The Facts Half-Truths About YTB--Part 2

Today we will continue our analysis of the half-truths on YTB's new website, www.TheFactsAboutYTB.com :

History
While this page seems pretty factual, it is certainly exaggerated, but exaggeration is not to be unexpected.

The two most notable exaggerations are in the travel sales figures. They claim in 2006 to have sold $226M but that number has never been verified and it was further clouded by YTB in the reporting to Travel Weekly by saying that $93.7M was by "third parties" and that $175.2 was from hosting of outside agents. When questioned about the number, Kim Sorensen admitted they did not have any actual numbers and the result was "gleaned" from a variety of sources--passengers reported from one vendor, dollars reported from another, and estimates of how much travel they thought RTAs sold on their own outside of the YTB websites. In 2007 they re-defined "third parties" as RTAs, so no one really knows. In 2007, they report $414M in sales, but they were a little bit more forthcoming to Travel Weekly this year and in reality it is only $211M sold by "third parties" (RTAs), so the average annual sales per RTA drops from $3160 to $1610. $1610 is pretty consistent with prior years and would reflect a self sold vacation. $1610 also represents approximately $96 in ANNUAL INCOME--which again is very consistent with prior years!

The other area of exaggeration is the number of attendees at their various events. While the numbers may indeed be accurate, they do not disclose that the number includes, friends, husbands, wives, children, cousins, aunts, uncles, and grandparents that happened to tag along for the ride. As a matter of fact, if you look at the photos of their most recent convention you will see a great number of children present and yes, they were counted as attendees.

TravelPulse/Modern Agent Sees The Light

Mark Murphy, President of Travel Pulse has a very compelling column today on YTB. In it, he has said

The YTB business is one where the focus is on recruiting and getting individuals to set up their own “travel store” online, as if customers are suddenly going to appear and start booking thousands of dollars of travel at some no-name website. Indeed, one needs only to look at the compensation earned by these “entrepreneurs” to understand that the only thing being built is the business owned and controlled by the people who actually run YTB and those who buy its over-the-counter stock.

In yesterday's editorial, Richard Earls of Travel Research Online also commented on the YTB situation

The list of grievances against YTB is a lengthy one. They recruit on the basis of “travel benefits” with an evangelical fervor that would make Jimmy Swaggart envious. But then anyone can be a travel agent, right? Take a look at the California attorney general’s suit against YTB and you can gather a pretty good compendium of the problems inherent in their “anyone can be a travel agent” sales pitch.

Travel Weekly Virtual Summit

Well there was a recap posted on this blog. I know that there were many people on the call, so let's discuss. Did Kim do a good job? Was he honest? Did it resolve any of the "misconceptions"?

If you missed it, the talk is archived here. But if that does not work, try this link and navigate to the Auditorium and then click on the white panels on the stage to get to the last one.

Let's discuss in the comments!

Ouch!

On August 3, 2007, Michael Brent sold 16.650 shares of his YTB stock:

3-Aug-07 16,650 YTBLA.OB Sale at $8.48 - $8.48 per share.
(Proceeds of about $141,000)

On October 1, 2008, Michael Brent sold 16, 667 shares of his YTB stock:

1-Oct-08 16,667 YTBLA.OB Sale at $0.60 per share.
(Proceeds of $10,000)

This is the stock of a company that:

• Claims they are poised to take over the travel world
• Is supposedly ranked #26 according to Travel Weekly
• Is facing a $25M lawsuit from the California Attorney General
• Is undergoing an investigation from the Illinois Attorney General
• Has seen a rapid exodus of RTAs and Reps
• Has lost their IATAN accreditation
• Has been "fired" by several vendors
• Has many complaints from the BBB
• Is mired in all sorts of insider deals
• Paid $6M (or maybe it was $8M, or maybe it was $2M) for a foam statue that no one wants
• Encourages deceptive recruiting, or at least looks the other way--Seligman anyone?
• Pays their average RTA slightly more than $100 a year
• Pays their average Rep less than $100 a year
• Collects 74% of their income from recruiting
• Claims they are not a pyramid scheme
  

Hmm..did I forget anything?

Fair And Balanced

Fox News claims they are fair and balanced. I like to think this blog is as well. We present facts, backed up by documentation and we are willing to make corrections when we make an error. Of course there is a great deal of opinion as well.

Speaking of opinion, the publisher of Travel Research Online has a very fair and balanced opinion piece on how the industry has arrived at the place we are today. Certainly the MLMs are an issue and they are called out. But are they the cause of the problem? Not at all.

We have said that the suppliers and associations are the ones that have allowed the problem to get out of hand. We have said that the suppliers and associations are the best suited to fix it.

