Travel Weekly Was Snookered Again

YTB made the list.  As with the past three years, the numbers they present are an impossibility.

Red Flag #1.YTB reported $252M in sales as reported by the vendors. What travel company does not know, to the dollar, the value of travel sold at any given point or for any given period?

YTB reported travel commissions received of $12.2M.

YTB reported ARC sales of  $11.2 million. That is about 22K tickets issued (nat'l avg $500). In 2009, they earned no commission other than the $5 transaction fee. Hence, $112,000 of their commission is from the fee.

That leaves them with $12,089,000 in commission on leisure sales of $240,800,000.  This is a solid 5% commission.  What happened to all those high commission levels they like to use when they recruit? Leisure commissions for the weakest agencies are at 10%. YTB does about 70% of their business wiht Carnival and in 2009 they were at 16% with the cruise line. However, due to poor performance, their commission was reduced this year.

So if we take 70% of their leisure business (representing Carnival) and look at expected commission it looks like this. Leisure sales of $240.8M - 30% sales of vendors other than Carnival= $168,560,000 in Carnival sales.  NCFs are about 10% with Carnival, so subtract 16,856,000  for a commissionable total of $151,704,000.  At 16%, if their numbers are accurate, they should have realized $24,272,640 in commission from Carnival ALONE!  But somehow they claim that they only earned $12M TOTAL in commissions?

One would think that the RTAs might question this fuzzy math.  Shame on Travel Weekly for perpetuating this farce once again. It really does not take a lot of effort to expose the fallacies in the math. Unfortunately, Travel Weekly is either unable, unwilling, or incapable of doing so.

Hence, they have given YTB another platform to tout that they were on the Travel Weekly Power List.  And Travel Weekly likes to say they are the "voice" of the travel industry. Hardly!

Narc That Car Has YTB/ZamZuu's Attention

CORRECTION: The person who sent me the email below wanted to clarify that Coach did not name Narc That Car by name. He referred to it as "the license tags" business.

I received the following email this weekend:

I went to Dallas yesterday where Coach was speaking.  He spoke on not quitting and how the massive amount of directors who quit thought Coach and Scott were going to take the money and run just before filing for bankruptcy.  He said they quit before the inevitable happened.  Coach proved them wrong.  He said he has proven he and Scott are not quitters.  He said he and Scott could have done what most other companies do, claim there is a computer glitch and the commissions won't be paid on time this month while the problem is being fixed.  Then when all the millions of dollars from rep fees come in, take it, keep it, and tell the field, we are filing bankruptcy.  He said, NarcThatCar, recently claimed that scenario.  Coach suspects the NarcThatCar founders are on the verge of taking the money from the reps and keeping it, then filing bankruptcy.

So finally an admission of the massive defection. And it seems that Coach knows that the standard MO for MLM is to hold off on a payment or two to the field.

This raises a lot of questions!

Just Another Example

First off--congrats to this YTB website renter for attaining the MCC status with CLIA. She is only one of 12 who have attained it. And one of only 55 who have actually earned any credential (other than the ID card) from CLIA. Good job!

But, how seriously do you expect suppliers to take you with an email address like "famqueen"? I also wonder what clients think if you use that email address when communicating with them?

YTB Gets Some Breathing Room

FH Partners (the mortgage holder on the K-Mart) has agreed to extend the extension of the loan for another two months.


This is the loan which had required a payment in January which was not made, and still had not been paid at the end of the last fiscal quarter.

YTB was able to negotiate an extension until August 31, 2010. However, FH Partners included this language to supplement the original agreements which are still in full force. Link to document to follow.

FURTHER, IT IS EXPRESSLY AGREED THAT FOR AND IN CONSIDERATION OF THIS AGREEMENT, BORROWER HEREBY RELEASES AND FOREVER DISCHARGES HOLDER AND ITS OFFICERS, DIRECTORS, COUNSEL, EMPLOYEES, AGENTS, PREDECESSORS, SUCCESSORS, AND ASSIGNS FROM ALL CAUSES OF ACTION, CLAIMS, RIGHTS, AND CONTROVERSIES, KNOWN OR UNKNOWN, WHICH BORROWER HAD, NOW HAS, OR MAY HEREAFTER ACQUIRE WHICH RELATE TO, ARE BASED ON, ARISE OUT OF, OR ARE IN ANY WAY CONNECTED WITH ANY ACTS OF HOLDER OCCURRING PRIOR TO THE EXECUTION OF THIS AGREEMENT AND RELATING IN ANY MANNER TO THE ABOVE DESCRIBED LOAN, MODIFICATION AGREEMENT OR MORTGAGE OR THE PROPERTY DESCRIBED HEREIN OR THEREIN.  THIS IS A GENERAL RELEASE OF ALL POSSIBLE CLAIMS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER RELATED TO THE ABOVE DESCRIBED SUBJECT MATTER AND IT IS TO BE INTERPRETED LIBERALLY TO EFFECTUATE MAXIMUM PROTECTION OF HOLDER.

