How To "Spin" a FAM…
Tuesday, December 18th, 2007
I’ve gotten plenty of calls, e-mails, and a few comments on my Blog about John Frenaye’s latest posts with claims that YTB is all about industry perks. While I can understand why he’s upset about this, and to a point he’s rightfully upset with us about this issue. It’s been a closely guarded secret in the industry for decades and for a company like YTB to announce to the world how the industry works is upsetting.
He’s even gone as far as directing us to a couple of presentations (found here and here) that explain how FAM’s work and what we as “Insiders” can take advantage of. While I personally don’t use these presentations, I’ve known about them for quite some time and I’ve even had them forwarded to me on several occasions for my review.
I’m going to attempt to be as far and as partial as I can about this issue because I happen to like John and we’ve developed a good rapport even if our introductions to each other were on totally opposite sides. I also happen to believe that to a certain extent he has a right to be upset. What we are exposing as a company has been closely guarded by the Traditional Industry and it’s very unsettling to have anyone divulge insider secrets such as these.
I also believe his positioning that YTB and these presentations about the FAM’s and perks are highly exaggerated. In both presentations, the presenters express what FAM’s are which are as follows:
“Many resort areas, cities, tourism boards, properties and vendors offer deeply discounted trips to Travel Agents to Familiarize them with their location. These trips are offered as “Perks and Courtesies” to Travel Professionals at the sole discretion of the host and are usually limited in availability.”
In both presentations, the presenter clearly states, (as I do) that these same properties do this in hopes that you will refer your friends and family to these properties. One of the presenters also went as far (as I do) that these same properties will not kick out a full paying fair just to put YOU in at half price, but if space is available, these properties would much rather get something rather than nothing by letting you as a Travel Professional stay at a reduced rate.
Both presentations present FAM’s as an “Industry Tool” to familiarize yourself with the property so we can talk intelligently to clients about the property. One of the Presentations done by James Prewitt (Level 3 Director and one of the GROWING number of Circle of Champions with YTB) even points out YTB actually sells Carnival Cruises, earning their Pinnacle Award the last 3 years in a row.
John’s statement concerning both Presentations that “YTB is selling them as if they are a guarantee.” is simply his perception, and clearly false. (Sorry John.)
I stated in a previous post last week, that it’s clear that John’s issue about discounting is not solely YTB’s. It was noted in an this article that Mr. Kelly with MyCruiseBookings.com did a little ghost-shopping of his critics posing as a prospective client with an offer from another agency for a discounted cruise, and in every case these agencies were willing to offer a 10% discount. I’ve been to enough seminars and supplier trainings to know that this is a HUGE problem for suppliers, and it’s not limited to just YTB.
John and others also need to keep in mind that the $226 Million in Travel Sales was gleaned from the same suppliers he’s now trying to pitch with his new found documentation. While his numbers don’t jive with what he finds from us concerning the SEC filings, these same suppliers and vendors numbers don’t jive with what he’s trying to tell them about all the “FAM’s” YTB actually takes advantage of.
John and the other Travel Agents out there that are reading this Blog, I’m going to try to appeal to you as a business owner and as someone who understands big business. It’s not about FAM’s, it’s about volume. I’m not saying that we don’t need to concern ourselves (YTB) with the way these FAM’s are being presented, because I DO understand your concerns, and I do believe that less emphasis needs to be placed on the industry perks and more
about running a Travel Business. It a valid, noble, and very ethical point.
I want to direct you to the middle of Johns commentary and a question poised to the vendors.
“Does Carnival tell its employees that they can take a 50% discount at WalMart? Does Collette Vacations market their product and offer a discount on Hallmark Cards? Do Apple Vacations, NCL, and the others dictate the level of discounts for OTHER companies? Hell no! So why are you allowing it now?”
Now, I want to direct you to a new program YTB has with Sprint, Staples, Dell, and Tom Tom. It’s called the “RTA Advantage“. Based on YTB’s shear size of 136,000 RTA’s these companies are offering us discounts of anywhere from 10% to 29% off services they offer. Based on your reasoning that YTB is costing vendors money by offering us Top Commissions why would a company like Sprint offer up to a 29% discount if it’s going to cost them money?
The same reasoning should apply to them as well shouldn’t it? Should Sprint, Dell, Staples and Tom Tom cut YTB off based on the fact that it costs them money to do business with us? Why sell at a 10% to 29% discount to YTB when you have a gazillion other people in the market using Sprint, Staples, Dell and Tom Tom paying full price?
Before I divulge the answer to this question, I’d like to hear some of your responses. I’d like to know just how and why this practice from any supplier, (Travel or Otherwise) is just bad business costing them money.
Should be interesting…
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Doug & Ronda Bauknight
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