Bermuda Takes An Interest

According to the Royal Gazette, Bermuda is interested following the charges as well. I know when YTB launched in Bermuda, they were questioned for being a pyramid scheme (here and here)  as well, but apparently their argument was persuasive enough to allow them to go forward and recruit 700 Bermudian citizens into the program.

A recognized authority on MLMs has told me that in the MLM business, international expansion can lead to federal inquiries. Foreign governments can see that the US is sending their "trash" to operate in their country, and now the Stste departments begin to talk. Before long, State asks the FTC to find out what is going on and then the FTC brings out the hammer.

So Bermuda and Canada might be worth watching in the coming months.

An IATAN Rehash--Let Me Get This Straight

Late yesterday afternoon, I got my daily dose of travel news from Travel Trade where they discussed the failure of YTB's appeal for the return of their IATA number. When I began to really think about this, I have to laugh.

Back in October of 2007, IATAN was THE credential to have according to YTB. It was all over their recruiting material and everyone was looking to have the IATAN card for the free and discounted travel.

November rolls around and YTB gets tossed to the curb by IATAN and Royal Caribbean. The response from YTB is "we don't need no Royal Caribbean or no stinking IATAN."

January 2008 enters the picture and it seems that the provisional license to sell travel in Canada is predicated on having an IATA endorsement. Well all of a sudden, "maybe we do need that stinking IATAN". But that does not seem possible because Scott Tomer ran his mouth off saying that IATAN tossed them because YTB was a competitor of IATAN. So they bought a travel agency. But it seems that they were unaware that the IATA numbers are not necessarily transferable.

February 2008 finds YTB hiring a big gun travel lawyer Al Anolik to plead their case for reinstatement to the Travel Agency Commissioner. Wow, YTB must be beginning to understand that IATAN is kind of a big deal.

Late March and early April, YTB is convinced that if they maybe buy a travel company in the US, like say Hickory Travel Systems, the Travel Agency Commissioner will HAVE to see it their way and give them back their number.

And here we are to April 16th. A no go. It ain't happening. The Commissioner completely held up the original ruling.

So, what was the response from YTB? Well, let me quote Al Anolik:

The decision is actually a victory for YTB. We are using the code and can use it because we got it from ARC. IATA cannot control a YTB in the US that is fully accredited by ARC. We quit using the IATA symbol a long time ago. We are are going to continue business as usual and as for flashing the IATA card. we won't have any IATA symbol on our cards. IATA cannot interfere with our relationship with ARC and if they did, they wil have an antitrust suit.

Wow, so it seems like YTB is back to the "we don't need no stinking IATAN" again! And it seems that Mr. Anolik may have drank the kool aid in the YTB cafeteria because only YTB logic can somehow say that losing a legal challenge is exactly what they wanted. I wonder if that is the tactic they would use if the FTC, SEC, or the IRS came after them?

So what is it guys? Is IATA something you want or not? Seems like you wanted it for recruiting. Seems like you wanted it enough to hire an expensive attorney to go get it for you. Seems like you wanted it enough to buy an agency in Toronto. Seems like you wanted it enough to open negotiations to purchase Hickory. But your attorney says that the denial of the IATA number is really the victory you all sought in the first place.

Wow, that is almost as clear as the compensation plan!

YTB and IATAN (again)

The other day, Travel Weekly ran a column about YTB fighting with IATA to get their cancellation rescinded. Now after all the posturing and all of the RTAs and Reps screaming that YTB does not need IATAN and so forth, it seems that management has a different view.

I suspect this about face has a lot to do with their provisional certifications in British Columbia and Ontario. But I also have to question how receptive IATA will be to reinstatement when you hear things such as this:

After labeling the IATAN program "the biggest card mill in the world," YTB said IATA's refusal to let the agency attempt to change practices in order to regain the IATA endorsement was an indication that IATA was trying to eliminate YTB as competition "for being a perceived threat to [IATAN's] monopoly in the travel card industry."

As one MLMer might say, LOL too funny. Now YTB thinks that their issuing their IATAN number to 140,000 people that paid them $449 was not the issue but that IATA felt they were a threat to the existence of the IATAN card. Are the executives at YTB drinking the Kool Aid too? I thought they just served it!

Here is a tip, when you are looking to affect change and you are not in control of it; it is wise to not piss off those who are in a position to affect that change.

So, why is IATA endorsement now all of a sudden such a big deal? Is Canada onto the scheme?

PS: Blog note--yesterday was indeed April 1 and for those TTAs and MLMers that believed the story about TAG acquiring YTB, it was false. The story was created by a colleague who will go unnamed and I applaud him for his creativity and sense of humor. Secondly, I am not ignoring the 10K--I am reading it. Not the most exciting bathroom reading material, but there is some interesting insight to be gained. Stay tuned. After all it is like 125 pages!

What Are People Looking For?

When someone wants information on a topic these days, they usually utilize the Internet and a search engine. Google is a popular one. Yahoo is another one used by many as well.

