Gag Order From YTB?

  

A friend of mine is an RTA with YTB and attended the Travel Training in Arlington, TX last weekend.

It seems that half the day was devoted to Kim Sorensen talking about YTB. However, he refused to accept any questions because of his concern that "problems would arise from the questions." So what is Kim hiding that he cannot tell the people that essentially sign his paycheck?

The main training in the afternoon was Spring Tours and apparently they were not training; but telling the RTAs that they plan to train. They are planning on training RTAs to sell Spring Tours and they will have a webinar on November 18th.

Spring will be a hard sell since they are not USTOA members and consumers have no protection. Also, apparently the Spring alliance has irritated (to a degree) Globus, Trafalgar, and Collette who see them as a competitor.

One interesting tidbit did emerge from Spring Tours however. Apparently 131,000 RTAs were able to sell 48 packages to China. That is 48 out of the 1500 that were prepaid. RTAs you need to get on the stick!

A Fitting Image For YTB

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

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

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

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

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

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!

Act First, Think Later--A Tale Of Olympic Proportions!

Remember back in November when all the world was abuzz about fabulous Olympic Packages and a commission of 25%? Remember when I pointed out that none had been sold early on? Remember when I pointed out that later still none had been sold?

Well there is a good reason. Apparently YTB has partnered with an agency that had no right or authorization to sell tickets to the Olympics.

As I suspected, but only had confirmed from the IOC last week, tickets purchased by Shanghai Spring Tours must remain for sale to residents of China--not tourists. You see, 75% of the tickets are allocated for the Chinese!

Even Sorenson agreed when he told Travel Weekly last month that, "YTB is no longer marketing Olympic tours with tickets to the games in Beijing."

But the story gets more interesting as all the RTAs and Reps were saying that they were still offering the trips, but just calling the Olympic tickets "special events". As is typical, the YTBers had all sorts of stories about this. It was a copyright issue. They had such a response that they had to pull back and do the sales by lottery. And I even heard that they were completely sold out.

Well, I spoke with a man named Joe Jarvies who is the International Coordinator and Liaison to YTB, for Spring & Mandarin Tours a few weeks ago and he shed some additional insight. Apparently, Shanghai purchased $3 million dollars worth of Olympic Tickets for this program. Yet as China's "largest tour operator" they did not know that they were not for sale to non Chinese? And no one at YTB looked into this either? I wonder who will ultimately eat the $3 million? Joe indicated to me that their "workaround" was to not sell the tickets and to offer them as a "gift" for visiting China--so all the YTB clients could be given a "gift" when they landed. Yeah, I can see consumers flocking to that special deal!

When I spoke with the IOC, I was told that in order to use the term Olympic in any marketing or sales promotion, you needed to get approval from the IOC. This is mandated by the Ted Stevens Olympic and Amateur Sports Act. The IOC said they had not given Shanghai or YTB permission to use the logo or name and had issues a Cease and Desist letter. In addition, they have apparently turned over the improprieties on behalf of Shanghai Spring to the "proper" authorities in Beijing.

Not sure what that all means, but in a nutshell, YTB partnered with a company that had no right to sell Olympic packages. Someone is holding the bag on $3 million dollars. And once again, an exclusive program by YTB is disproved. I just wonder if any RTAs or their family purchased these trips and how they are handling the refunds!

Did Someone Cancel The Olympics In Beijing?

I just noticed that it appears that the Olympic Packages have been pulled from the front travel page of the RTA sites.

Back in February, I questioned that the sales were not materializing as hoped and was given a direct link to the sales site by someone that left a comment. Apparently that link is now dead.

A little more searching, and I was able to get to the Spring-YTB page and while there is a lot of talk about China, there is nothing on the Olympics. And this page was even a bit of a challenge to find. What happened?

• Was Shanghai Spring not able to pull through?
• Was YTB not able to produce?
• Was there a mistake?
• Another misunderstanding?