How Long Will The Honeymoon Last?

The divorce rate in the US is still at about 50% and I suspect the "divorce rate" in travel is about the same. Are suppliers on the verge of divorcing MLM and Card Mill agencies? I think so!

Carnival Cruise Lines just filed an amendment to their 1st Quarter 2008 Earnings Estimates with the SEC a few days ago. While Carnival is grappling with fuel costs just as every other cruise line, they also listed another culprit--softness in onboard spending. From Travel Trade:

Carnival Corp. reduced its first-quarter profit estimate because of higher fuel costs and "softness" in onboard spending, according to documents the company filed Tuesday with the US Securities and Exchange Commission.

Now as anyone who has been in the industry for a while knows, the amount of commission has been dwindling across all brands. The suppliers are implementing these vague "non-commissionable" fees. Carnival has seemingly led the pack in these and also in cutting the cruise fare in order to bring cruising to the masses.

There was a day when all Carnival commissions were at least three digits to the left of the decimal. Now, with the reduction of the commissionable fares and the drop in prices, many commission checks are under $100. Obviously this should be a big savings to Carnival; but is it?

The cruise lines also realize the huge importance of onboard revenue. Look at the newer ships coming online. The ports of call are becoming almost secondary when you can ice skate, box, surf, eat at Johnny Rockets, relax in a suspended hot tub, shop, dine, gamble, drink and be entertained--all on board one ship.*** The sea days are becoming more frequent, and the hours in ports are becoming shorter. All this is being done in the name of increasing onboard revenue. I know when I cruise with my three kids, I can celebrate if my tab at the end of the week is less than $1000.

So, with all the changes to hold the audience captive, one would not expect "softness". But, it is an issue with Carnival. And what does it have to do with MLM?

Sure MLM is putting people in berths on ships for Carnival, but are they the people Carnival really wants? Seems not. When you price a product so low, you do attract a less affluent crowd. I also suspect that the majority of the MLM business given to the cruise lines is for personal travel--perhaps even on discounted travel. It has been my contention that MLM attracts the downtrodden and those least able to afford a loss in exchange for the promises of riches.

I wonder if these self booking MLM folks are simply taking the cruise because it is the ONLY way they can afford to cruise when you factor in the rebate on their commission? After all, there are 142,000 RTAs and 303,000 Reps in the YTB program alone.

So those people likely do not account for a line wide softness. I know that some actually sell travel to clients. A few, but there are some. I also suspect that with 142,000 RTAs--they are not setting the proper expectation for the client. Cruises are NOT all inclusive, but I suspect that in the land of RTAs they are sold as such. So, when a client boards and is asked for a credit card, it might come as a shock. On top of it, they need to pay for booze, excursions, onboard shopping, gambling, some food, tipping, etc. For the client that is cruising for the first time, this is a shocker!

Given the premise that MLM draws from the pool of people least able to afford a loss, one wonders where the true clients they book are being pulled from. Most likely their own circle of influence (per the MLM Mantra) which is indeed filled with those least able to afford the luxury of cruising.

Are they going to come back and buy more travel? Maybe. But I bet it is not on any regular basis. Is Carnival getting a good deal here? Doubtful.

There is a fixed cost to run a ship. When they have reduced the fares below that cost and are banking on onboard revenue to make up the difference, the odds are worse than in their casinos.

In the case of YTB, they are claiming to have sold $500M in travel in 2007. I have heard that nearly 40% of that is with Carnival Cruise Lines. So Carnival has likely sold nearly a quarter billion dollars at near cost with very little chance of making it up in onboard revenue. I would love to see the OBR reports for the Birthday Bash cruise. My guess is that they are dismal and I hope that Gerry Cahill takes a look at them.

Again, MLM is likely doing a disservice to the clients. Clients are expecting one thing and the RTAs are merely selling the product with minimal knowledge or in some cases ethics all in the hopes of building the downline or earning the Director's Ring. Just go to my website. If you have a problem, call Carnival. Remember, a person at YTB assured me that Carnival sailed from Denver back in November during the sale.

Cheap is as cheap gets. Carnival is good product and it has come a long way over the years. They have been a HUGE friend to the agency community with special thanks to Vicki Freed. Travel Agents have consistently found the right client for the right ship for the right itinerary. We were more than order takers. We directed the clients to particular ships (and if it was not a CCL ship, so be it) but it was done in the interest of the client. Now it seems Carnival is content to pay 16% commission to people who merely point the client right back to Carnival.

Gerry Cahill is beginning to wake up I think; and as I said in a previous post, there will be some changes coming down this year. Carnival is discovering that the clients are pinching pennies harder than ever before and a good number of those penny pinchers are coming from the MLM pipeline!

MLM is not good for the industry and slowly, I think the suppliers are beginning to see that.

Hey, MLMers... what is the difference between a commission check from Carnival Cruise Lines and one from Crystal Cruise Lines? (tune in tomorrow for the answer)

*** This would be a RCCL ship.

A Picture Is Worth 1,000 Words

And A Cool Reception in Canada As Well...

When someone says, "Your reputation precedes you.", it is usually said as a compliment. Well, I am not so sure about that in this instance.

This article, titled Here Comes YTB & Everyone Can Be A Travel Agent is about a week old, but it does indicate that the welcome mat in Canada might have some slippery spots as well!

Here is what some of our industry comrades to the North had to say:

• ACTA President Christiane Théberge says the association “will not work with anyone who does not adhere to professional standards. We are promoting the integrity of the profession and the value of trained travel agents.”
• At CSTAR, President Bruce Bishins says the multi-level model wouldn’t bother him, if the objective was to recruit people with a genuine wish to become professional travel agents. “The wider the channel, the better the channel: If the intent is to bring on people and make them professional, I don’t have a problem with the MLM model. But I’m not in favour of any business model that seeks to make consumers agents themselves. Where I find the model disturbing…it doesn’t appeal to those seeking to be professional travel agents.”
• At the Canadian Institute of Travel Counsellors, President Steve Gillick also sees suppliers as being the key to fighting an onslaught of undereducated travel sellers. “One can only hope that these suppliers take some responsibility and support the travel industry in a more proactive way than they have been doing up to now. There are methods of determining whether an agent ID card is legitimate or not. Too many suppliers, unfortunately, drop the ball when it comes to weeding out the legitimate professional travel counsellors from those who are not seriously selling travel services but instead, are looking for industry freebies.”

Boy, it seems that as YTB cruises on around the globe, they are about as welcome as a Norwalk Virus eh?!

The Rep "Opportunity" --A Fairy Tale

At the YTB Founder's Tour last week, we were given a spreadsheet on the "performance" of the reps over 2007. The following are some FACTS from that sheet.

• There are a total of 305,033 reps in the program (246,837 of them sold nothing in 2007)
• There are 58,218 active reps in the program (active is defined as having sold something in 2007)
• Of the active reps (not directors or team leaders), 77.17% earned an average of $90.32 last year
• Of the total active reps, .003% earned more than $21,000 (on average) for the year. Yes, there is a decimal point and two zeros before the 3.
  
• The average income of all reps (including directors et al) was $297.25 for the year

While there are more numbers to be extrapolated from this document, I find the whole presentation unconscionable. True, they disclosed the numbers and were very clear that they were NOT income projections. But Scott Tomer and his 30 or so directors preached this program to nearly 700 people knowing full well (from their own reports) that not one of the people in the room stood a chance of making any type of reasonable income from this program.

Let me reiterate... .003% of the crowd of 700 has a chance of earning more than $21,000. Do the math, that means that not one person in that room will succeed with YTB. Now of course the Tomers and the upline will do fine, but out of 700 people-- not one.

I am not sure why more people do not realize this. The numbers were handed to everyone on a silver platter. But I guess they were caught up in the message and the preaching from the pulpit. It amazes me that most of the people in the room were already IN the program and that 99% of them probably fall into the $90.32 annual income bracket. They were "promised" riches and are walking away with pennies yet they still drink the kool-aid. They are buying into the sermon, they are looking at the very few at the top of this pyramid and thinking they can have the same. Reality bites--it is just not going to happen!

