared how it is possible foe Beleivers to be successful in Network Marketing. "

No more having to worry about how to get into heaven. You can now buy your way in just by joining YTB. All major credit card accepted.

What A Difference 4 Years Makes (NOT!)

I just found this old article from Travel Trade. The more things change the more they stay the same. Same ploys, same tactics. I see that Carnival was still a staunch supporter way back then! Maybe things will begin to change.

April, 2004
Travel Trade

YTB Grows With Confab, Personal Web Site Ads

By John Stone

Travel agent readers of Travel Trade in the Southeast in recent days have reported a visible increase of recruitment activity among representatives of YTB Travel, especially in Florida, Georgia and South Carolina.

The current campaign was climaxed by the company’s first YTB agent network trade show in Orlando last weekend.

Three Subsidiaries

YTB, whose parent company is YTB International, based in Englewood Cliffs, NJ, has three subsidiary business groups including YourTravelBiz.com, REZconnect Technologies Inc., and YTB Travel Network. Some of the company’s travel agency brands include Your Travel Biz, YTBnet.com, Travel Network, Global Travel Network and YourTravelBiz.com, among others.

Key promotional messages communicated by YTB to prospective members include the opportunity to “become your own travel agent” and to “travel the way travel professionals do.” The organization offers its primary earnings opportunities based on the ability of YTB members to attract other people to become members.

People who join as new YTB members are called “RTAs,” for “referral travel agents,” and among the possible layered clusters of members surrounding a YTB recruitment representative are such designated groups as “the first team,” “the power team” and “the dream team.”

Cards available for members are displayed on some of YTB’s recruitment pages. They include YTB’s own agent card with the member’s photo on it; a CLIA member card (the sample card has a picture of CLIA training director Tom Cogan), and an IATAN card, which YTB correctly notes requires qualifying sales levels to obtain.

The company operates multiple Web sites, most designed to recruit industry newcomers to become YTB travel agents and then recruit others to follow them into the network. Local representatives of YTB operate their own Web sites, under their individual business names, such as “Travel Closeouts,” “K and J Vacations” or “Partnor Travel.”

Last month YTB’s parent company, which officially changed its umbrella name from REZconnect to YTB International after the two companies merged on Dec. 8, 2004, reported net losses of $248,530 for 2004, based on net revenues of $3.8 million (Travel Trade, April 25).

Among the notable recent YTB recruitment activities were the following:

Over the weekend of April 29-30, the company hosted its “First Annual YTB Travel Network Funshine Trade Show and Conference” at the Wyndham Palace Resort and Spa in Lake Buena Vista, FL, in greater Orlando.

The event, according to a Travel Trade agent reader in attendance, attracted about 500 attendees, most of whom attended day sessions during either the Friday or Saturday all-day schedule. Most, however, were not visible in the hotel as overnight guests.

Several of the YTB Orlando attendees displayed magnetic signs on the doors of their vehicles in the Wyndham Palace parking lot publicly announcing the name of their YTB travel agency.

Cocktail Party

A weekly networking cocktail party is hosted at Orlando area hotels by YTB representative Scott Bender. Bender’s individual company is named Travel Closeouts and has its own Web site.

An invitation ad for the networking event on Bender’s site says, “Great business opportunity — Travel like a travel agent. Why pay retail for travel when you can pay wholesale? Find out more!”

Professional singles or couples meet at the parties to make new business or social contacts and, in the process, hear about how to become their own YTB travel agent.

Bender was previously an official in an airline ticket consolidator company, based in Orlando, called Airline Reservations Network.

According to a spokesman for the Airlines Reporting Corp., Airline Reservations Network and its affiliated company, Royale Vacations & Cruises, were subsidiaries of Royale Marketing Inc. The parent company held an ARC number (number 10510113) that was voluntarily deleted from the ARC system in March 2001.

Jim Sloan, a YTB rep in Flowery Branch, GA, in mid-April invited online visitors to a free seminar in the Gainesville, GA, Civic Center at which attendees heard about how to become a YTB agent from national YTB Travel & Cruises president Scott Tomer.

YTB meetings are sometimes promoted on the “meetup.com” Web site visited by small business entrepreneurs. Individuals unable to attend YTB gatherings have other ways to connect with a YTB recruiter.

ICQ Interest Groups, for example, is a Web site for personal classified ads in which people search for other people they would like to meet. Three current listings show a 37-year-old male from Texas, a 31-year-old male from Maryland and a 34 year-old female from Florida, and all are YTB agents with a similar message on their personal page.

