TRAVEL TRADE MAGAZINE REPORTS DIRECT ATTACK ON YTB
Nov 16 2007 – See link below for full article by George Dooley Travel Trade Magazine.
Rhode Island Agency Investigates YTB Business Model Summary
The state Department of Business Regulation (Rhode Island) confirmed that it is looking at the YTB business model, according its executive counsel. Counselor Berstein sent an email to John Frenaye, originator of the Anti - MLM petition, "MLM Travel Agents Cheapen Industry," The email confirmed that the Department was reviewing YTB to assure it was in compliance with Rhode Island state law. Rhode Island does require travel agents to be licensed.
Anyone remember how MLM travel companies got hit in the big government sweeps in the 90's? Travel Max, World Class Network (WCN) and New Concepts in Travel (NCT) plus smaller ones were hit. What triggered those big sweeps and raids? The Legal actions came from complaints from conventional travel agents that targeted those MLM Travel Companies for being card mills and pyramid schemes. Since the Pyramid Scheme charge worked back then - they will try it again!
Frenaye had asked Rhode Island attorney general's office Rhode Island’s rules and regulations on MLMs, card mills and travel agents. Frenaye has gotten over 2,600 travel agent and supplier signatures, on his petition against MLM Travel Companies. In an interview with Travel Trade (see link below), Frenaye, owner of Travels With Fred in Annapolis, MD, said state attorneys general may be a source of redress for travel agents and the industry faced with the proliferation of multilevel marketing schemes and card mills. FULL STORY
YTB INFORMATION RELEASE IATA/IATAN UPDATE
November 16, 2007
Valued RTAs:
YTB is pleased to announce our best financial quarter ever, followed by a highly successful event with Carnival Cruise Lines just last week. Some of you have expressed concern about the cancellation of our IATA/IATAN accreditation. We want to assure you that this does not, in any way, affect the ability of YTB or its RTAs to sell travel and be paid commissions from the sale of travel. We are actively working with IATA/ IATAN and our legal counsel to substantiate that YTB meets or exceeds IATA's/ IATAN's regulations.
As a company that has always upheld high standards, we applaud IATA/IATAN for ensuring the integrity of their programs, and hope to have our certification reinstated as quickly as possible. We thank you for your continued support and for the passion you share for YTB. We will continue to keep you updated on any developments as we move forward in our efforts to work with IATA/IATAN. We also wanted to answer some of the questions we, and many of the Directors, have been receiving.
Questions and Answers
1) Is YTB corporate working to get re-installment of the IATA/IATAN?
Yes. YTB and our legal counsel are actively working with IATA/IATAN to resolve this issue and substantiate that YTB meets or exceeds both IATA/IATAN's regulations and our own high standards.
2) Is YTB in trouble?
No, not at all. We just announced our best quarter ever, including our highly successful Sail-a-Thon with Carnival Cruise Lines. We are making plans for even more exciting opportunities for our RTAs and Reps, including great travel and event packages for the 2008 Beijing Olympics.
3) Are we a "legit" travel agency because of our remaining affiliation with ARC?
We are a legitimate travel agency for many reasons including our affiliation with ARC and CLIA, the extensive training and support that we offer our RTAs, our strong vendor relations, and the fact that Travel Weekly named us the 11th largest leisure travel agency in the country.
4) So, what did IATAN status do?
The only thing IATAN status did was offer an additional avenue for resources and supplier contacts. It also offered a card that must be earned and was recognized widely among the travel supplier community. The CLIA card offers many of the same benefits.
5) What is the difference between ARC and IATA/IATAN?
ARC (Airlines Reporting Corporation) is the organization that certifies us, and other travel agencies, to book travel and conduct business. We are in good standing with ARC. IATA/IATAN is a global trade organization, but their activities and accreditation do not have any effect on the day-to-day running of our business.
6) Can we still use the IATA/IATAN number at the time of booking?
Yes, the number will remain the same as it also serves as our CLIA and our ARC number.
7) Can we confirm that we are one of four agencies that had their accreditations cancelled?
Yes. However, we are actively working with IATA/IATAN and our legal counsel to regain our accreditation.
8) Are we going to issue new credential cards, since they say IATA/ARC#?