Many tell me that if you don't put effort in you will not succeed. I completely agree with that. My question is why are so few people succeeding with YTB? Why is it that YTB attracts so many people that fail? Referring to the sheet, almost 81% of the reps earned nothing! What is the attraction? False promises? Smoke? Mirrors?

The math does not support the story. The history does not support the story. Sorry folks, it just is not going to work that way!

Is Bermuda Pulling The Welcome Mat?

Well, it certainly did not take the Bermudian media long to sniff out a scam. In today's Bermuda Sun, what do we find but a public warning about joining up. While it is 66 degrees in Hamilton today, it seems the reception for YTB is a LOT colder! Some points that I have made for the past 6 months are also repeated here.

• Bermudians hoping to buy into an online travel business being promoted by former Opposition Leader Wayne Furbert are being warned not to expect big profits.
• Mr. Furbert - who plans to launch YTB in Bermuda next month - denied yesterday that the company is a pyramid scheme.
• The Bermuda Sun investigation also revealed that U.S. travel organizations are beginning to back away from YTB, calling it "a card mill" because its agents lack bona fide travel credentials.
• IATAN has taken a similar stance because YTB travel agents do not meet its required standards of working a minimum 20 hours a week or earning a minimum of $5,000 in commissions or salary annually.
• "I've read through the details on the YTB website. The earnings in this scheme aren't for those who sign up. The money is made by the people who sign up other people. It's about making money for a few people at the top of a multi-level organisation.
• Mr. Furbert said he did not want to get into the technicalities of YTB, but said: "This is a legitimate business. It trades on the stock exchange."
• YTB admits that the vast majority of its income is made from the sale of travel websites to agents at $50 per month than it does from actual sales of travel. In a filing with the SEC on late last year, YTB said: "Fees from hosting websites that we offer to home-based representatives make up over 70 per cent of our revenues. While our business model is based primarily on website hosting our various products and services, we do intend to pursue other sources of revenue to lower this percentage."
• YTB went on to state that if there was a "substantial decrease" in the number of websites that it hosts then "our financial condition, results of operation and future growth may be substantially impaired."
• YTB added that its business model could be harmed by possible law changes because it walks a fine line as a multi-level marketing business, and it could fall afoul of laws aimed at pyramid schemes.
• "We are subject to the risk that...our network marketing programme could be found not to be in compliance with applicable laws or regulations."
• Plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people - except perhaps those at the very top of the pyramid - lose their money.

So, finally, YTB is admitting that their business model is on recruiting and that it is unstable. I once tried to purchase a vacation property in Bermuda and the restrictions were onerous. I can't imagine trying to start a business.

The Good Doctor Seligman Exaggerates

In a comment several days ago, someone brought to my attention the fact that there was a new RTA beyond compare. Credentialed out the wazoo by the name of Dr. Bob Seligman, PhD.

Proud to be YTB said...I can't wait to hear how you're going to spin this...
You keep talking and YTB still keeps growing! :)
BTW... if you didn't check this out yet, I suggest you do.

• Dr. Bob Seligman, PhD (& RTA)
• PhD in Economics (Oxford)
• MBA in Finance (Harvard)
• Former Senior VP of Corporate Development for Fox, Inc.
• Reported Directly to Billionaire Barry Dillar(Owner / CEO of Expedia, Inc.)

Listen to the Audio: http://ytbreport.com/Investigate_YTB.php

Now, first off, if you use the prefix "Dr." you do not use the suffix "PhD" and vice versa. This was my first guess that this might be a load of crap. My second observation was that the comment looked like it was cut and pasted from the "doctor's" curriculum vitae, and if he was a direct report to the CEO of Expedia, I would think he would know the correct spelling of his boss's name.

So I listened to the recording and picked up some of his other qualifications:

• Executive Director of the Screenwriter's Guild
• Boeing Executive
• Bank of New York Executive
• General Electric Executive
• New York Life Insurance Executive
• Commander of Special Forces in Viet Nam
• 6 Voluntary Tours of Duty in Viet Nam
• Spy
• Government Contractor who developed the counter terrorism unit for the US Secret Service

On the call, the presenter said that the good "Doctor" is so humble that he made sure that his credentials were not common knowledge. Hmmm. Now this really intrigued me.

I figured a man with this much under his belt would have some info about him somewhere. One would think that you could find a doctoral thesis. A mention in the Screenwriter's Guild history. Maybe a listing on the alumni website for Harvard (yes, I have a friend who has access). Nary a mention of a Seligman at GE, Boeing, 20th Century Fox, Bank of New York, or New York Life.

He is not even listed in the UCLA alumni directory--which I have been told is pretty weak as it is so that is no surprise.

Based on his military record, I am assuming this guy "served" for 6 years in Viet Nam. He claims to have received all of his education after the service (right when he was designing the counter terrorist program for the Secret Service and was a spy...without a college education...uhm, OK whatever...)

But if he did serve in Viet Nam, he could very well be the author of a very interesting document. The name and approximate age matches. If this is the same guy, he forgot to list one of his companies--Phillip Morris. Well, here is a copy of a letter authored by a Robert Seligman which was admitted to court in the United States vs. Phillip Morris suit. This Robert Seligman (and it could be a different person) apparently was concerned about the information on pesticides in their tobacco products getting out and recommends clandestine drop boxes and eliminating any written documents--suggesting a coverup. (I have to say, if this is the same guy, he is a dope. What guy with a spy background would write a letter suggesting that there be no written communication?) Again, not sure if it is the RTA Seligman or not, but it is interesting reading for sure.

So in essence, I am, yet again, calling BS on YTB. A person as credentialed and educated as he says he is HAS to have information out there. Even "Proud to be YTB" has several Google returns. So what is the deal? Is he fabricating the story to YTB? Or is YTB fabricating the story to the Reps and RTAs? Or both? I have no idea, but I am 99.9% sure that this "Doctor" is a complete fabrication. Is it a coincidence that the word Seligman is a German word meaning "blessed man"? But at least he will have one Google hit after this post!

Search engines, alumni directories, company histories, professional "data gatherers" in the Washington, DC area all came up blank except for the tobacco thing.

And as to the Harvard credential, we checked under Robert, Bob, and Bobby and even a few alternate spellings of the last name and zilch came up. They checked records in their business school as well as the others and again zilch!

So, Proud to be YTB challenged me in his comment...."if you didn't check this out yet, I suggest you do.". Well, I did. Now, I offer a challenge to you---document it!

It appears that there is yet another scam artist in the midst of YTB. Perhaps he is spending the weekend with Coach and Phil in the Mansion on the Hill!

PS--Isn't it ironic that the seal of Harvard University says "Veritas". Veritas, from Latin meaning honesty and truthfulness.

Scott Tomer: A Sermon In Maryland

OK, on January 23rd, I ventured over to see the Founders Tour and hear Scott Tomer speak. The irony of the location was not lost on me--it was held in a building that used to be a Church and is located in the shadows of a huge Cathedral (which replaced that Church).

I was not sure to expect a dozen people or a hundred, but when I got there, I was shocked. I am guessing there were close to 800 people in attendance. It seemed like the parking lot was stacked with the high end luxury cars near the front door--interestingly enough, no Cocaine White Bentleys.

The group was primarily Reps and RTAs. When asked for the guests to raise their hands, I am guessing there may have been 40-50. There were approximately 30 Directors there in the front row.