The young lady from Florida describes herself as interested in “architecture, photography, music, Web design, video data...vacations, travel advice, romance, relationships, dreams and other interests.” Later she says, “I am an RTA (referring travel agent) for YTB Travel & Cruises. Want to have fun, earn extra money, save on travel and write it off on your taxes?”

The lady provides her Web site address for people to respond.

According to YTB recruitment information on the Internet, upcoming membership seminars, involving recruiters and membership candidates but not suppliers, are scheduled for May 7 in Memphis, TN and for June 4 in Richmond, VA.

_____

Industry Reaction to YTB:

Caution and Non-Awareness

Travel Trade last week sought reaction from national officials of CLIA and Florida officials of ASTA to the step-up in recruitment activity at YTB Travel.

“It is quite complex,” said CLIA executive vice president Bob Sharak about YTB. “If an agency has a host agent with outside agents model, and they are maintaining the model with part-time, psuedo or quasi-agents, ethically I don’t think I like the business.

“I don’t like the idea of marketing the CLIA cards for the sake of the discounts,” he added. “But it is hard to police. There are a handful of these guys I watch closely. I go to cruise lines to ask, ‘What are your travel agent rate bookings for this group?’ A couple of these are not around now. But I have to be careful. If it’s not illegal, what do you do? I can’t terminate someone without cause. It is quite frustrating.”

Jan Hammond, ASTA’s Florida area director and an agent at Sixth Star Travel in Ft. Lauderdale, said she had not yet heard of YTB, but plans to look into them. She was asked whether ASTA is making efforts as aggressively as YTB in Florida to attract new agents to the business.

“We’ve held the ASTA World Congress for 76 years and it’s been open to non-members,” said Hammond. “From April 7-9 we hosted the ASTA Cruisefest in Miami, and not even half of the attendees were members of ASTA or NACTA. Through the trade show and other sources, we estimated between 1,200 and 1,500 agents attended. So we are doing things all the time to attract new members.”

Gerry Gregorian, the ASTA chapter president based in Port St. Lucie, FL, said she plans to check with the Florida Department of Consumer Affairs to see if there are any complaints about YTB.

Travel Trade spoke to J.R. Kelly, the Florida consumer affairs department director. “We have not yet received any complaints about YTB Travel,” he said. “But we will check to see if they are properly registered.”

A Florida Seller of Travel number is listed on some of YTB Travel’s voluminous Web site pages.

_____


What’s a GDS???

According to the Travel Trade agent reader attending last week’s YTB trade show, there was an apparent lack of industry experience among several of the agents he spoke to at the event.

“I asked some agents whether they specialized in escorted travel bookings or FITs and was asked back, ‘What’s an FIT?,’” said the agent. “I asked others whether they work on a Web-based booking system or are connected to a GDS, and they asked, ‘What’s a GDS?’”

“Some also weren’t sure about what their commission and override programs are,” said the Travel Trade reader.

One attraction was key to the event. Free trip prizes were provided by a list of major exhibitor suppliers. The agent said many trips were given away, and many suppliers participated in the prize pool.

A list of suppliers for the Orlando show, listed on a YTB Funshine Trade Show invitation found at www.grouptravelmasters.citymax.com, included, in alphabetical order: Apple Vacations, Carnival Cruise Lines, Central Holidays, Funjet Vacations, Gray Line of Alaska, Hertz Corp., Holland America Line, Norwegian Cruise Line, Royal Caribbean International, Sandals & Beaches Resorts, Silversea Cruises, Trade Wind Tours and World Choice Travel, a division of Travelocity.

Correcting The Wrongs

Recently, Doug Baughknight had a very thought provoking blog entry where he discussed why an industry (us) is coming down on their own (Mancini and Davidoff) fir trying to wright what we perceive as being wrong (YTB).

Maybe Doug is onto something here. As anyone who has read this blog for a while knows, I do feel that there likely is some neutral territory for MLM and TTA.  I guess the issue is just finding it.

I am one of the critics of both Mancini and the Davidoffs. On the surface it looks like they sold out. Perhaps they did--we will never know. But if indeed they are seeing a future for YTB, maybe it is time for them to inform the rest of the world, and not via a sound bite for an article.

The issue I see is that we have been down this road many times. YTB tends to be reactionary. They skirted the IATAN regulations and it bit them in the ass. They shrugged the IOC rules for Olympic tickets and it bit them in the ass. They laughed at the CA Attorney General and it bit them in the ass. It seems that YTB is deeply seated in the MLM model and not travel. Why should the TTAs assume this is just not another way to buy legitimacy? They bought a cover to the Saturday Evening Post, why not hire the Davidoffs?