14 Sites That Change The Way You Shop

Mashable sent me a link this morning to an article titles 14 Sites Changing The Way We Shop. I opened the link and ...oh well, never mind, back to work!

Sound Familiar?

Yes it is free,  but if you send us money monthly, we will ....we will... oh heck, we will cross that bridge when we get there.

If you are looking for wealth creation, financial freedom, emotional well-being, privileged information, information on what is really going on in the world, or natural health remedies then you have come to the right place.  This is a special invitation for you to join the Global Information Network (GIN).  Visit the main website at www.globalinformationnetwork.com for more information.  There you can listen to an invitation audio that will describe what GIN is all about and read how GIN was formed and by whom.  I have been a member for nine months now and have seen how GIN has evolved and proven itself to be all that it claims.

When you go to the main webpage you have the choice of signing up as an affiliate or a member.   Joining as an affiliate is free and has some good benefits, but is obviously limited.  Joining as a member has infinitely more benefits and costs an initial due of $1,000 and monthly dues of $150.   You will see that this is an amazing bargain once you gain access to the member’s area.  It is hard to put a price on something that changes your life for the better.  I have yet to meet a member who has attended a live event or studied the information that hasn’t been changed in a positive and profound way.   Attending a live event and meeting the high-level members is life changing.  It is hard to describe the value of talking with and building relationships with the high-level and successful members that created GIN.  How much would you pay to have personal time with some of the most successful people in the world?  Even if you had the money to meet these people how else would you even get access to them?  I have had this privilege and would like for you to have this opportunity as well.

New Lawsuit Details

While nothing is new in this suit, here is a copy of it.

And it does seem to be virtually identical to the other iterations of the suit. Some have speculated that you can;t get blood from a stone--meaning that even if successful, YTB does not have the resources to handle ANY type of settlement or verdict.

Another person emailed me and suggested that the motive might be to just put a fork in it and grab whatever they can to cover some of the costs already incurred.

That county has a very plaintiff friendly court (as it's considered a judicial hellhole), and is known for it's frivilous lawsuits.  Most companies will settle before it ever gets to court, just to save on attorney fees.  It also takes forever (or so it seems) for them to actually go to trial, so the company will probably will be out of business by then. 

California RTAs Are Mad

 

Q:  What is being done to get back in with IATA so that California YTB RTA's can get ID cards once again. Right now I am paying the same $49.95 per month as other Non-California participands but I am deprived of an ID card with YTB and an IATA card. Note that most non-YTB FAM trips require a valid IATA ID to participate in the FAM.

A:  Peter- Please enter a support ticket in your travel portal and our great support team will be more than happy to help.

One More Suit For YTB

I am not sure if this is the refiling of the same suit on the State level or something new. The mention of Utah is a new one for me, and I thought Montroy was not one of the attorneys.  I guess we will see if YTB has any more lives left in their pocket to survive this suit filed on June 10, 2010.

A group of multi-state plaintiffs filed a putative class action lawsuit against YTB International and its officers, charging the company is operating an illegal pyramid scheme.

The plaintiffs, who are from Illinois, Missouri, Georgia and Utah, allege that Wood River-based YTB offers no direct selling opportunity, only a never-ending chance to recruit others into the program.

Attorney Christian G. Montroy of Montroy Law Offices in East St. Louis and Jay L. Kanzler Jr. and Brian J. Massimino of Witzel, Kanzler, Dimmit, Kenney and Kanler on St. Louis will be representing the putative class.

In their complaint filed June 10 in Madison County Circuit Court, the plaintiffs claim that the YTB program -- based upon selling cheap online travel agencies to recruits, then allowing the new recruits to retrieve others to do the same thing while requiring them to maintain certain levels of monthly services -- is a fraud.