Now Scott is a fantastic speaker, dare I say preacher. I truly enjoyed hearing his thoughts and humor. None of his comments were anything we have not heard from the YTB crowd in the last few months:

• Barry Diller spent $5 billion on Expedia and you can buy the same thing for $500
• Travelocity spends $5 million per week in advertising and we pay that out to you
• YTB was the one company that spotted the trend for travel and the internet back in 2001
• You do not need any education to do our business. I have 2 hours of college education and some people waste 4 years to get where I am
• Our goal is to be a Fortune 500 Company
• The Funshine in Orlando was "the largest travel event in the travel industry"
• With YTB you can go to China with air, hotel and most meals for 9 days for $1500 and we will pay you $200 commission to boot
• This year, YTB paid out $30M in leadership bonuses
• Without you we will fail. With you , we can't be stopped

The entire thing was very revivalistic and preachy. Again, not a surprise. It seemed to me that the purpose of this meeting was not to recruit (since there were so few guests) but to reinvigorate a sales force that may not be producing as well as hoped.

Sure there were many successful people there, but I have to say the vast majority were (just like the RTAs) not earning much (if anything) with YTB. And when your people are not making anything, the pyramid begins to crumble and fall.

Eventually, the pool of candidates for recruiting will dry up and there will be no more commissions to be had on the marketing end--everyone will be getting free websites and booking their own travel. Then honestly if commission is still around, the only earning will be 60% of the commissions earned on their personal travel. It is unsustainable!

The show ended on an impromptu note (although it was completely scripted). When the host director was speaking, Scott was on the side of the room on his way out "on the phone", he goes back to the director and interrupts him with an announcement. "This just in" -- a director in the room had "just" made Level 4 and would receive a $250K bonus. He did not mention it was in stock--might as well let the 800 people believe it is a cash bonus. It was a great moment and very exciting for many I am sure. As to why it was all scripted, as soon as it was announced, the director came up and had a 15 minute speech completely prepared. The speech was replete with the adulations to the Tomers and YTB. Of course there was the pitch to the guests to sign up tonight and tomorrow you too could be one quarter million dollars richer. He went on to encourage people to put it on their credit card and then sell more sites in the first month and get your YTB commission before the bill was even due.

As I said, totally scripted and the purpose--to reinvigorate a stalled sales force. We already know about the earnings on the RTA side, and in tomorrow's post, I will have some very interesting figures on the Rep side.

YTB Is Serious About Training --Finally!

Well, is it finally happening? Is YTB getting serious about selling travel? I know they are requiring sales of $1500 to get your CRTA card now and imagine my delight when I found an actual training site for the Referring Travel Affiliates (their new name).

Finally, a single place where RTAs can go and get travel training. Qualifying clients, product knowledge, geography, routings, popular destinations, attractions, history, cruise ships, cruise lines, charter aircraft, and I imagine even all they could want to know about China and their new Olympic initiative.

The site is "hosted" by two directors and if you check it out, you will see what I mean. Just go to Your RTA Training (www.yourrtatraining.com) and explore.

Tax Advice For The Home Based Travel Agent

The following is from a website called YTB Report. While they do have a disclaimer at the bottom that says the site is "not affiliated with, sanctioned, approved or endorsed by YTB ", it seems to be full of typical cheerleading. Maybe it is a Traverus site in disguise.

But on this site, they are offering tax tips for home based travel agents. While the info is disclaimed, I did show it to my accountant, and after he was done laughing, he handed me a bill for wasting his time! (Not really, but it made for a good point.)

Now, how seriously do you take advice from an "accountant" with an email address at AOL? To further that, one that is slashyourtax at aol? I wonder if there are any auditors that read this blog that might chime in on the applicability of this advice.

But nonetheless, it is interesting.

(Note: This is my disclaimer. The following advice looks shady, ill advised, wrong, and likely illegal to me and my accountant. Heeding it is at your own risk and neither this blog or I will be responsible for your foolish mistakes.)

This comes from a page on the YTB Report site:

THE INTERNET TRAVEL BUSINESS

PERSONAL TAX-SAVINGS

ESTIMATOR PROFILE



The best means for saving taxes for the average American is to operate a home-based business. In fact, if you do not currently operate a home-based business you are over paying your taxes by thousands of dollars each and every year. By operating a home-based business and keeping good books and records, any taxpayer can legally convert a major portion of their non-deductible personal expenses into new tax-deductible business expenses and immediately increase the amount of their hard earned dollars they get to keep each and every year. Dollars that can be converted to personal savings and that can be put to work to build personal wealth for you and your family!

The purpose of this estimator is to help you calculate the amount of annual tax savings you can expect by operating your own home-based business. Properly established and documented, your investment in your own home-based business represents a risk free investment guaranteed by the tax laws passed by Congress and imposed by the IRS!

This estimator was prepared by Accounting & Business Consulting, LLC in order to help you determine the amount of tax savings that the average taxpayer could expect by operating a home-based business. You should note that the estimator is designed to only provide you with an estimate of your annual tax savings. Actual results will vary and depend on the ability of the individual taxpayer to keep, record and document all deductions in accordance with IRS rules and regulations. For more information contact us at:

Accounting and Business Consulting, LLC 3303 West Saginaw, Suite D-1, Lansing, MI 48917 Phone: (517) 321-8600 Fax: (517) 321-0410E-mail: Slashyourtax@aol.com


Print this form below and fill it out to estimate your savings.



WORKSHOP TAX-SAVINGS ESTIMATOR PROFILE


1. Estimate the average amount of money you spend on each of
your children per month. This amount should include spending
money, sport and team fees, camps, eating out including school
lunches, trips to the mall, etc. In other words, all expenses that
are above the amount you pay for normal support such as housing
and meals at home. Record your average amount here: $_________.

Multiply this number by 12 and enter here and below in Question2. $_________.

2. How many children do you have between the ages of 6 and 18?
Enter the number of children here:_________. Multiply the number
of children by the total from question 1 above: $_________ and enter to the right. $_______________

3. Do you and your spouse have cell phone, pagers and PDS’s?
If so, enter your total monthly average expense here: $________.
Multiply this number by 12 and enter to the right. $_______________

4. Do you have a computer that has monthly internet and service
fees? If so, enter your total monthly expense here: $________.
Multiply this number by 12 and enter to the right. $_______________

5. Do you purchase newspapers, magazines, books and on-line
media? If so, enter your total monthly expense here: $________.
Multiply this number by 12 and enter to the right. $_______________

6. Do you like to entertain friends and family members in your home?
Please estimate the cost of one evening of entertaining friends
and family members in your home. $_________. Estimate the
number of times you entertain during the course of the year and
enter that number here _________. Multiply your average cost by
the number of times you entertain during the year and enter
this amount to the right: $_______________

7. Do you like to go out to the movies, sporting events, hunting,
fishing, or other similar activities? What is the average amount
you spend on a day or evening for this activity? Enter the amount
here. $_________. How many day or evening outings do you
participate in, on average, per month? Enter the number here _______.
Multiply this number by 12 _________ and multiply this number by
your average cost per event. Enter this amount to the right: $_______________

8. How many miles do you think you drive per year on average?
Enter your estimated mileage per year here _________.
Multiply this number by 65% (.65)_________. This number
represents the number of miles the average person can
convert from non-deductible personal miles to tax deductible
business miles. Multiply this number by 48.5 cents and enter to the right: $_______________

9. How many miles do you think your spouse drives per year
on average? Enter your spouse’s estimated mileage per year
here _________. Multiply this number by 65% (.65)_________.
This number represents the number of miles the average person
can convert from non-deductible personal miles to tax deductible
business miles. Multiply this number by 48.5 cents and enter to the right: $_______________

10. Do you pay for all or part of your current health insurance
costs? If yes, enter your annual cost of health insurance
here $_________. Do you pay any out-of-pocket health care
expenses for your family, such as co-payments, deductibles, or
drug costs not covered by insurance? Enter this number
here $_________. Does your family have any dental expenses,
including braces not covered by insurance? Enter this number
here $_________. Do you have any vision expenses associated with
eye care, such as contacts, glasses, etc.? Enter this number
here $_________ Add up all of your out-of-pocket medical costs
and enter it to the right: $_______________

11. Do you own a boat, camper, motor home or other recreational
vehicles? Estimate your annual operating expenses, including
park or parking fees, annual maintenance costs, fuel costs, etc.
Enter your annual estimated expenses to the right: $_______________

12. Do you purchase season tickets to sporting events, Broadway
plays, or other events? If yes, then enter the amount to the right: $_______________

13. Do you purchase gifts or other items for your spouse
during the year that exceed $500? If yes, please enter $500 to the right: $_______________

14. Add up all the numbers in the far right-hand columns and
enter the total to the right: $_______________

The number you have just entered is the estimated amount of new tax deductions
you can expect annually by operating a home-based business. Now calculate the
average amount of actual tax savings you could expect these deductio ns to generate
on your actual tax return. Multiply the total in No. 14 by 30% (.30) and enter this
amount to the right. This number represents your estimated annual tax savings: $_______________

Do You Kiss Your Mother With That Mouth?

