Sound Familiar?

• We are poised to enter 50 countries around the world next year.

• Traditional travel agencies will be going out of business like they did in the 90's.

• Joining World Ventures you have 0 overhead.

• 100% positive cash flow with zero liability.

• Endorsed by many prominent people & celebrities alike

• #1 Travel Agency for Carnival Cruise Lines.

No, it's not YTB. It's the New Kid in Town. Or, should I say old Kid in Town since they have been around for awhile. World Ventures. Same song, different tune.You pay $400 to join to point people to book travel to on your website. There is a monthly fee just like YTB and if you sign up 6 people they waive the monthly fee. Most of the money is made in recruiting your friends, family, co-workers and neighbors.

So, just who and what is World Ventures? And, why should we care? According to Peter Stilphen, MCC, World Ventures is indeed a travel MLM and on his naughty list. Mike Azcue and Wayne Nugent founded World Ventures after being involved in another MLM called GTT. World Ventures income figures released in 2007 show only 26.3% of the people made money. The average income was only $200. Sounding familiar again? Seeing a pattern?

And, when you question the figures and say anything about the company the flock rises up and tells you we (TTA's) are jealous, going to be extinct and they are going to take over the world. Big sigh. Here we go again.

What is it with people believing this stuff? Is it because of low self esteem? Wanting to be rich? Lured by greed? Or, is it that travel is sexy and fun? I am sure psychologists and cult specialists could enlighten us all day on the motivation of people to join these companies. But, the bottom line is they hurt the travel industry. Last count I saw was upward of 55,000 untrained World Ventures reps running around passing themselves off as travel agents to the consumer. This hurts all of us.

The sad thing is once one MLM goes away there are more awaiting in the wings with the promise of riches and the lure of easy money and traveling like the pros. If you are as fed up as I am here is the petition to sign asking for regulation of the MLM's.

http://www.pyramidschemealert.org/PSAMain/home.html

Doh' Did YTB Just Have an "AHA" Moment?

As I said in yesterday's post, the appointment of Bob Dickinson is a fantastic move for YTB and they are to be congratulated for landing such a big fish! I have to admit, it was puzzling to me for a while and then I began to wonder if YTB may have had an "AHA" moment.

While many people with YTB are crowing about the success of YTB over the past 12 months, I really see it not so much as success, but finally doing the right things to get out of the trouble they placed themselves in in the first place. Here are some of the" accomplishments" I have heard from the YTB crowd:

• Being listed on the OTC stocks and off of the Pink Sheets (you were placed on the Pink Sheets for irregular accounting practices and failure to file SEC paperwork)
• Selling a record number of cruise certificates with Carnival (adfter being summarily fired by Royal Caribbean)
• Purchasing a travel agency in Canada (after realizing that TICO required a physical presence)
• Attempt at a purchase of Hickory Travel Systems (after realizing that IATA endorsement was important)
• Focus on training in travel (only when pressure was felt from the industry that training was essential)
• Partnership with a "big" Chinese Tour Operator (and we all know how that ended)
• Statement that IATA was a card mill and a competitor (resulting in denial of the IATA endorsement--is anyone surprised?)
• $414 Million in sales (or $3160 per RTA)
• Record commissions paid (if you call less than $200 per year a record)
  

So, as I said, I see a lot of the "accomplishments" more as catch ups for YTB in the quest to legitimize the company.

So where does YTB go from here? I think nthat finally, YTB may be seeing the light-MLM and Travel is a Bad Mix. How ironic. Back on October 12, Kim Sorensen said the following in Travel Weekly:

Sorensen said that YTB was a "networking company, but we also put major emphasis on the travel side. ...We want to legitimize the concept with our production." On the other hand, he said, YTB makes no pretense of competing with "high-touch, high-service" travel agents; it is after the consumer who is comfortable booking on the Internet.

Well, since October, it seems that a lot of his "legitimizing has not panned out as well as he would have liked. Even their own counsel quit or was fired, blew a whistle, was re-hired, and then disappeared again. So obviously there was work to be done.