While many people have subscribed to this blog and many more are just bookmarking it and checking back, we do get a ton of traffic from the search engines. Last week, I was watching the search terms used to find this blog and I thought it was interesting.

For the most part, they are negative terms. People are actually looking for specific bad things, like "is this a pyramid scheme". They are not looking for "is MLM a great opportunity". Both search terms likely would have eventually brought you here, but the list below shows the search terms people used to get here--so there is no influence of the blog. At least at this point.

Take a look at some of the top phrases entered into search engines last week:

• FTC YTB
• Dr. Bob Seligman
• Is Mike The Travel Guy RTA a pyramid scheme
• Ted Lindauer
• Travel MLM
• Fired YTB Lawyer
• CLIA and YTB
• MLM cult
• Opinion about MLM
• YTB and TICO standards

Wow, Seligman is apparently still trying to be verified. People are still very curious about Ted Lindauer and his firing and I suppose his subsequent reconciliation. But a lot of people are wondering if MLM is a pyramid scheme or a cult.

How does this happen? I am unaware of any traditional business model in any industry that garners those terms in their searches. "Is GE a cult?" got one return on Google. YTB got 4,630. "Is the IBM salesperson a pyramid scheme?" got one. YTB got 6,780. "Fired American Express Lawyer" got no responses. YTB got 1.

Very interesting. It seems that it is not only the folks on here that are questioning the validity of MLM in travel. It seems to me that there might be more of a pervasive attitude out there as well. I have said it before, but if I were involved with a travel MLM and had to spend most of my time and effort defending the shady business practices, I would move on. Well, maybe I would put some pressure on management to do something first--one would think that if they were truly vested and interested in the business they would welcome the opportunity to "legitimize".

This Week's Top 5

Wanna know what everyone is reading? Here are the week's top 5 blog posts:
5. It Seems Like Yesterday
4. Rhode Island Refunds
3. Travel Training MLM Style--What A Crock!
2. TICO, The New Enemy

and the number one blog post of the week........

1. Travel Weekly Asks About Trip Whores

The Lighter Side Of MLM

Does anyone remember the ominous predictions of February. Tom Coleman advised everyone to watch USA Today for big news about YTB that will have everyone's head spinning? Well February came and went and March is almost gone as well and nothing. Nada. Zip. Zilch. Nyet!

• There was ton's of speculation as to what it was. The traditional travel agents could not imagine anything that USA Today might pick up except for a paid ad.
• One RTA emailed me and told me to look for the full page apology from Royal Caribbean to Scott Tomer; which was one of his demands before they would sell Royal Caribbean again.
• Another told me that USA Today had done an in depth interview with Coach and the news that YTB had sold $1 Billion Dollars in 2007 was going to be front page travel news.
• Still there were several others that approached me with the news that YTB was just finalizing the purchase of Travelocity.

So what was this big news? None of the above! But, if I had to guess which one was believed by most YTBers, I am going with the Travelocity one. Two YTBers who I have some respect for whispered that to me and it was also mentioned by several others who I respect less. I laughed, but they felt their info was credible. Well, I think this was a case of "Whisper Down The Lane". Remember in kindergarten when you whispered a sentence in someone's ear and then laughed when you saw how it came out at the other end?

Well here's how I think it went...HQ let a few Directors know that they were looking to buy a 2 man agency in Ontario to get the regulators off their back for the Canadian entry. The Directors passed it along to their downlines as YTB was looking into an acquisition and it has to pass regulatory approval. Then the RTAs and Reps talked amongst themselves and passed along that YTB was acquiring a huge competitor and it is almost through regulatory approval. And of course since everyone thinks the biggest competitor is Travelocity, it morphed into YTB was buying Travelocity and the news will be broken on the pages of USA Today.

The corollary to that was also another dose of bad information when Tom Coleman informed everyone that on the day of this announcement, many would make millions off the stock of YTB! Hey, I did not check lately, where is it at? Still firmly entrenched under a buck?

TICO--The New Enemy?

So, YTB is in Canada with their Referring Travel Associates! I wonder how they are going to address the training mandates that are being imposed by the Travel Industry Council of Ontario (TICO) in 2009?

Last week I asked TICO and I received the following:

Thank you for your email. I have attached the link to TICO's FAQ' s in relation to Education Standards. Any person selling travel or consulting for the purpose of selling travel services to the public in connection with an Ontario registered travel retail agency is required to meet the Education Standard by July 1, 2009. http://www.tico.on.ca/travelagents/minimumeducationstds.htm

Regards,

Dorian Werda
Manager, Administration & Claims

Travel Industry Council of Ontario

Travel Industry Council of Ontario

2700 Matheson Blvd. East.

Suite 402, West Tower

Mississauga, Ontario L4W 4V9

Tel: (905) 624-6241 ext 224
Toll Free: 1-888-451-8426

Email: dwerda@tico.ca

Web: www.tico.ca

Let me excerpt a few passages that ought to be of particular concern to the "9,000" RTAs that just signed up.