The subject line read, "whats the fuck yor problem??" I could not use that as a post title, but there you have it! Anyhow, I received the following from a prospective RTA over the weekend and wanted to share the original and my response. In light of Martin Luther King, Jr. Day (and his beliefs), I decided to hold off on posting this till today.

My friend just sent me your bullshit artical.
I went to a meeting and LOVED IT..get that LOVED IT! I am gonna take my children (they are growed up) and sign them up too because it is a good deal and they can use the money too. We all like to travel and who dont want the perks? Then a personal website ontop of that!!!! You dont know what your talking about asshole!

Tell me one real reason YTB is a scam...you cant't there i knew it. fucking idiot!!!! Now who is bogus and not??

Well after running it through Google Translator, I offered the following reply. And for those that do not know, when someone writes me about a column, it is my policy to respond to everyone. My position is if you took the time and effort to contact me, I owe it to you to respond.

Thanks for your opinion. After deciphering it all and getting through the harsh language, I am guessing you are looking for me to provide my reasoning as to why I believe YTB to be a scam. While I believe they are a legitimate company, I do not feel they are a legitimate travel agency. The main focus is on selling the business opportunity. Approximately 75% of their revenues come from monthly fees and sign up fees. A meager 15% comes from travel commissions.

In addition over the past 4 months, they have had their account terminated with Royal Caribbean Cruises, Azamara Cruises, Celebrity Cruises, Perrillo Tours, and Carnival just implemented a more stringent policy on perks requiring the sale of 5 cruises prior to being eligible to receive any perk or benefit. Additionally, IATA also revoked their accreditation which resulted in the loss of the IATAN cards which are an industry credential which you may have been told was included.

One of their larger shareholders (also their former attorney) has threatened legal action and claimed that company is not in compliance with many state laws as well as non compliance with federal law. But now he seems not so sure. Do they employ wish washy legal teams?

Their stock was trading at $9.50 in August and is hovering around $1.00 right now and the top dog has essentially sold off all of his stock and the other larger shareholders are selling theirs as well. They were demoted from the Amex (?) and are traded on the pink sheets because of past accounting irregularities and for failing to file the required SEC filings.

You can make your decision, but those seem like some pretty big red flags to me. Good luck with your travel career and thanks for contacting me.

Best-
John

PS..you might want to work on your "presentation" before you are actually dealing with a customer!

This email, while a bit more vulgar than the rest, unfortunately is fairly typical of the emails I get from the pro-MLM point of view. There seems to be no room for discussion or common ground (which I believe there is), so I have to wonder the intent of sending it in the first place.
Is it to make sure I know someone else disagrees with my opinion? Get in line, I have 150,000 that disagree with my opinion. Is it to show off their mastery of the English language? Maybe it is to demonstrate a certain level of professionalism? Maybe it is just as simple as there is no logical argument for many of the issues. I just don't know!

.

All Sorts Of Strange News

Apparently Coach and Ted have kissed and made up. Ted has posted this cryptic announcement on his website. Not sure if they are working together or "working together".

Over the past week Coach Tomer and I have taken the opportunity to communicate openly and frankly about our past friendship and about the future of YTB. We are in agreement as to what must be done to make YTB become what we and others originally intended when YTB began in 2001, that YTB be the biggest and best network marketing company ever and the largest travel company ever. We found that our friendship of over 20 years was still strong, our thinking very much alike as before and our vision of YTB’s future as it was before, strong and boundless in scope.

Coach and I have decided to work together to continue building YTB together. We have renewed our collaboration to build YTB. There is much to do. My concerns have been addressed and I am satisfied that everything which must be done is being done and done well. Coach and I have resolved to communicate with each other more often and more effectively in the future and, especially on my part, to be patient as the coordination of the many aspects necessary to continue YTB’s growth and success are put in place.

A Succinct Note From Gerry Cahill

I received the following note letter from Gerry Cahill, CEO of Carnival Cruise Lines this morning regarding Vicki's resignation. Seems pretty cookie cutter to me. Stay tuned!

January 18, 2008

Dear Travel Agent Partners:

I am writing to inform you of the resignation of Vicki Freed] Carnival’s senior vice president of sales and guest services. Vicki has resigned to take another position, effective immediately.

We thank Vicki for the tremendous contributions she has made to the Camival organization over the years and the valuable role she has played within our company. On behalf of everyone at Carnival, we wish Vicki well as she moves to the next phase of her career.

Travel agents are our most important distribution channel and all of us at Carnival are committed to providing outstanding service and support to you, our travel agent partners.

As we move into the future, the sales, groups and reservations functions at Carnival will continue to be led by our highly experienced management team, including Maurice Zarmati, VP of sales; Cherie Weinstein, VP of group sales and administration; Adolfo Perez, VP of reservations; Edie Bornstein, VP new business development; and our five regional sales vice presidents:

Vicki Tomasino — western U.S.; Mike Julius — central U.S.; Scott Knutson — southeastern U.S.; Karin Viera — eastern U.S. and Jeff Weinstock - international. In the interim, our sales and guest services management team will report to Ruben Rodriguez, EVP of marketing and guest experience.

Please do not hesitate to call on them] or any of our other team members here at Carnival.

Most importantly, we want to thank you for your business and support.

Sincerely,
Gerry Cahill
President & CEO

Or....

Or, alternately, Carnival may revamp it's commission program entirely and decide to pay their sales streams what they are worth. People who advise and consult a client and service the sale would receive a commission. People who refer clients to a website and try to sell certificates woudl also earn their worth--a finder's fee. Maybe $25?

But in either scenario, YTB and the other MLMs are probably not in the best spot!

A Tidal Wave Is Forecast

Now that the news is out about Vicki Freed sliding over to Royal Caribbean, I thought I might offer my own speculation as to what is happening in the industry right now behind closed doors and what may come in the months ahead and how it will affect the MLM crowd!

Vicki Freed has built her entire career on the backs of travel agents. Vicki Loves Travel Agents (which was pulled immediately after the embargo expired on the press release) is a prime example. I would have never doubted that in a million years. I had several conversations with her on the YTB/MLM deal and we have differing opinions. I believe in rewarding the agents who helped to build the brand and her career, and she agreed and said (essentially) but the money is nice from the MLMs.

Gerry Cahill comes into the picture and he is a bean counter at heart. He inherits a company that just posted a very disappointing quarter financially. Gerry is also a brand man and understands the power of a brand. Bob Dickinson has been predicting a net environment for a long time. The brand essentially can sell itself. They have a great reservations center and have amassed a huge database of past cruisers on Carnival--and their other brands! The time is right to regain some of the "lost" revenue and go net. MLM may have accelerated this because of their hands off go direct position--even to the point of giving Carnival's number for help. I am sure that the publication of the confidential commissions irked some folks as well. So, Gerry sends word down that the line will be moving to a net environment shortly.

Meanwhile, back at Vicki's office, here is her entire career and reputation, and honestly her job, being threatened. If she is to continue being the travel agent's friend, she needs to move to a company that does support travel agents--Royal Caribbean!