Mr. Earls tends to agree and in this piece entitled "A State of Disarray", he challenges the industry suppliers, the industry associations and the industry at large to get their act together and police themselves

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

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

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

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

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

Protecting Professionalism

This was just published by Travel Research Online and I think it is an important point of view that needs to be shared:

Protecting Professionalism

This week's announcement that the California Attorney General's office was filing suit against YTB is now being followed on by an investigation by the Illinois Attorney General's office. It is welcome news that the states are finally taking action against the card mills and MLM companies that have turned an untrained evangelical horde onto the streets claiming to be travel professionals.

The battle is far from over. There is always another permutation of these companies flying under the radar. But what is remarkable in this particular instance is the way in which the travel media at large failed to take up the cry. True, Royal Caribbean and a few other suppliers cut card mills out of their rosters, but where was the travel media? By and large they actually became hives for MLM "travel agents". The bulletin boards and the online portals of major travel media outlets became at best a place where the issue was debated in an almost embarrassing fashion or at their worst where the MLM'ers actually held sway. YTB was placed on a "power list" by virtue of its "sales volume" without any serious journalistic questioning of its business methods or its impact on professionalism. I suspect that an analysis of the ranks of the circulation, electronic and print, of many of the media outlets would reveal an uncomfortably high percentage of pseudo-agents.

It is time for the media of the travel industry to take a real editorial stand on this issue, to get off the fence and denounce the business practices of companies that crank out travel agents in an assembly line fashion with no training and no real passion for the business. While the efforts of suppliers are appreciated, their concerns are not the same as that of retail travel professionals. It is the media that claims to be the voice of the retail travel agent and it is the media that can best amplify the efforts of travel agents who have taken a stand against the card mills and MLMs.

Richard Earls
Publisher
Travel Research Online

To the trade media I ask are you listening? Do you agree? Will you act? Agents reading this--please pass the message along!

A Puppet Tap Dances

It seems that j. Kim Sorensen, on of the most influential people in travel, is caught a little short on facts and original comment in the recent Travel Weekly Column, In The Hot Seat.

What did Travel Weekly's Nadine Godwin get out of Kim that was not already sent out by Scott Tomer as "talking points"? Not too much.

This "interview" was so full of deflection and avoidance it was not even funny. He could not even tell how many RTAs were in the program! This is something I might expect a CEO to know.  If you want the Cliff's Notes version, here it is:

1. How many RTAs do you have? (I don't know but more than the beginning of the year)
2. Do you envision converting all RTAs to the franchise model? (I don't know and I don't want to talk about that)
3. What portion do you think might switch? (I don't know but if they don't we won't get rid of them)
4. Isn't this risky? (I don't know, but we know how to recruit people)
5. Can you explain the reason for the switch? (I don't know but we will have a manual ** available that will tell us what we need to know)
6. Will this improve your supplier relationships and enable you to reclaim IATA and RCCL? (I don't know but the general public has a better perception of a franchise than they do of network marketing)
7. When will you make a final commitment to the switch? (By the end of the year)
   

Well, he answered 1 out of 7 questions or about 14%. Which incidentally is higher than the success rate of the people in the RTA or Rep programs, but still a failure by a long shot.

He obviously knew what the interview was about and I can understand not being able to discuss the details, so why agree to the interview in the first place? Did he think Nadine was going to talk about the Statue of Liberty?

In any case, the CEO of YTB came off looking like a dolt. He lost all control of the interview and really sheds a poor light on his company. Essentially, he has said he knows nothing...which is par for the course since he has no background in the travel industry.

** It seems like YTB is hanging an awful lot on this "manual" that will be forthcoming. Does anyone want to take a guess as to what company might be producing the manual and might be getting some overinflated sales on the manual?  Perhaps a privately held company that is owned by the Principles of YTB that is reaping $8 million dollars for a stage prop?  Just a guess on my part!

Travel Weekly Power List

Well, the comments have been bursting at the seams about YTB moving up the ranks in the Travel Weekly Power List. Congratulations to YTB. It is certainly not a surprise with all the recruiting they did last year. The number was even reported back in April when they released their 10K to the SEC.

I am not going to dive into the report until I can get some explanation on a few key points. To do so would be futile (as it was last year) when in the end game, nothing was proven on either side other than everyone had a different opinion about what the numbers signified. Without hard numbers, people can "legitimize", "glean" and "amass" all they like. And it is my understanding that YTB was (for the dates this report included) unable to produce a true sales report because they did not have the software.