Back on November 5th, Arnie Weissmann said in Travel Weekly:

Whether or not the debate on both sides is ever stripped of its good-vs.-evil trappings, it may, if history is an indicator, play out something like this: Since successful MLMs don't remain MLMs forever (adding a new foundation level to the pyramid becomes increasingly difficult), they very often continue in their industry but drop the pyramid model.

Have we reached that point? I believe we may be very close. For the first time in the history of YTB, they have brought someone with travel industry experience into the ranks of their management and Board. There have been a number of relatively high profile scams perpetuated by the untrained RTAs most recently in Tennessee a few days ago. Just maybe there is something about being legitimate and selling travel, rather than renting websites. Maybe with each new scam that YTB needs to deal with, they are taking those two steps backward on the road to legitimacy.

Maybe Arnie Weissmann is correct. Is YTB dropping the pyramid model? If they do, it will be a brilliant move on their part and will almost garner them industry-wide respect and that elusive terms--legitimacy!

As I think about this, they have had a pyramid structure for years and made a very few people very wealthy. The lion's share of their income comes from the people paying $49 a month. This is a $6.9 million dollar income stream per month! Granted, most of that goes out to the pyramid, but if that pyramid is halted, that is a tremendous income for a legitimate host agency. And we are not even talking commissions and overrides.

So now if YTB halts the pyramid, what happens? Well, there are 131,000 people paying YTB a lot of money. As has been proven time and time again, most of these folks are not serious and are not earning any money, but there is a very small faction that are serious. Let's say that faction is 10%. Well, if YTB eliminates the pyramid, the Reps fall away--they were not paying anything so nothing lost. And eventually, after some serious capitalization benefiting YTB, 117,000 RTAs will also quit the program--how many months they will continue to pay on the hopes of riches is undetermined. That leaves YTB with a 13,000 RTAs that are serious about selling travel. Are they producing like a TTA? Probably not, but that at least know they can. Notch up the training a little bit and VOILA--the largest host agency in the nation earning top tier commissions. Legitimacy=MISSION ACCOMPLISHED.

Some may say this is totally improbable, but remember, YTB's Board answers to shareholders--period. They have no loyalty or allegiance to any Rep or RTA. They need to provide results for their shareholders. How did YTB get to the travel numbers they claim to have? On the backs of the 10% of the RTAs that are producing. The remainder are dead weight in terms of travel commissions, but a cash cow in terms of revenue. Reps? Biggest liability out there in terms of financials.

Finally, if you look at the number of MLMs that are popping up these days./ There is not a day that goes by (it seems) when there is not a new "get rich in travel" scheme in my email box. This only erodes the allure of YTB as a MLM company, so it might make sense to get out of that market right now. The reps that made money will be happy and can move onto the next industry, those that did not, may not have paid anything so no loss there. YTB can claim that the RTAs that made no money failed themselves (and they will claim that), and the ones that did, (small by a percentage and large by numbers) will continue on selling travel (not recruiting) in a large host agency model.

The beginning to the end is near and as I believe that YTB is beginning to see that indeed, MLM and Travel is A Bad Mix!

Is Hickory A Done Deal?

A little bird just told me that Coach and Scott are meeting with the Executives of Hickory Travel Systems this morning and may be finalizing a deal.

It remains to be seen what form of deal it is. One report was claiming YTB was acquiring Hickory Travel Systems and I heard another that said YTB was looking to utilize some of the technology that Hickory has developed.

My guess is that this may be a shopping trip for a new IATA number. Stay tuned, story developing!

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's Appeal To IATA: DENIED

This just in from Travel Weekly. It seems that IATA is one of the few organizations in the industry to stand behind their convictions. YTB has been denied any reinstatement. I suspect that this will drastically impact their Hickory acquisition and quite likely affect their Canadian operations.

April 16, 2008

By Nadine Godwin

YTB Travel Network won assurances that the company can continue to use its IATA numeric code as an ARC-approved agency, but it did not win reinstatement at IATA.

YTB had challenged IATA's termination of the agency before IATA's agency commissioner for the U.S. The commissioner, James Johnstone, found that YTB had "lent, subcontracted to or hired to a third party" its IATA numeric code and that IATA had taken "the appropriate step to enforce its right in the code."