But there is that whole Lisa Bauer/Dondra Ritzenthaler issue. Vicki has gone on the record as having said she supports the MLM model. Now she finds herself in an environment where the CEO of the company (Adam Goldstein) has gone on the record of supporting the move to terminate YTB and other card mills. This will be interesting.

What happens to the MLM agents who have put all their eggs in one cruise basket and now there are no more commissions to be made? Well, the RTAs will have to sell Carnival and charge a fee. If that is too much work (and since most RTAs were sold on the website making money while the sleep, it likely is for most), they will have to move to another brand--keeping in mind that RCCL, Celebrity, and Azamara are out. That leaves NCL. I doubt they have the customers to support any of the other brands with similar numbers as Carnival. But realistically, I bet that if Carnival goes net, YTB wiull see a mass exodus of RTAs. Think about it--they sign up and in 4 months they lose the IATAN credential, they lose several large vendors, they get restrictions on their OWN credential, and now may be faced with earning nothing (instead of next to nothing) for their money.

Rest assured, the other cruise lines and tour operators are watching this VERY closely. I have said for many years that we will be operating in a net environment across the board by 2010.

I think Carnival is like the earthquake in the Indian Ocean near Sumatra--and it is a matter of time before the Tsunami slams ashore!

Vicki Freed Jumps Ship

Vicki might love travel agents but apparently she likes Royal Caribbean more! Wow, now there is a surprise I was not expecting!

This just in!


Royal Caribbean International today named cruise industry veteran Vicki Freed as the company's senior vice president, sales.

Freed joins the company after 29 years with Carnival Cruise Lines, where she spent the last 15 years as senior vice president of sales and marketing. Prior to that, Freed served in a variety of sales management positions within the cruise line.

From 1998 to 2000, Freed also served as the first, and only, female chairman of the Cruise Line International Association, the marketing and travel agent training arm of the North American cruise industry.

"Vicki has an outstanding and proven background within our industry and we are very pleased to have her join our team," said Adam Goldstein, president and chief executive officer, Royal Caribbean International. "Vicki's passionate support of travel agents has been well chronicled and recognized. She will be a great asset to our brand as we continue to grow."

In her new role, Freed will take charge of the company's 345-person sales force, the largest sales team in the cruise industry. She will also manage the company's Trade Support and Services division, which includes Reservations, Group Sales, Customer Service, and Loyalty Programs. Freed will report to Goldstein.

Freed earned a bachelor's degree in business from the University of Colorado, and holds a Certified Travel Counselor designation. She also serves as a trustee of the United Way of Miami-Dade County.

Director Bonuses...The Fine Print!

With YTB's stock looking to fall below the dollar mark soon, I thought this was a good time to point this out and ask this question regarding the bonuses that YTB pays out.

At one point, I had heard that the bonus checks were not really cash, but in stock. Another time I heard that they were available in cash at face value, but if the recipient opted for shares of stock, there was a multiplier of some sort--ie: $10,000 cash or $15,000 in stock. I had been assured by a director that there was no such program, yet I was able to dig this up in the "Copyrighted Compensation Plan". However, this only applies to the Achievement Level Bonuses which appear to be the monthly bonuses for the directors. But why would a director take the stock? First the performance (now that the principles have sold most of theirs) is less than stellar. And second, it has no value anchor. That is like going to the local Walmart and having the cashier make an arbitrary price determination. YTB has the sole authority to determine the value of the shares? What's the deal with that? Shouldn't your tax basis be based on the market value the day the shares are awarded? And it is a two way street here (but I suspect it likely is structured as a one way). As a director, I may be busting my chops to build my business and am awarded a $10,000 bonus. But rather than issuing me 10,000 shares, YTB can issue me 10 shares...simply because the Tomer's believe the stock will rebound to the $1,000 mark? I could be wrong, but I doubt that they are issuing the value at where it was a month ago, six months ago, or a year ago.

All Achievement Level Bonuses are paid by an equivalent value in stock options in
common stock of YTB International, Inc. issued and deemed earned on June 15 of
each year as to bonuses qualified for January 1 thru June 30, and on January 15
following the calendar year in which the Director qualified for the bonus between
July 1 and December 31. The equivalent value is determined exclusively by YTB.

Nice compensation plan there! Methinks the directors are stretching their lower back muscles without realizing it. And the Tomer's are are buying stock in Vaseline.

An Unanswered Question

Many have tried to answer some of my questions on my end of the year entry. To be honest, most of the answers were not helpful nor convincing. There are two or three biggies out there that really deserve a response. I post this again at the risk of people saying I am repetitive, but maybe if the answers were not the same old stuff, we could move forward. For those that have trouble discerning what I feel are important points, I have made them bold!

• Why a compensation plan takes 12 pages to define. (Giving up on this one. It just does.)
  
• How YTB arrived at $226 Million in travel sold for 2006. (Still waiting.)
  
• Why so little of the "training" at the annual convention was for travel. (OK, YTB only believes in training at other meetings. We can let this one go.)
  
• How nearly 150,000 RTAs can pay in the course of 9 months $79 million dollars in website sales, fees, and training; and receive $9.3 million in return. (This is huge...anyone?)
  
• And for those that say I don't get the math, I did not learn how nearly 150,000 people paid in $79 million dollars and only got $64 million in return. (Hello? Anyone? Bueller? Bueller?)
  
• Why it is a good thing to have your top executives selling off stock. (There were no takers on this one, so I am gonna assume that it probably is NOT a good thing as everyone initially thought.)
  
• Why a 3:1 split was a good deal when two of the three shares are worthless. (Thanks to Doug for the most reasonable explanation of this. The split may have been a good deal but with the current value of the stock, it is anyone's guess.)
  
• Why employees at YTB could not sell me a cruise on November 9th. (Still no answer on this one yet other than they don;t do anything till an RTA sells it. Well, the YTB site said to call them. Coach in an interview was touting how the res center is all staffed with professional agents. So, why is it that they cannot sell me a cruise, and how is it that they do not know that cruises do not depart from Phoenix?)
  
• Why when presented with facts and figures, the argument mysteriously turns to "you don't understand". (This is another one that we will just have to say...because that is the way it is.)
  
• How many RTAs drop out in a month...a year..... (This number I fear will NEVER be known.)
• How long does an RTA continue to pay the fee before canceling. (Answered. They continue to pay as long as YTB continues to charge them and they jump through the hoops to get them to stop.)
  
• How it is a misunderstanding with IATAN and Royal Caribbean. (Answered. It apparently was NOT a misunderstanding and RCCL called a spade a spade and it is what it is. YTB has moved on and said they would never do business with RCCL again.)
  
• How the air gets booked -- through a YTB ARC number or a Travelocity number. (This is the biggie. No answer other than the errant dribble from a director about it being a cruise misunderstanding. When a RTA sells an airline ticket, who's ARC number does the sale get attributed to when processing via IAR...is it a YTB number or a Travelocity number?)
  
• What exactly the insurance covers that YTB claims covers all of the RTAs. (Still iffy. Apparently there is some insurance with an E&O ring to it, but no one seems to know what it specifically covers. If I can get an answer to the question above, I might have a better understanding on this one.)
  
• The number of RTAs and Reps that actually comply with local business licensing regulations. (We will let this one go. They cannot control what they say, or their press releases, so why would I be so naive as to think they could control that they abide byu any local laws and statutes? I am going to assume that most attempt to fly under the radar here. In all honesty, I probably would as well. Why invest more money being bonded and registered and in compliance when you are seeing so little in return? It can always be written off as a hobby rather than a business I suppose...hmmmm imagine that...a hobby??)
  
• The number of RTAs that comply with the Seller of Travel laws in the states that have them. (See answer to question above.)
  
• Why there have been no updated RTA earning reports since July 2007. Never mind I know--too embarrassing. (Answered my own question.)
  
• How a company can offer health insurance and not have the people classified as employees. (No answer on this one either.)
  