Maybe if YTB just for once decided to do something to enhance their "travel" biz, it might go a long way. Maybe have someone other than Directors and Circle of Champion members teach the Certified Referring Travel Agent traingin curriculum. Maybe encourage people to get the training and not the credential. Maybe approach the trade press and admit that they have a PR and perception problem and want to work to improve it.

All YTB has done in the last several years has come off looking like some dimented Dr. Evil in an Austin Powers remake. They want to sell "billions" and be the "biggest in the world". Their motto has been "we are YTB we make the rules, we don't follow them." Their senior management has NO travel industry background. Their Board has NO travel industry background. And very few in the call center have a travel industry background. And very few in the field have a travel industry background. If I had to guess, this supposed #26 travel company, might have 500 out of 438,000 people that have a background in travel. I would also bet that 300,000+ have prior MLM experience and are prepared to move on when the moment is right.  So why are they a travel company again?

Uhm...Excuse Me Coach? I Have A Few Questions

NOTE: This post was intended to run on Tuesday, August 5, 2008. But now that the Convention is over, it is still appropriate and I wonder if any Reps or RTAs might have had the gumption to ask some hard questions.

To those that are headed to the Convention later this week and are seriously interested in selling travel, I offer these 14 questions for Coach.

1. Are there any plans to have the Certified Referring Travel Agent Training (CRTA) classes taught by anyone with some certifiable travel experience?
2. What is happening to my clients who are traveling August 6-10 since YTB has shut down the home office to allow all employees to come to St. Louis?
3. Do you feel that $8 million was really necessary for a 3 day centerpiece?
4. Why is the donation of Lady Liberty now in the hands of Beryl-Martin? I thought this was great publicity for YTB.
5. How many RTA websites are there right now in YTB? Kim was unable to figure it out with Nadine Godwin, I figured you might know.
6. Will Dr. Bob Seligman be addressing the convention?
   
7. Is it true that you, Kim, and Scott are the owners of Beryl-Martin Printing?
8. Of the reported 22,000 in attendance, how many Reps and RTAs (not spouses, guests, families and friends) are there?
9. When will we be able to concentrate on selling travel and being recognized as a legitimate company? It is tiring having to defend YTB all the time and Kim said he was working on "legitimizing" YTB last year. How is that coming along?
10. What are your plans for credentials now that IATAN has refused to grant us accreditation and it seems like CLIA is upping the requirments significantly?
11. Are there any plans to offer a more competitive commission split to be comparable to the majority of the host travel agencies in operation?
12. When will our finances be up to snuff to be admitted to one of the Big Board exchanges?
13. What really happened with Bob Dickinson?
14. What really happened with Ted Lindauer?
    

While these are somewhat tongue in cheek, each question does indeed pose a legitimate concern--or at least ought to pose a legitimate concern for anyone who is serious about doing business with YTB.

This Week's Top 5

Wanna know what everyone is reading?  Here are the week's top 5 blog posts:

5. Dark Clouds Roll In
4. Update On Federal Suit
3. Well The Locals Love Like REALLY Don't Like YTB Either
2. False Claims Abound
and the number one blog post of the week........

1. Well, The Truth Comes Out

Sporadic Posting Ahead

Just a heads up that I am not sure how updated this blog will be for the next week or so. I had emergency knee surgery this morning and am just getting used to hobbling around in an immobilizer.

I will try, but we have some already scheduled for next week and maybe Kate can pick up the slack. I know you like her!

The Dark Clouds Roll In

Well, the Coach talks a good talk, but he seems to have difficulty on the walk. I listened to a conference call a few weeks ago and he was whooping it up about the 2nd Quarter Results. He was so excited because they were "so good" that he was going to release them early and just before the convention. Well, Jerry Brown stole his thunder there I suppose.

Well, they are out and it appears, either he can't walk the walk, or does not realize that parentheses on a balance sheet are not good. Dashes mean negative, and red is not a good color!  Here are some initial highlights and key figures:

• The bottom line is YTB lost $199,577 in the 2nd quarter which increased its year to date loss to just shy of $4 million. It is interesting to note that this time last year, the report showed an income of $1.6 million for the quarter and only a $505K loss for the year to date.  Seems like YTB is sliding to me.
• Travel sales are WAY off.  Year to date they have paid out $14.1M in commissions. That will put them near $28.2M for the year.   At an overall 10% commission that places sales in the neighborhood of $282M.  Seems a long shot from the $411M they claimed to Travel Weekly. ANd certainly not on the way to a BILLION dollars for 2006 2007 2008.  $282M puts them in the mid 30s spot on Travel Weekly, but my guess is that they slide much further (while others grow) if they make it at all.
  