Every person in Ontario who is working for a retail travel agency and is selling travel services or providing travel advice to the public must, by law, meet the Industry's Education Standards by July 1, 2009. This includes industry Supervisors and Managers.

And from the FAQ page:

Q Why are Education Standards necessary?
A Since TICO was established, they have identified hundreds of complaints and situations that have arisen due to the lack of knowledge or misinformation about the rules governing the industry. These rules, embodied in the Travel Industry Act, 2002 and Ontario Regulation 26/05, spell out the role of the agency and wholesaler and touch on vital issues of 'obligation to the client' and 'due diligence'. TICO is being proactive and instituting a basic course to ensure that there is a level playing field and that all registrants will be familiar with the Act and Regulation. This will, in the long run, save consumers, agencies and wholesalers a lot of stress, a lot of time, and even a lot of money.

Q How will the introduction of TICO Education Standards affect the way I do business?
A a) as an agency owner: As of July 1st 2009, you will have documentation from each employee attesting to the fact that as a staff member who deals with the public, he/she has satisfied the requirements of the TICO Education Standard, by passing the Travel Counsellor Exam. It is suggested that employees present both the original documentation and a copy to the employer, so that the employer can verify that the copy is genuine. The employer should only keep the copy--and return the original letter to the employee.

Also, as an agency owner, if you deal with the public, you will have passed the same Travel Counsellor Exam as all your staff. When you renew your TICO registration after June 30th, 2009, you will be required to confirm that all staff selling travel services or providing travel advice to the public are compliant with the Standard.

In addition, you will ensure that the Supervisor/Manager of the agency has complied with the Standard by passing the Travel Counsellor Exam and, if necessary, the Supervisor/Manager Exam.

b) as an agency Supervisor/Manager: As of June 30th, 2009 you will have passed the Travel Counsellor Exam. Every travel agency is required to name a Supervisor/Manager on their application for registration or renewal. This individual is the Supervisor/Manager “on record” with TICO. The Supervisor/Manager on record with TICO as of June 30th, 2009 will be “grandfathered”. This means that he or she will be given a temporary exemption from having to pass the Supervisor/Manager exam by July 1, 2009. An individual that has not been approved as a Supervisor/Manager by TICO and who wishes to act as the Supervisor/Manager on record with TICO on or after July 1, 2009, must write and pass the Supervisor/Manager Exam.

Please note that all supervisors and managers or other individuals who may wish to advance in the industry in the future are welcome and encouraged to take the exam. A combination exam is available for those wishing to write both the Travel Counsellor and the Supervisor/Manager exams at the same time.

In addition, in your capacity as agency Supervisor/Manager, you are responsible for ensuring that all travel counsellors are compliant with the Standard.

c) as a travel agent who deals with the public. As of July 1, 2009 you are required to pass the Travel Counsellor Exam. Upon passing the exam, you will be sent a "Pass" letter/Certificate. Take the original, along with a copy, to your employer. Give them the copy for their files as proof that you have complied with the Education Standards.

Q I work in a Call Centre - do TICO Education Standards affect me?
A Every person in Ontario who is selling travel services or providing travel advice to the public on behalf of an Ontario travel agency must, by law, meet the TICO Education Standards by July 1, 2009.

Since RTAs are not YTB employees, they are considered "agency owners" and are subject to the additional requirements. But this all happens in July, and if my calculator is correct that equates to $4.5 million in sign up fees and $7.6 million in rental fees till compliance is mandatory.

Canada Resolved

I see that in order to "maintain compliance in Ontario", YTB has purchased a VERY small travel agency that was apparently licensed. I say VERY small because according to the press release, their agents have nearly 20 years combined industry experience. That would be 2 people 10 years, or 3 people 7 years, or 4 people 5 years each.

Well, I suspect this will resolve the issues for them in Ontario. Now to tackle British Columbia!

Another Misunderstanding? This Time In Canada?

With all the hoopla surrounding the YTB entry into Canada, I am not sure it is going as smoothly as anticipated. Press releases tout 3,000 people attended the kick-off meetings, and one commenter on this blog has stated that they now have 9,000 Canadian RTAs that have forked over the $500 and $50 a month. But it seems there may be a problem on the travel end. Apparently, the YTB Canadian sites have no booking capability--there are no "Search" or "Book" or "Go" buttons.**** And more curious, is the disclaimer at the bottom of the page:

Unless otherwise marked, all prices are in U.S. dollars.
Copyright 2007 YTB Travel Network, Inc. - All Rights Reserved - v2.0 - Privacy Policy
ON: Seller of Travel – License Pending, BC: Seller of Travel – License Pending.

Licenses pending? What happened to all those years getting the ducks in a line before going full steam ahead into Canada? I thought YTB was only launching in two Provinces and now their licenses are pending...in both? Is there a problem? Or is this merely another "misunderstanding"?

***Apparently there is an issue with my browser in that the buttons are not displaying for me. I figured I better append the blog, rather than make a change to the entry!