• Why all Reps and RTAs are afraid of divulging a ballpark figure of their earnings for fear of the SEC coming down on them. (Answered, because the "Coach" did not call that play. Reps and RTAs must clear all statements through YTB, except some must have special dispensation to spew crap at will--you guys know who you are, no need to name names.)
  
• Why, out of over 300,000 views of my column, was not one single RTA able to step up to the challenge and prove that they are earning a living selling travel. (Good question.)
  
• Why people involved in one MLM that did not work for them, seem to gravitate toward another. I smacked my dog in the nose enough times and he knows not to pee on the carpet. (Dogs are smarter than a lot of people that become involved in these type of programs.)

Don't Make Me Slap You

This blog was not intended to be a venue for personal attacks on individuals. Lately the comments seem to have gotten out of hand, and I include myself in some of them as well.

There are very good individuals on both sides of this issue. Let's all try to keep this civil and, if needed, attack the positions and opinions and NOT the individual. I know it is a fine line, but the comments of the past few days have crossed it.

I am still committed to allowing this blog to be be open to completely unmoderated comments.

PS--that nun is kinda cute isn't she?

A Downward Spiral...So How Is Recruitment Going?

When I was looking at the sales figures for the cruise contest, I also took a look at the recruitment figures as well. This does not look to good...well, it looks fine to me, just not too good for YTB. It seems they may have peaked and lost their edge and are on the edge of a downward spiral.

Same contest---106 Days. Top 500 recruiters get a free cruise on the Sensation with Coach. You can see the results here, but here is what I see.

Recruiting has to be way off. First of all, at my meeting, if there were four potential recruits, I would be surprised; and none of them signed up that night.

Back in October, YTB was recruiting 500 new RTAs per day as a company. I have to think it is way down based again on the top performers and the track record that close to 90% of the people in YTB do not sell anything at all.

Of their top performers, the average rep sold 33 websites over a three month period. This is 11 per month. The period yielded 18,506 websites sold over the 106 days--that is only 174 per day. Now I realize that there were other sales during this period from the bottom performers.

But, I have to imagine that recruiting is down. How can one just make that statement? Well, it is a hypothesis for the following reasons:

• Scott and Coach's video all about recruiting and how important it is (not travel)
• The fact that they can no longer use the IATAN card as a lure
• The fact that they can no longer claim to represent several major suppliers
• The fact that they can no longer offer "credentials" when you sign up
• The fact that the "credentials" will now cost $149 and that is not even for a real credential
• The fact that the stock is in the tank. Maybe selling that it is a publicly traded company is not so good an idea
• The fact that there has been a decent amount of bad press on YTB and very little good (YTB releases do not count)
• Any simple investigation will reveal that the Reps and RTAs are all over the map with accusations, statements, promises, opinions, and outright mis-truths
• The fact that a shareholder is poised to file a suit against them
• The fact that nepotism runs rampant in Wood River
• The fact that their CFO is indeed not a Certified Public Accountant
• The fact that the head of their legal team is not an attorney--she just plays one during the week

Now of course, fact does not seem to stand in the way of some Reps, RTAs and Directors (right Proud and EAB?) and it appears that it does not even deter the executives who glean numbers.

So, I will turn it over to the YTB crowd to refute my hypothesis. I am sure there will be standard answers again. I am sure all sorts of numbers will fly without substantiation, but let's discuss it!

Top Producing Referring Travel Agents--Really Now?

While 2000 RTAs and Reps were sailing on the Carnival Sensation to Nassau, I had some to cull some numbers that were released by YTB. Culling, it is sort of like gleaning, so it should be comprehensible to most.

There was a contest for tis incentive trip. The 500 RTAs with the most sales in a little more than three month period would win a cruise with Coach for his birthday party. I assume the contest was created to kick up the sales a notch--just like the Sail-A-Thon was supposed to do. Maybe this was another step for YTB to (as Kim Sorenson has said) "legitimize" the concept.

But after looking at the numbers shown on YTB's site, I am not so sure this was a success at all? The numbers open the door for many other questions and concerns.

• How does someone with only 7 bookings over 106 days qualify as a "Top Producer"?
• If 540 RTAs made 7153 bookings to earn "Top Producer" status, what did the other 149,460 RTAs do?
• How come all of the people that email me telling me how much they sell, are not on this list?
• Will the RTAs report this cruise as income to the IRS?
• How did they calculate these numbers if the SAP system is not installed? Gleaning?
• If these are "Top Producers", one would think that the 13,000 cruises sold on the Sail-A-Thon might impact this group...unless those 13,000 were all sold by the bottom producers.
• Being generous and calculating each booking at $3500 fully commissionable at 16%, the average RTA would have earned $4450 for the three months. So, where are the riches if the "Top Producers" are earning just above minimum wage?
• Not being generous and being realistic that each booking was more along the lines of $1500, the commissions retained by YTB probably did not cover the cost of chartering the ship.
• It is strange that YTB will use the terms "bookings" and "sales" at different times when it best suits their needs. You will rarely (dare I say never) see the two together--that might paint a real picture!

I am sure that the detractors on this blog will be defending this with the standard comments. For your convenience, when commenting, please just enter the comment number, we will figure it out:

1. I decided to let my downline participate instead of me
2. I book all my travel personally and don't use the website *
3. You just don't understand YTB
4. I was on the ship, you can't prove I wasn't
5. You are an old hen
6. One Billion Dollars in 2008**

* Then why they hell are you in an Internet based travel opportunity?
** The "billion" stays the same, it just seems the year keeps changing.

Beijing 2008? More Like Cha-ching!

It seems that while the top producing agents of YTB were sailing the Sensation to Bahamas to feed the ego of the Tomers, the details of the Olympic packages appeared on their websites. Well, so did the issues on Ted Lindauer's as well, but that is an entirely different discussion.

As expected, the "unbeatable" deal, is. Actually, it is really not that much of a deal to begin with and appears to be VERY restrictive. You can check it out here and snoop around for yourself.

URL: http://ytb.spring-tour.com/ytb/TourList.aspx

Just a few highlights for those interested in traveling to China for the Olympics:

• 14 preselected departure dates ranging from 7-11 days
• Currently (and curiously) all show that 9 positions have been sold in each package
• Hotels are NOT guaranteed--just a disclaimer stating "or similar class"
• One of the tours begins in New York and drops you off at the end in LA--odd
• You do not have admission to all th events as excpected. It is typically 4 events over two days and they are first round events at that
• The ceremony tickets seem to not be available
• Some, but not all tickets have been acquired, there are a lot of "TBA"s for the events
• It is NOT all inclusive as one Director insisted; most breakfasts are included and a few lunches and dinners--the Package #3 only offers one lunch and one dinner
• The sightseeing is way too ambitious to enjoy the culture and history--The Great Wall AND the Summer Palace in one day and back to the hotel in time for dinner??
• When you compare a 7 day YTB tour with an 11 night Globus tour (and add in event tickets and the opening ceremony tickets purchased separately), it costs $100 LESS per person--11 nights versus 7 days...opening ceremonies versus watching it in Chinese television in your hotel room..
• Several competitive packages are available and they are on known airlines and are members of the United States Tour Operators Association (USTOA). I would rather fly Cathay Pacific than Shanghai Springs any day.

So, is this really a good deal for the consumers? Not so much! They are overpaying for an unknown product. Events are not guaranteed and they have considerable additional costs involved. Why does YTB feel it is such a good deal? Probably because they were able to negotiate a 25% commission on the program with Shanghai Springs. So, if you are planning on booking a trip to the Olympics, and are looking for a bottom of the barrel price and experience, I suggest you buy it from your local YTB Referring Travel Agent with one condition--negotiate the price. They have a minimum of $1000 per person and I would be willing to bet they will work with you. But remember, you do get what you pay for! If you are looking for an experience to last a lifetime (rather than a nightmare) then go ahead and call a local travel agent or book with a company with a solid reputation and one that might offer you some protection and service if things go wrong!