• This year they have cash on hand of $632K and last year there was over $1 million.
• They disclosed that an acquisition did not go through. This is apparently the highly touted American Destinations Inc. acquisition--could I have been correct? (Caution, this is THE post, hide your children and protect their eyes the photo is still there!)
  
• Also as expected, the RTAs are leaving at a record pace. This quarter, they sold 23,296 sites (last year they sold 34, 309 so recruiting is off 32%). But 30,638 quit. So for every new site sold, 3/4 of a site left.  And on a six month basis, they are still losing more than they are selling. But, this was already predicted and expected back in May.
  
• Canada appears to be a complete bust and represents only 3% of their income and interestingly enough, Bermuda and the Bahamas are not reported at all. I wonder if they produced ANY revenue?
• The number of RTAs has only increased 30% year over year, yet the administrative expenses (salaries, etc.) have increased  100% from $13M to $26M. Seems the overhead may end up killing them.
• And of course, there is absolutely no surprise where YTB makes their money. For the quarter, in first place is website rental and sign up fees at 74.5%, in a very distant second place is income from travel at 19.7%, and bringing up the rear is training materials at 5.1%. I will say that it is slightly better than last quarter as their 6 month picture is 76.9%, 16.2%, and 6.9% respectively. Not sure those numbers will be enough to convince Jerry Brown et al, but it may be worth a try.
  

And let's keep in mind that these reflect only through June 30, 2008. They do not take into account any of the issues surrounding the recent events from California, Illinois and the Class Action suit. Nor does it include the expense of the foam prop. Speaking of which, it is strange how it has all of a sudden been devalued from $8M to $1.8M. Some things make you go "Hmmmm."

I did notice that YTB included some deferred revenue in the filing to indicate sales made that have not been paid commission. If they are accurate in this number and it is only for unpaid commissions, the sales are even further off the mark. On Page 6 it shows the "Deferred Revenue" as defined on Page 9 to be $2.6 Million. This does not seem to be a large number. That shows that each RTA has commissions owed (at some point) of about $12.

I imagine that the steady decline of RTAs in the last three quarters will only increase exponentially in the 3rd quarter. I cannot imagine how people can sell the program with the black cloud of $125M in lawsuits hanging overhead and the probability of several more.

All in all, seems like the ship is sinking and I wonder what this dismal report will do the the stock that has already taken a HUGE hit over the last week.

Well The Locals Love Like REALLY Don't Like YTB Either

This article is from a local paper called The Telegraph in Alton, Illinois. The article essentially rehashes the BBB complaints that are mounting against YTB.  But that is not the real story here.

What I found to be very interesting was the tone of the comments from the locals. Apparently, YTB is as well liked in their hometown as they are elsewhere.

Lloyd Tomer has stole money off of hard working metro east residents for years. 1st, Primerica, then something else, now this, all in the name of god. He's unbelievable. It's about time this piece of trash was held accountable by SOMEBODY! How do you sleep at night Lloyd, Scott and KIM? I'ts even more unbelievable the number of people who fall for it. It's sad. Better put those building complex plans on hold, Lloyd. Judgement day might be coming. ALthough I'm sure you'll hop in your Lexus and move on to other innocent people in other states.

I worked for YTB a couple years ago in Edwardsville.
I worked there for a couple weeks but after being assigned to "collections" for one day, I had to quit.
I went home that day, and wrote my letter of resignation. I told them I did not want to be associated with a company and would rather be broke than paid by them.
SAD SAD STORY

I went to a YTB meeting and the 1st thing out of the man's mouth was "this is a get rich quick company" There is no such thing is get rich quick. I hope they shut YTB DOWN......We don't need a travel company in Wood River. We need something for the children...

OK all you Pro YTB freaks, get a CLUE. I was on the "inside" of that company for a long long time. I left because. I got sick of all the lies and deceit from the upper "Team Members". Those who you who think you know the company so well, look at all the Tomers and Sorensens on the payroll. The company reeks of nepotism. The company has lost their IATAN status. If you are a real "Travel Pro" you will know what that means. To those who don't, it means that YTB is not a real travel agency. They lost it because of their deceitful ways. Also, I worked several conventions where it was "required" that we be there and work long hours. We were never given gas money. Oh and I was there when those firings happened, and it did happen like it was told. That company deserved to be shut down and soon!!!

Yes Amac it's a great company until you get laid off/fired like so many others these past few months. They have fired people on the spot w/ no reasons given. You wont even see it coming. Unless you are high on the totem poll I'd watch my back if I were you. I would almost put money on the fact that as soon as they find out who these employees are posting on this site they get terminated too. But like the chick who got tanked and quit this weekend said you can get a min wage job anywhere lol.