• $414M--this was reported as a note in the 10K and from what I was told by Doug Baughknight, YTB had no method to trackk travel sales unitl March 2008 when they installed a SAP program. If so, I imagine the $414 is anothe number "gleaned" and I also suspect that it was included as a note (and not in the actual financials) for this reason. Is the number in the ballpark? Probably, but is it exact? Doubtful.
• $211M--Last year there was a question of this number. This year, they have clarified this somewhat by saying that this number reflects the sales made by the RTAs. Well, since RTAs are the only ones selling travel, how much did they sell? Was it $414M or $211M. There is a big difference.
• $29.7M--ARC Sales. More on this later.
• 85% Corporate Sales--this has to be a mistake. Since when has YTB been a player in the Corporate travel market? And if true, why is the ARC number so low. ARC (airline) sales account for the vast majority of "corporate" sales. So, if YTB is 85% corporate that is $351M in corporate sales and the ARC sales should have been in the $250M range.
• 10% Leisure Sales--this is their market, and if this is true, the RTAs likely woudl have been responsible for $14.4 M or $21.1M in sales.

Maybe someone is confused on the terminology. Maybe there was a mistake? But for now, those are the 5 areas where I have questions. Maybe someone can answer here, or I can wait till I hear back on the query.

This year, Travel Weekly took it a step further and required an executive with each company to "certify" the numbers. I am not so sure what that mean or what the ramifications are if they are not "certified" accurrately; but that is up to Travel Weekly!

MLMs Scurry To Rhode Island

Well, as expected, Rhode Island has opened the floodgates for the MLM crowd. As the Craigslist post from last month showed, they are justs foaming at the mouth to get the pyramid built in Rhode Island.

But Travel Weekly is reporting that the Governor has opened the floodgates. While Rhode Island is one of the few states that DOES have a requirement, I feel that it is a horribly wrong move to rescind it. This will be a terrible move for consumers and I an anxious to see how the number of scams and travel rip offs increase. Remember, Rhode Island is in a hugely populated area drawing from New York and Boston!

Travel Weekly Looks At YTB

In a May26, 2008 column by Travel Weekly Editor Nadine Godwin, she brings up a lot of points which were made on this blog about a month ago. In a nutshell, that YTB seems to be on the decline in certain key areas. Emphasis mine.

From the column:

A review of the company's SEC filings for the last two years indicated that the company in the last two quarters attracted fewer new referring travel agents, known as RTAs, than in the third quarter of 2007, when the number peaked. Also, its rate of RTA retention dropped dramatically in the last two quarters. During that two-year period, YTB's reports show, there were some calendar quarters that produced a net gain in new RTAs that was as high as two-thirds or three-quarters of the number of sites sold. The last two quarters, however, produced the lowest retention rates of the past eight. In the first quarter of 2008, new site sales came to 31,000, but the quarter's net gain of active RTAs was only 7,749, or the equivalent of 25% of new recruits. There was also a slight decrease, 7.5%, in the number of websites sold in the first quarter of this year compared with first-quarter 2007.

YTB continues to earn considerably more by signing on RTAs and supplying their technology, just as RTAs are earning considerably more by bringing in additional affiliates.

In the first quarter this year, sales of the sites and monthly fees accounted for 79.5% of YTB's net revenue, and sales of education programs and marketing materials to RTAs amounted to another 7%. Travel commissions and services accounted for 12.5% of revenue.

Calculated differently, RTAs on average generated quarterly revenue for YTB of $244.64 for site sales and monthly fees plus $21.68 for educational materials and $38.37 in travel commissions.

The payouts revealed a similar relationship, with 58.7% of revenues paid in marketing commissions to RTAs and 9% of revenues paid in travel commissions.

Again, in dollars per RTA, that came to payouts of $180.59 in marketing commissions and $27.75 in travel commissions.

Is the trade media finally coming to the conclusion that this blog did when it launched in October of last year? Can it be the trade magazine that has heaped praise in the past may indeed be seeing that self reported numbers may not always be as accurate as promised? Can it be that others are generally coming around to the notion that MLMs and Travel are indeed a bad mix?

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!

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.

Orbitz Customer Service--Even THEY Get It!

After a week of listening to the MLM crowd say that what they offer is no different than Orbitz, Expedia and Travelocity, I found a great article on Travel Weekly that sort of spins it a different way. Seems that Orbitz is migrating away from the "go to our website and book" mentality and are providing service. Just Picture That! Did you hear about Expedia opening a brick and mortar cruise store in Redmond? Hmm, Just Picture That!

Orbitz said each of its specialists has completed training and spent significant time in their select locations.