Edit: 553PMEST 14January 2008. Corrected YTB Tour URL

My, What Strange Bedfellows!

Wow, when I look back to my first post in this blog back in October, who would have ever thought that I would be sending Christmas gifts to Doug Bauknight, a YTBer whom I now consider a friend? We are still on the opposite sides of the fence but we talk If that weren't strange enough, I now find myself corresponding with one of the top Corporate attorneys in the MLM world. What is even more strange is that he was the Chief Counsel for YTB and led the firm from nothing to nearly 150,000 RTAs strong. Stranger still, he was a decades old personal friend of "The Coach".

It appears that when Ted Lindauer began to do what he was hired to do, the megalomaniacal duo of Scott and Coach Tomer fired him without nary a reason. Apparently Ted wanted them to comply with some laws as it related to their expansion into cars, flowers, and other ventures. He wanted to make sure that the hundreds of thousands of lemmings running around the country were selling the program legally. Apparently he wanted to let him know of the legality (or illegality) of charging the RTAs for credentials. But the Tomers were on a roll. Back in September when Ted was fired, the stock was up and it was a great time to sell. And sell they did! Ted was replaced by in a nepotist move when the Tomers replaced him with Andrea Clagg, the wife of CFO, John Clagg. Andrea apparently has no legal background and is all of a sudden the Director of Legal Services.

Now, the good Christian Coach will not speak with Lindauer nor offer any explanation as to why he was ousted. So much for loyalty and friendship. Ted has a website with a lot of very good information on YTB--MLM Lawyer. What I find particularly interesting is that his claims are fairly parallel to my suspicions all along--YTB is operating on the fringe of legality. But with his inside information and his recent letter to the Board of YTB, I suspect that YTB has crossed the line. I wonder how "Coach" is going to spin this bit of news. Ted has now put the Board of YTB on notice of their illegal ways with an eye opening letter. An attorney with nearly a half century of experience does not write such a letter lightly.

Just some key points:

• The required trainings and purchasing of credentials violates civil and criminal provisions of many states' anti-pyramid laws and constitute deceptive trade practices under the FTC.
• The RTAs that sell cars need to be licensed to sell cars in many states.
• The Two Fly Free program constitutes a Travel Club or Discount Buying Service which requires licensing and bonding in many states. YTB has not obtained them.
• The promotion of the medical insurance has effectively resulted in YTB being deemed an unlicensed insurance provider in many states.

Ted also points out some "accounting irregularities", something to which YTB is no stranger:

• As of December 31, 2006, they were overdrawn on the corporate bank accounts is excess of $1 million dollars.
• Their CFO, John Clagg, is not a CPA (but he plays one during the week and his wife plays an attorney)
• The promotional materials used by the RTAs are not being reviewed by knowledgeable legal counsel prior to publication (can you say "Coming to you from the farm...")
• The companies have ceased publishing monthly data on Rep and RTA earnings and RTA travel bookings.

So, what does all this mean? Well, Ted, as a shareholder of record has put the Board on notice that they must comply with his requests or provide a satisfactory response to him. If not, he is prepared to file a stockholders derivative suit in the US District Court to compel YTB to comply. I imagine that word of this action will spread to several other three letter agencies that might have an interest--IRS, SEC, FTC, and the AGs of many states.

NOTE: I have placed a link to Ted's site on this blog. I feel it is important for everyone on both sides of the fence to read this information. Please visit it and read some of the comments from current and former YTBers, responses from YTB HQ, and Ted's comments on the whole situation!

YTB Kick Off 2008

This video had embedding disabled by request, so you will need to CLICK HERE to see it. While the contents offer no surprises, yet again, it reinforces just how important the recruiting aspect is to YTB.

The message is all about exposing the opportunity daily to as many people as possible. The "actor" stresses to not deal with people that "don't get it" or "don't want to get it", but to make sure you find those that "do get it". Pretty reasonable. He also said that "most" don't get it. One wonders why?

One of the points he made was to get "travel testimonials" which apparently is a different definition than I am used to using. As I see it, he is talking about personally traveling on the perks and discounts in order to provide your own testimony in selling the program. He tell you that you should use the CLIA number since they lost the IATA number and encourages people to go out and get some discounts and travel. He mentions a recent trip to Cozumel with his parents that was 100% tax deductible. Hmmm. I like the way the IATAN thing was glanced over.

In the "real" travel industry, a testimonial is from a client and it discusses how the agent served them, their experiences at the property or cruise line, and typically some sort of endorsement.

This appears to be more of a travel on a discount so you can tell people you travel at a discount. And then sell them on the program. Again, no real surprises here but still awfully smarmy!

Will The Real Phil Piccolo Please Stand Up

There have been a lot of comments and speculation about a nefarious scammer, Phil Piccolo, having joined YTB with the intent of being the biggest and the baddest YTB Rep/RTA there ever was.

Just who the hell is Phil Piccolo? Sure, I have read some internet sites that reference him--and he does indeed seem like a one man MLM scam machine! If the rumors are true, I understand that he has already been named a director. So, again,why does YTB want a known scam artist as their Numero Uno Major Domo? I mean they already had some bad press on Angelo Degenhard--just does not make sense to me. My hypothesis is that the more people recruited, the more money for the top of the pyramid! The owners are sure not making any money on selling their stock now that it seems firmly entrenched at a buck--so I guess if Phil can bring in 100K members that is a cool $50 Mil for the top dogs and another $5 Mil a month in rental fees for the websites.

It has been posed that we do not know this is the "same" Phil Piccolo--but that is sort of like saying we have a quarterback that played in the SuperBowl for the Patriots several times named "Tom Brady" who wants to play for us--but we are not sure it is the same "Tom Brady".

So, what is the story on this mysterious Phil Piccolo? Google it here!

Is Carnival Coming Around?

It seems as if Carnival may be coming around. Maybe the new CEO Gerry Cahill is taking a look at this from a financial angle!

It appears that Carnival, effective immediately, is requiring any individual agent to have sold 5 cruise in the prior 12 months before being offered any discounted travel or FAMs. So there goes a huge recruiting tool from the YTB Book of Recruitment.

Per Vicki Freed:

"There are so many different business models out there in the travel distribution system now that it is becoming increasingly important to ensure that only professional travel agents who are actively promoting and selling cruises are receiving travel agent discounts," said Vicki Freed, Carnival's senior vice president of sales and guest services.

...which I think is a bit of backpedaling since when we spoke she stated that Carnival had no means to track an individual's sales. I did not believe it then and apparently for good reason.

So, how does one sell "traveling like an insider" and traveling on hugely "discounted rates" when the #1 supplier of YTB has now clamped down. Here is a novel concept--sell travel and not the website! To a few in YTB this has no impact (as it has no impact on the traditional agents who have supported Carnival for many years), but for the vast majority of people who signed up for the CLIA card, the IATAN card, and the discounted cruises on Carnival---they will need to re-evaluate the value of the $50/month they are paying!

All in all, I see this as the right move by Carnival even though it is a move to save a little face as well. I think RCI has the right idea, and egos will not allow that admission at Carnival so this is the answer!

YouTube Overload

This is apparently a series of 7 videos comprising an hour long presentation. I imagine it is supposed to be similar to the one I attended, but I cannot say as I have not seen them all yet. What is interesting is the presenter. This guy is someone that an RTA was "shocked" that I did not know--being in the travel industry. Well, this is "Mike The Travel Guy". Anyone ever heard of him? Maybe someone with more than the 12 years in the industry that I have?

He professes to have 25 years in the travel business as a travel agent, travel agency owner, and a tour operator. Yet later in the video he claims that he was with AL Williams and had been working in home based businesses off and on for 30 years. The math is just not working for me--but then again, math tends to elude most in the MLM game. One of his comments is a common misnomer--he alludes that because YTB is publicly traded it MUST be a good thing. This cannot be further than the truth. He also says that when he heard "Coach" was involved, he did not need to know any more and signed right up. Take a look. Proud, is this a good presentation?