I thought it was insightful and you can read it here--please read the comments and let's discuss here!

False Claims Abound

Please pay attention around minute mark 2:00. You can earn 60% of of everything that is booked on your website!  Not misleading at all huh?

And I also believe this is the same guy that was talking about his boogers before! What was his name...Rufus!

Well The Truth Comes Out

Looks like old Coach is trying to pull a fast one on the troops. The Saturday Evening Post hoax was nothing more than pumping his own ego. Here is the cover of the real edition. Don't believe me? Go to your local bookstore!

The depths of this guy's ego knows no bounds!

And here is his version:

Blockbuster Convention Announcements

We heard the hype and now here is the reality. Here are four of the blockbuster announcements from the convention:

1. There is an enhanced Rep site. For a monthly fee of only $14.95, you'll gain access to one of the most powerful recruiting tools in YTB. Not only will prospects be impressed by the innovative design, they'll be able to see what YTB is all about through the Media Center!
2. You can buy a DVD. In a slowing economy where the price of gas is nearly $4 a gallon, many Americans are hurting financially. Give them an answer to their needs with this informative DVD, which explains why they should look into owning their own business with YTB and "Recession-Proof" their income! Available soon from your Back Office!
3. The bonuses are being tweaked. Here at YTB, we want to give you every opportunity to succeed! That's why during this year's convention, we've enacted this one-time only Reset Bonus! Basically, everyone will be working on their first set of six towards a $1,000 Leadership Bonus. Don't worry, you won't lose anyone, you just won't have to worry about fall-off on the ones you've already earned a bonus for.
4. Coach was in a magazine. One of the most prestigious magazines in the country has chosen Coach to be on the cover! The Saturday Evening Post, the longest running continually published magazine in the history of the United States, has selected Coach to be on their 2008 Special August edition. The magazine features a four-page article on Coach's life and gives you an inside look behind his vision to create 10,000 millionaires. Available soon in your Back Office. Price: $4 each.

Whole lot of travel info out there. But let me comment on a few items.

I thought the current websites were the best in the industry. Now they want to take a "free" opportunity and charge $14.95 per month. And this one is good for your "prospects" to see about YTB. I think prospects can see enough about YTB by googling them to be honest.And this seems like it might more clearly define YTB as a pyramid....taking money for recruiting only.

Buy a DVD and recruit more people. Instill the fear of the recession in them and learn how to bilk them for $449 and $49.95 a month. And if you are good, you can sell them the upgraded website.

The bonuses are being reset. This is a key point. In the old system if you had a power team of 6 people and two dropped out, you needed to recruit 2 to reclaim that status and then recruit 6 more to get your next bonus. They are resetting this so that if 2 drop out, you do not need to replace them with 8 you can just get 6. This is damage control. With the news this past week, there will be plenty of people dropping out. And when they drop, the income of the upline is affected and then they will drop. That's the way the pyramid crumbles. But by not requiring a replacement of the drop outs, they are hopefully holding onto some of the upline. Very shrewd on the part of YTB. I wonder how many of the Reps will get it?

And Coach was on a magazine. While I have not seen the magazine yet in the stores, I am not wondering if it was not a paid cover. YTB refers to it as a "Special" edition. Perhaps they did a special cover and inserted the story in the magazine for the convention. Anyhow, you can buy it for $4. If anyone has seen the August issue in a market other than St. Louis, let me know who is on the cover. My suspicions are now leaning toward a paid cover and story. But I guess if you can't get good press you might as well buy it!

So, where was all the wonderful travel training and the travel announcements? If you want to see a video of the convention, it is accessible in the new Rep site link above. Or click here.

Update On Federal Suit

According to Travel Weekly, this suit was filed for $100 million dollars.  Wow, that is $125 million in less than 5 days.

Two former referring travel agents for YTB Travel Network launched a class-action lawsuit in U.S. District Court in East St. Louis, Ill., seeking more than $100 million in actual damages for themselves and others who invested in the YTB programs.

They claim they and the members of their class suffered financial losses because YTB International and its divisions operated an illegal pyramid scheme.

The lead plaintiffs are Faye Morrison of St. Louis and Kwame Thompson of Atlanta. One of their attorneys, Christian Montroy, said that because the lawsuit is so new, it is uncertain how many plaintiffs are in the class but “certainly more than 1,000.” He said two more plaintiffs will be added to the suit in the next week.

YTB Withdraws Application For AMEX Listing

In light of the recent lawsuits and investigations, YTB has withdrawn its application to the AMEX.  I imagine it was more in lines of a request that they withdraw.