CORRECTION: YTB Makes Power List At #52

The previous post indicated that Travel Weekly's Power List for 2012 did not include YTB. It appears that the initial online version only included the top 50.

However, the print version shows YTB at #52 down from #34 the previous year. The self reported statistics indicate 95 employees (down from 300+) and 12,000 outside "travel agents."

The numbers are self reported and unable to be verified due to the delayed SEC reporting.

Under their 2011 developments, YTB states they have returned to their roots as a traditional host agency, yet also states that they sold the "travel company" to First Travel Alliance who handles all travel fulfillment.  If First Travel Alliance is doing the fulfilling of all travel, aren't THEY the travel company? Traditional hosts sell travel, this statement seems to indicate that YTB does not.

YTB Fails To Make Power List

YTB, the multi-level marketing company, has been included on the Travel Weekly Power list for several years. Each year, their numbers are challenged and each year, it seems that they used a different method for determining what they reported.

The minimum cut off for inclusion in the 2012 Power List is $100M in sales and it appears that YTB did not make the list.

With YTB's failure to complete the federally required SEC filings for the year ending 2011 and the the first quarter of 2012, we can have no idea how many "agents" YTB actually was able to retain as they floundered between selling travel, coffee, insurance, girdles, electricity, and any number of other non-related products.

It will be interesting to see if the acquisition of YTB by First Travel Alliance or the return of Andy Cauthen makes a difference. Will YTB be able to pull it back up, or is the downward spiral. With a market cap under $3 million and their stock trading close to 2 cents for the better part of a year, it makes one wonder.

As I said in my previous post, time will tell. But if Travel Weekly is any indicator, it seems that YTB may indeed be done in the travel business.

Why I Think Cauthen Can Turn YTB Around

I spent about an hour on the phone today with Andy Cauthen the new CEO of YTB. And I am sure many of you may fall off your chair when I say this, but I think there is a new air of legitimacy for YTB; and if they can be turned around and accepted by the industry, Andy Cauthen is probably the guy to do it.

I have always said that YTB, if they were legitimate, could be the largest host agency on the planet. No one has denied that they sell a lot of travel. I have often said that they have a few very heavy hitting travel agents among their ranks. The unfortunate part was that they had a few hundred thousand that were the kings of the strike out.

My issue has always been that the way they recruited people cheapened the industry. It minimized what we do. It harmed legitimate agents and it harmed the suppliers. Some suppliers realized this (thank you Royal Caribbean, NCL, Celebrity, Azamara, and the rest) but most did not. They are beholden to their stake holders and a dollar earned is a dollar earned no matter how it came to pass. And to a degree I understand this.

I may be naive, but I have a feeling that in the next six months, we will see a new YTB emerge and one that will be accepted.  How do you like them apples?

Now, about our conversation. Last week, we exchanged a few emails and on his suggestion, I offered him some suggestions on what I felt a new YTB should look like. Essentially, I said drop the MLM, keep the $50/month, split commissions based on level of legitimate training, keep the overrides for YTB, and control the RTAs.

Surprisingly, he agreed. Mostly. He said the MLM is not going away, but that he appreciated my input and the ideas were solid. WOW!

How I understand it, the travel fulfillment will be handled by First Travel Alliance (FTA) which is (or soon will be) an unrelated entity.  FTA will "buy" their customers (agents) from YTB who will sell the opportunity via MLM. (Boo Hiss).  However, FTA will be run as a typical host agency. They will have training, preferred suppliers, and presumably charge a fee for their services. If YTB has retained even a fraction of their RTAs, this will be a mega host.

We talked about the bogus claims and the "travel for free" mentality and Andy assured me it would end. I relayed a recent email correspondence being discussed on an agent only forum and he assured me that the type of sales pitch would no longer be tolerated. He recounted a situation where a YTB RTA was putting fliers under cabin doors on a Carnival ship that said "if you paid more than $200 for this cruise, you paid too much." YTB received an irate phone call from Gerry Cahill. The activity was stopped and ultimately the RTA was terminated. Now this was the old YTB, but he was candid enough to recall the story and to tell me that would not be tolerated.

One thing that Andy emphasized was compliance. He wants to see YTB (and FTA) accepted into the industry again and he said that he will insist on being in compliance with all the rules, regulations, and conventions within the industry.  No more losing the IATA accreditation for selling ID cards.  If this comes to fruition, I am convinced that YTB and FTA will be well on their way back into the industry.

Cauthen told me that the California suit was a huge punch right between the eyes and the cause of YTB "losing it's identity" over the following four to five years. When California told them to change their ways, they did not know how. They tried to introduce all sort of other products--coffee, girdles, insurance, electricity, a shopping mall, and as Andy said, "elephant saddles made by Gucci."  None of which worked and further caused both YTB and their representatives to question the focus.

With the resignation of the former CEO , Bob VanPatten, the Board made a decision to put all the unfocused actions on hold. They pulled out of a merger with LTS and asked Andy to come back and see what he could do.  Andy is not a travel guy--he is a business guy and he is not dumb by any means. And for some reason, he has an affinity for YTB.

Call me crazy, but I think Andy is onto something. He was very candid with me and did say that he was brought in to affect change. And that if that change is not accepted, he will not stay. Those are pretty strong words.

Time will tell, but I got the impression that Andy is serious about turning it around. As much as I dislike YTB, I think they may have turned a corner. What remains to be seen is if they can pull it off like the Phoenix, or if the damage already done is too much to recover.

Personally, I spoke with Andy shortly after he left YTB. He agreed to talk to me then, but pulled out at the last minute but was adamant that he had nothing but good things to say.  Back then, I thought Andy was a straight shooting good guy.  And after today's conversation, that impression is reaffirmed.

I am not willing to give them a pass based on the word of the 7-day old CEO just yet, but I am very willing to give them a chance and see what happens.