YTB has raked in hundreds of millions of dollars in revenue through the use of independent marketing representatives, who are the salespeople charged with recruiting others to buy the online travel agencies, the plaintiffs say. In fact, about 75 percent of the $162 million YTB earned in 2008 was derived from the independent marketing representatives, yet a majority of the representatives -- about 80 percent -- failed to earn a profit, according to the complaint.

Those people independent marketing representatives recruit to buy the online travel agencies are referred to as referring travel agents. To buy the online travel agencies, the referring travel agents are required to pay $450 up front, then to pay $50 each month to own and operate their online travel agency, the suit states.

YTB represents to its referring travel agents that the sale of online travel agencies is a business opportunity allowing them to become travel agents, the complaint says. However, plaintiffs claim they could not act as true travel agents -- they weren't allowed to sell travel packages, process payments for travel customers, issue travel tickets or other documents to customers or receive travel commissions. Instead, they acted as agents of travel agents, only referring travel customers to YTB.

"In their role as RTAs, Plaintiffs and their proposed class sold neither products nor services," the suit states.

YTB promised that referring travel agents could earn as much as 60 percent of the travel commissions YTB collected from travel vendors for the customers the referring travel agents referred. In addition, YTB paid the plaintiffs for their roles as independent marketing representatives -- referring people who purchased online travel agencies. The plaintiffs served as both referring travel agents and independent marketing representatives.

In their capacity as independent marketing representatives, the plaintiffs could receive a refund of the $450 they paid to start the program if they recruited three people to buy online travel agencies. If the plaintiffs recruited six people, they could be reimbursed for their monthly RTA fee for every month the online travel agency remained active, the complaint says.

Not only YTB was involved in the illegal pyramid scheme, the plaintiffs claim. For example, defendant J. Kim Sorenson, who is president of Indiana Corporation CCMP, provided YTB with marketing materials and a 130-foot replica of the Statue of Liberty for YTB's 2008 annual convention in St. Louis. Defendants Meridian Land -- owned by defendants Clay Winfield and Dr. Timothy Kaiser -- provided YTB with office space to perform their operations. The plaintiffs claim such defendants are also liable because they knowingly took part in activities that advanced the pyramid scheme.

Lead plaintiffs include Illinois residents John Stull, Randall Quick and LaShonda Stiff; Missouri residents Faye Morrison, Jeff and Polly Hartman, JPH Development and Courtney Speed; Georgia residents Kwame Thompson, Jorge Gonzalez and Nikky Shotwell; and Utah resident Grace Perry.

In their nine-count complaint, the plaintiffs are seeking actual and punitive damages of more than $900,000, plus an order prohibiting the defendants from continuing in their conduct and other relief the court deems just.

Madison County Circuit Court case number: 10-L-608.

Brazil 2016?

From a recent post to Kim Sorensen's Facebook Page:

Jay Reid

Hey Kim I got a quick question for ya. Coach brought me to u on this question. Now I know this is very early but are we going to have any special travel packages for the 2016 olympics in brazil ? I bet we could sell alot of those....

June 11 at 11:04am · Flag

 Can't wait to hear the response to this one considering Beijing 2008 was such a stellar success!

Investments Vs MLM Travel

An interesting article in The Consumerist the other day on the warning signs of a scam:

1. Expectation of High Profits: Dont' be lured in by the temptation of a huge return. It could be a Ponzi scheme or a pump-and-dump stock fraud.

2. Low Risk: If someone tells you there's no risk, or even minimal risk, you should begin to ask questions. And, says the News, "A con man may become impatient or even aggressive if the question of risk is raised, a sign to walk the other way."

3. Urgency: Just like we wrote about with the oil spill cleanup scams, you should always be suspicious if someone is trying to rush you into an investment, especially an investment involving a significant amount of money. The more they push for your cash, the more you should sleep on it.

4. Confidence: Be wary of overly confident people offering investment opportunities. Often times, the intent of their swagger is to keep you from pulling out of the deal or asking questions.

5. Dressed for Success: Don't be fooled by the trappings of wealth. Scammers like Bernie Madoff and Marc Dreier lived lavish lives from the money they scammed. Yes, part of that was just greed, but another purpose was to convince investors that they were giving their money to someone who knew what they were doing.

6. The Power of Referrals: Swindlers will be sure to find money to pay back initial, well-connected investors, with the intention of having these folks spread the word to their moneyed friends. Again, be wary of word of mouth and look into what you're actually putting your money into.