Johnstone cited an IATA exhibit in which YTB told its referring travel agents (RTAs) that their ARC/IATA number identified them "as an industry professional allowing you to become eligible for potential perks, preferred pricing and other courtesies."

On the other hand, the commissioner said there was "no issue" on the matter of YTB's option to continue using the same numeric code as an ARC agency. He cited an IATA memorandum issued on April 10, which stated IATA was not claiming that its termination of YTB's accreditation "results in any impairment with respect to its ARC accreditation."

Therefore, YTB can use its ARC number but not with any reference to IATA, and the agency is no longer eligible for any IATA products or services, said the commissioner.

Also, YTB was directed to immediately cease using the IATA codes, including in connection with any ID or other credentials, and to immediately recall all IDs or credentials that include the IATA code. YTB also was directed to immediately cease using the IATA trademark.

YTB's attorney, Al Anolik, said YTB had already ceased using the IATA trademark on RTA cards and elsewhere.

What Comes With A Hickory Acquisition? Not Too Much.

On April 1, there was a funny April Fool's prank started by a colleague of mine and I picked up on it and posted that YTB was being acquired by Travel Acquisitions Group. A few days later, in a press release, YTB announced that they were seeking a company to purchase. Through some investigation I posted that the intended target was Hickory Travel Systems of Saddle River, NJ.

This will be an interesting acquisition , if it ever takes place and I wonder what YTB would get in the long run. I spoke with a mid-level colleague at Hickory and the word of YTB is spreading like wildfire. While the company will not comment specifically, I was told that on March 25, 2008, Scott Tomer and The Coach spent an entire day in Saddle River behind closed doors. I cannot say it was them with 100% certainty but I was told it was "a guy in a Hawaiian shirt and an older man wearing a YTB polo-type shirt". Toss in the fact that their jet filed and flew a flight plan from St. Louis to Teterboro, NF (6 miles from Saddle Brook) and I think we can all figure it out. Employees were told of a possible acquisition on April 8th, but no one officially named names.

But, Hickory has a long history in the travel industry and is composed of, get this, Traditional Travel Agents. Nervous agents. Agents who are frantically putting resumes out on the steet and actively looking for jobs. These same employees have seen Hickory picked apart over the years and recently lost Travel Leaders to TAG (ironic that the April Fool's prank involved TAG as well huh?).

I am not so sure how much is actually left of Hickory, but it seems that YTB may be circling the skies like a vulture to pick up what they can. But, if the employees are actively seeking new employment, what is the attraction? I know YTB is has tried to purchase their IATA accreditation by buying the small Ontario travel agency. Maybe this is just upping the ante? Maybe the loss of IATA accreditation was more of a big deal than they cared to admit?

But, I woudl hope that IATA is a bit smarter than that. After the accreditation does not automatically go along with the change in ownership. Hopefully YTB discovered this in their due diligence (which seems lacking to me considering the fiasco in China), or they likely will be buying an asset with few employees with a travel background and not much else. Just picture it now--it will be a clone of the existing HQ. A big building with very few years of combined travel experience.

YTB To Purchase Hickory Travel Systems

This afternoon, YTB filed the following with the SEC:

YTB International, Inc. (the "Company") is considering the acquisition of a wholesale travel company to complement the existing travel offerings to its Referring Travel Agents (RTAs).

At the current time, the negotiations for the potential acquisition remain at a preliminary stage and no assurances can be provided whether the acquisition will be consummated, and, if so, upon what terms (including the structure of the acquisition and the purchase price therefor).

The Company will not respond to questions or provide any further updates concerning the potential acquisition unless and until the Company enters into definitive agreements with respect to the acquisition.

It has come to my attention that the target is Hickory Travel Systems out of Saddle Brook, NJ. I have not received any response to an inquiry to YTB or to Hickory, but it makes sense in that I heard specifically that the target acquisition was a $17 billion dollar travel company. Furthermore, the jet flew to Teterboro, NJ on March 25, 2008 and was there all day. Maybe the acquisition might come with an IATAN endorsement?

Story developing and it will be interesting!