An Attorney Mystery

This bit of news seemed to slip under the radar back in the fall, but apparently, the attorney that was a major domo in YTB was let go and no one really seems to know why? You can get these originals from Ted Lindauer's website. Hmm, just not sure what to make of this? Any conspiracy theorists out there?

The first letter:

At the request of Coach Tomer, I closed my network marketing legal practice of 37 years in September, 2005. I immediately moved to Southern Illinois and began working full time at Your Travel Biz.com in multiple capacities as marketing compliance legal counsel, a department administrator and as a marketing consultant.

On September 7, 2007 Coach cancelled my contract with YTB without explanation or prior notice. I have reopened my network marketing practice and have had no affiliation whatsoever with any of the YTB companies since September 7, 2007. This Announcement became necessary after Coach repeatedly refused my requests that he publicly announce that I was no longer affiliated with YTB. In my opinion, the withholding of this information from YTB Reps and RTAs was just not right.

Since September 7, 2007 the maintenance of YTB's marketing compliances has been the responsibility of a team of attorneys with law practices in Southern Illinois.

I have filed an arbitration proceeding against YTB to collect back compensation owed to me. As a YTB stockholder I have requested that the Board of Directors of YTB International, Inc. require that the officers of the various YTB companies be ordered to take a number of specific actions. In my opinion each of these actions is critically necessary to ensure the survival and future success of YTB. In the event the Board of Directors refuses my requests I will file a stockholders lawsuit to have the court order that the actions be taken.

Thayer C. Lindauer

The YTB response:

In response to the e-mail recently circulated to some of our Directors from Ted Lindauer, YTB makes this initial statement. Mr. Lindauer was engaged by YTB as legal counsel for several years and has been a friend of Coach's for decades. Mr. Lindauer submitted a written resignation to YTB on August 10, 2007. Although Mr. Lindauer's arrangement with YTB did not provide for compensation in the event of his resignation, Mr. Lindauer made several arbitrary and unreasonable demands on the company.

After months of attempting to work with Mr. Lindauer in good faith to arrive at a generous settlement providing for more than he was entitled to under the terms of his engagement, YTB is shocked to now learn that its own former counsel has attempted to alarm the YTB community with this confusing and unwelcome e-mail communication. We are disappointed that Mr. Lindauer has apparently chosen to cease negotiations and pursue another agenda seeking to harm his former client and its business family.

This situation is being evaluated by our legal team and appropriate action will be taken immediately.

And the Lindauer response again:

Friday, January 4, 2008

I resigned from YTB in April, 2007 because YTB was ignoring my compliance recommendations and refusing to provide staffing to support my administrative responsibilities. Coach asked me to withdraw my resignation and promised to address my compliance recommendations and to provide the needed staffing. I accepted Coach at his word and withdrew my resignation. In the following months my administrative department received additional personnel, including the appointment of CFO John Clagg’s wife, Andrea, a non-attorney, as the Director of Legal Services. My compliance recommendations continued to be ignored.

In early August, 2007 I learned that John Clagg was giving various compliance directives to his wife. Neither John nor his wife were discussing these matters with me before acting on them. I objected noting to Coach that neither John Clagg nor his wife were qualified to make legal compliance decisions and the decisions they had made were wrong ones. Coach refused to stop the Claggs from making compliance decisions and refused to reverse the erroneous compliance decisions they had made. On August 10^th I resigned and submitted my request for severance.

Andy Cauthen, who was then CEO of Your Travel Biz.com, and Coach both asked me to once again withdraw my resignation. Coach promised to address my concerns after the August Convention in St. Louis. He also promised a generous severance package when I retired from YTB. I again withdrew my resignation and returned to work at YTB.

After the Convention Coach informed me that local attorney John Simmons was being engaged as overall General Counsel for YTB International, Inc. and its subsidiaries. I met with John Simmons on several occasions in August to review my compliance and other recommendations previously provided to Coach in several memos. On September 7, 2007, John Simmons asked me to temporarily vacate my office at YTB so it could be modified to house two attorneys. That evening I received an email from John Simmons welcoming me to his new legal team.

Several days later, while working at home, I received an email from Thad Leach, a local attorney who is part of the new legal team. Mr. Leach’s email contained one sentence and stated that YTB had decided that it was no longer in need of my services.

I immediately asked for and was granted an appointment with Coach and Scott. On the day of the appointment I received a call cancelling the appointment and telling me to contact Thad Leach. Mr. Leach and I exchanged various emails about my severance with Mr. Leach denying that YTB owed any severance to me despite the fact my written agreement with YTB called for a specific severance package.

In October YTB offered me a new 3-year consulting agreement in lieu of my pursuing my claim for severance. I agreed in principle subject to having an acceptable written agreement. Mr. Leach sent a proposed draft of a new agreement which was one-sided and allowed YTB to cancel the agreement at any time with no further obligation to me. I rejected this draft and proposed seven changes. Mr. Leach dragged the matter out for several months, finally saying he needed to speak with Coach. I never received a response from YTB as to the seven changes I requested. Mr. Leach notified me just before Christmas that there had been unspecified “new developments” and he would be back in contact with me “after the holidays.”

Continuously throughout the months following September 7, 2007 I offered to train the new legal team in MLM legal compliance requirements in 12 two-hour training seminars without any compensation to me and whether or not I was able to settle my severance claim or enter into a new agreement. Mr. Leach rejected my training proposal at first, then refused to respond as I renewed my offer over and over again.

Most disappointing of all was the refusal of Coach, despite my repeated requests and then demands, to let the YTB Reps and RTAs know that as of September 7, 2007, I was no longer affiliated with YTB and to tell them who is overseeing YTB’s marketing legal compliances. If Coach is comfortable having a team of local attorneys with no Multi Level Marketing experience take on the responsibility of keeping YTB in legal compliance, why hide them and pretend that I was still at YTB?

Ted Lindauer

Blatant Lies

It is not getting any better. Here is a press release I received today. Maybe if one of the YTBers on this blog might be able to let HQ know that no one is listening to them. I have reported this to IATAN as well since I am sure they have a vested interest. This is getting ridiculous!

Suppliers--do you not care that these "agents" have so little respect for the truth?

Here is the press release http://www.webwire.com/ViewPressRel.asp?aId=56090

And here are some quotes from it and the bold statements are my issues!

When you become an RTA you can receive a real, tangible Home-Based Business you can run from anywhere in the world, even from your kitchen table. You get huge discounts on Hotels, Car Rentals, Cruises, Free Upgrades, Exotic Vacations, and many more travel perks. Your own personal travel agent photo ID card and credentials. Support and backing from a State-of-the-Art Travel Agency in Illinois. Your own online travel booking website and 60% of paid commissions. A position in YTB’s Affiliate Marketing Program, allowing you to earn a serious income and bonuses on you and your teams production. “Fam” Trip Access to Exotic Places and your own personal IATAN (International Airlines Travel Agent Network) Card

“We are extremely excited to join over 130,000 other YTB “RTA’s” (Referring Travel Agents) in the travel industry said Dallas von Nieda. Not only can we earn commissions and write off our trips when we travel, but we can also take advantage of insider information, discounts and special opportunities available only to those in the travel industry in the past. We get paid to travel! Everyone travels and everyone knows people that travel so this business sells itself she says. If you ask anyone if they had more time or money what would they do, the number 1 answer is TRAVEL! ”

Again, the gist of this release is NOTHING about selling travel. These folks claim that they are RTAs but the whole pitch is recruitment of the REP! If you are interested in SELLING travel why are you spewing on about how you travel for cheap and get deals? You do not see Macy ads saying "screw the product we sell, come work with us and take the discount"! Do you? NO!! They sell the damned product. This is BS people and it is only getting worse.

I know, I just don't understand. But this is an outright LIE. They do not get an IATAN credential nor are they even able to sell enough to be eligible because IATAN revoked their accreditation!