7. Complex Investments: Writes the News: "The con artist loves to push poorly understood or little known products. These may be speculative inventions or any manner of official-looking or sounding investment vehicles. The favorites include gold bullion, offshore investments, private placements and even investments related to the foreign exchange."

8. Resistance to Questions: As pointed out above, if the person or persons dodge, deflect or flat-out don't answer your questions about the investment, your money would probably be better placed elsewhere.

9. No Third-Party Reviews: If you're told there's not enough time to have a third party look into the investment, or made to feel guilty or insecure about having another pair of eyes look it over, then it's probably best to walk away.

10. Nothing in Writing: If they won't put something in writing, then that means they don't want a paper trail. Anyone afraid of having concrete evidence of the investment is not someone you should be dealing with.

YTB scored a solid 80% from what I can tell!

Why You Shoudl Join A MLM Or Card Mill

A great piece from Peter Stilphen:

I have always received email from the MLM folks complaining about my negative views concerning the MLMs and card mills. Well, today I have decided to write again; an article with a positive title. I hope you like it. I realized that there were so many reasons to join an MLM/card mill that I had to make a list. They are not listed in any particular order.

• I want to receive commissions for booking my personal travel. I don't have time to be a serious travel agent.
• I enjoy taking advantage of my friends and family by convincing them to join my MLM so I can earn referral fees and discounts from their monthly fees.
• I fully enjoy deceiving my friends and co-workers and outright lying to them. Therefore, my MLM is the only way to go.
• My MLM tells me that all the store front travel agencies are closing and flocking to my MLM as a home based travel agent; and, there are no legitimate places to go that are less expensive to join.
• My MLM is breaking all sales records. However, I'm unclear about their bottom line, but that's not important. Of course, this doesn't apply in YTB's case. They are losing sales as their deficit bottom line is growing at a record pace.
• My MLM is the greatest Host Agency because I trust everything they say. Some of them even pronounce it is "God's" way.
• I don't need much training to join. I just wing it and have the supplier's sales departments do my work for me. I just need to pay fees to my MLM and defend them at any cost or without any logic.
• While I sleep, my website is earning lots of cash for me.
• I can sell other products like used cars, vitamins and flowers through my MLM. That way I can diversify my travel business.
• I enjoy checking into a hotel where I present the front desk person my phony photo ID card in order to obtain a travel agent reduced rate. I just laugh all the way to my room. It's unfortunate that Marriott has figured us out. The others are just slow, I guess.
• I love attending national travel agent conferences where I can flood the rest- rooms with my MLM literature and give out flyers to unsuspecting agents in the hallways that say, "Travel agents travel for free. Join (MLM) today."
• I enjoy going on Seminars at Sea because it's a cheap vacation and I can skip the educational classes.
• I always wanted to join a cult. I know of no other cults (MLMs) that have Team Captains where I create more scams under my MLM banner; freeing the MLM from accepting blame for anything.
• I just love those MLM conventions that attract 5000 of my closest MLM friends. The inspirational speakers remind me of those old time religious revivals where the evangelist tells us what GOD told him. The only difference is the evangelists are the management staff of the MLMs perpetrating another mountain of lies with actual cases of wealth building confirming their lies. I just love these conventions as they inspire me to go out there and find more suckers. 

NOTE: I told you the title of this article would be positive. I neglected to mention the content. I wish more suppliers would wake up. 

BP

Image via Wikipedia

Yesterday, I ran into a gentleman who owns a gas station. Unfortunately, it is a BP station and as to be expected (fair or not) his business is way off for the past month.  BP's stock took a hit when the explosion on the rig happened. And with each successive blunder, it tumbles even further. Right now it sits 62% below it's pre-explosion levels.

The gas station owner had no confidence in a quick resolution to the leaking oil, nor does he have much confidence in the ability of BP to overcome the stigma with which they are saddled.

What is sad is that this guy is having his business (and to an extent his reputation) harmed because of BP and his decision to associate with them several years ago. With little faith in the business, he is now looking into getting out of his franchise or selling his business while it still has some value left.

Can this be applied to any company in travel? I can think of a few!

Update

Glad you guys are having fun; but as usual, someone took it entirely too far.

As I have said in the past, I do not edit or delete comments. However, I will be turning off comments entirely.

Group Cruise Update

Just an update.  Since March 11th, the number of groups on the books with YTB has decreased by 156. This represents a 33% drop off in group business. Perhaps this explains why Carnival is reported to have reduced the commissions paid to YTB.

Update