Until our issues with IATA/IATAN are resolved, we ask that RTAs refrain from using any materials that reference IATA/IATAN.
9) How is this going to affect the RTA's ability to earn commissions or receive travel perks? When calling the vendor, don't they need to give the IATA number?
It will not affect the ability to receive travel commissions in any way. Reduced rates will still need to be approved via the reduced rates department to determine eligibility. Hotels only require CCRA (in YTB's booking engine) to receive net rates (available in the travel portal); these rates are basically when booking with hotels directly. Some vendors will require an IATA or CLIA number while others want the YTB phone number as verification.
10) How does this affect YTBU teaching about credentials? Should we just omit the IATA/IATAN portion all together?
For now we should omit the IATA/IATAN portion, but we will continue to evaluate this, as we work with IATA/IATAN.
11) How should we address the IATA/IATAN issue in business briefing presentations?
If someone asks about it directly, assure them that the loss of IATA/IATAN accreditation does not, in any way, limit our ability to sell travel and receive commission. Also tell them that YTB is working with IATA/IATAN and our legal counsel to clear the matter up as quickly as possible
12) Does this have anything to do with Royal Caribbean terminating our contract?
No, the two issues are not related in any way that we can identify.
13) Why does it seem like all this bad news is coming at once?
As YTB continues to grow, we become a bigger threat to both brick and mortar travel agencies and other online travel sellers. That means that some of our competitors might attempt to impede our business progress in any way they can. Think of it as a "success tax." But know that YTB's entire team is here to support our Reps and RTAs and we will continue to fight the negative statements and misinformation about our company.
Thanks for all you do for YTB.
J. Kim Sorensen
President & CEO
YTB Travel Network
YTB SHOUTS ABOUT GROSS SALES BUT NOT WHAT COUNTS
Let's Look at Past Stock Reports
Total Revenues = $24,178,481
Online Store Sales and Monthly Fees - $17,965,361 or 74.3%
Training Fees and Marketing Materials sold to field - $3,361,152 or 13.9%
Travel Commissions Received - $2,537,694 or 10.5%
YTB is a travel company and their lowest revenue producer is travel commissions. YTB made more from training program fees and marketing materials.
YTB increased in the number of RTAs by 20% in Q1 of 2007 - but, travel only increased 1.2%. I doubt you'll ever see travel commissions received be more than 20% of YTB's income - and I'm being generous.
Of the $2.5 million in travel commissions received, they only paid out a mere $1,608,688 or 63.4% of ALL travel commissions received - TOTAL.
But, of the $21.3 million in other received revenue - it paid out - $16,136,795 or 75.8%.
For a travel company selling websites that people are to be selling travel on, this revenue stream only produced 10.2% in Q1 of 2007 and only 9% in 2006 - and in Q2 2007 - I bet it won't be over 12% - if that. We'll see in August when the filing is released if a filing is released. It might be better if one weren't at this rate. We'll see what happens in Q2 and Q3 2007. Think they will meet the 50% the FTC demands (Diagram above for Burn Lounge vs FTC)? Doubt it!!!!!
FLORIDA AG ATTACKS YTB AGENTS FOR PYRAMID SCHEME
The case file cited below relates to a civil -- not a criminal -- investigation. The existence of an investigation does not constitute proof of any violation of law.
Case Number:
L06-3-1113
Subject of investigation:
Rick & Brenda Ricketts Corp., d/b/a www.rickrickettstravel.com, www.rickettstravel.com, and Your Ticket to Paradise; and Dolan W. Ricketts, an individual, and Brenda S. Ricketts, an individual
Subject's address:
25400 U.S. Highway North, Clearwater, FL 33763
Subject's business: Business Opportunity; Travel (YOUR TRAVEL BIZ)
Allegation or issue being investigated:
Possible unfair and deceptive business practices in the sale of internet travel website opportunities or in the recruitment and operation of multi-level marketing systems promoting business opportunities and recruiting sellers of travel. Possible violations of Florida Deceptive and Unfair Trade Practices Act, Chapter 501, Part II, Fla.Stat., and violations of Section 849.091, Fla. Stat., prohibiting operating, participating in, or soliciting on behalf of a chain letter or pyramid sales scheme.
AG unit handling case:
Economic Crimes Division in Tampa, Florida