Destination experts are currently in place for the Hawaiian Islands and Mexico's Yucatan Peninsula (Cancun, Riviera Maya, Cozumel). Orbitz plans to add specialists for Cabo San Lucas, Puerto Vallarta, the Dominican Republic, Orlando, Miami, the Florida Keys, Jamaica, the Bahamas, Las Vegas, Southern California and Puerto Rico.

"For new visitors to popular places like Orlando, Las Vegas, Hawaii or Cancun, access to a travel expert with local insider knowledge can be invaluable in helping make decisions that will ensure a memorable trip,” said Tom Russell, Orbitz Worldwide’s group vice president of brand marketing.

As the TTAs have been saying for the past year, consumers are getting tired of the websites. They are looking for service and are migrating back to agencies. For those opposed to agencies, they will migrate to customer friendly websites that offer service. Unlike this one. FYI, all of the big online agencies have always had trained support for the customers. The MLM crowd seems to overlook this fact. Seems that MLM is just making one mistake after another when it comes to travel, but I guess that is to be expected when most of the recruits and all of senior management has no background in the business.

2007...A Very Good Year? Maybe Not!

Over the past month YTB has had quite the run on their stock. It went from well under a dollar to over $4 and settled in around $3.60 for a recent close. All of this is in anticipation of, and response to their annual report which was released on March 31, 2008.

First off, congratulations to YTB for pulling out of a stock slump. Secondly, congrats for selling more travel this year than last.

I have skimmed the 123 page document, and while comments and other blogs are all cheering the reported $414M in sales and the recent stock trading levels, I want to point out some parts of the document that are being overlooked by the YTB zealots and should be a concern to anyone considering investing in this company or considering joining as a Rep or RTA.

• Regarding the recent run up of the stocks. I have said I am not an expert in the market by any means, but according to page 9 of the annual report, there are only 366 shareholders of record. With director bonuses all being paid out in stock, it appears that the vast majority is held by executives and directors--the report does not say, but I would venture a guess at 75%. With that type of influence, and that much riding on the success, any manipulation would be easily attained.
• Another interesting tidbit is that YTB is losing a ton of RTAs each year. At the end of 2006 YTB had 59,736 RTAs operating sites. During 2007, they recruited 139,239 more. Yet at the end of the year, they only had 131,065. Do the math...59,736 + 139,239 = 198,975 (potential RTAs). 198,975 - 161,065 = 67,910 RTAs that dropped out of the program. That is a huge number and really disproves the rhetoric espoused at other blogs.
• YTB claims to be a travel company, yet once again, recruiting accounts for the vast majority of their income. 73.4% of the income comes from recruiting. 14.5% comes from travel sales. Even more concerting is that almost 10% comes from selling marketing materials to RTAs. And even more interesting is that while most traditional travel agencies saw an increase in their income in 2007, YTB's numbers were flat in terms of a percentage of income. However, their percentage of sales for recruiting rose 1%. Certainly with the addition of all the RTAs, the base commission and overrides should have increased. So where is the focus here? I think we all know the answer.
  
• And to just put this in perspective to the non-YTBers, the total commission paid to RTAs was only $13.4 million--or an average of about $100 a year for each RTA. The total commission paid for recruiting was $80.5 million--or an average of $265 a year for each Rep. Participate in both programs and you too could earn $1 a day!
  
• But let's take a look at the travel sales and commissions. YTB earned $20.4 million in travel commissions. Everyone has agreed that 10% (across the board) is a good number for commission percentage. With this number in commissions, their sales would have to be $200,400,000. Now I know all about the not paid till traveled argument, but I think it is safe to assume that all travel booked in 2006 has now been traveled...and this number does not even match last year's sales figures. The true sales figures from YTB are likely to never be disclosed. And I suggest that anyone should treat any of these claims with skepticism.
  

• The management practices also have a lot to be desired. Some quotes from the filing:

• 
  
• We did not maintain sufficient competent personnel to maintain an appropriate accounting and financial reporting organizational structure. Specifically, we did not maintain personnel with an appropriate level of accounting knowledge,experience and training in the selection, application and implementation of generally accepted accounting principles commensurate with our financial reporting requirements.
• We did not maintain proper internal controls over expenditures and accounting for certain liabilities which resulted in unrecorded liabilities and expenses.
• Our Board of Directors failed to maintain documentation of actions that it had approved. Formal Board of Director meeting minutes were not maintained during this reporting period. As a result, certain share-based transactions were not recorded or were recorded incorrectly in our financial statements.

• 
  

While there certainly is a lot of growth, there has been a lot of loss and a lot of mistakes made. YTB has set themselves up nicely for the TW piece for 2008 by inserting the $414 million number into the financial reporting document, but also covered it's liability to the SEC by saying that they are unable to forecast their numbers.

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!

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