Remember the rumor late last year that a MAJOR supplier was going to send notice to a MAJOR MLM/Card Mill that they will be parting ways January 1?.

While a name was not mentioned, you certainly know the drill.

Who could it be?

Is the cookie starting to crumble?

Are suppliers beginning to see the light?

The same unsubstantiated and bogus claims and speculation that’s simply thrown out there to cast doubt. You would think a former journalist would know how to confirm information with a “reputable source“, but that’s not important when you need to squash a company and a business model you don’t agree with.

Turns out the rumor of a major supplier cutting someone in this industry off was true. But it wasn’t YTB.

Sorry.

If there’s any rumor or bad news going around the Travel Industry, YTB seems to always pop up as the one who it’s got to be about. If someone hears about downsizing, it’s got to be YTB, not Liberty Travel. If a company is rumored to disappear in the middle of the night without warning, it’s got to be YTB, not Cruise Value Center. If someones not paying their Agents, it’s got to be YTB, not Joystar.

While all three of these agencies have lawsuits pending in court, who is everyone is talking about?

YTB.

I guess it’s true that dogs don’t bark at parked cars.

Most recently the hope was that if a supplier is going to cut anyone off, it had to be YTB. o supplier was named a few days ago after a dot was left missing, (Omitted from a list along with dozens of other suppliers we do business with) which conveniently justified pinning the supplier where they wanted, on YTB. Even after myself and others questioned the validity, the rumor persisted, until it was finally squashed by the supplier themselves.

Now there’s a novel idea, instead of guessing, ask the source. Who knew?

News confirming the supplier/agent rumor came late afternoon first by phone, and then confirmed by a trade publication that Carnival has cut off Joystar in this absolutely hideous and embarrassing chain of events.

Because Bill Alverson has a ties to a failed MLM back in the 1990′s, you can bet your bottom dollar that this will somehow give MLM a black eye. For the record, I never considered Joystar an MLM, it’s just not the same structure, and I don’t know if anyone would be able to accept that it management that runs a company into the ground, (think Enron here) not a model.

For the record, Carnival is not terminating Joystar because it’s a “card mill”, Carnival is doing what right for the Agents who booked their clients with the cruise line. Joystar has not and is not paying it’s agents their commissions owed them. Those who were with Joystar and now with another host can move future bookings, if they have not been paid in full, to the other host “upon written authorization of the traveler”.

I’m still attempting to put together a legal liability due to an involuntary bankruptcy petition that was filed on January 2nd. From what I understand the liability in this “involuntary bankruptcy” could land on Carnival if they continued to accept bookings from Joystar. If true, (and I’m still attempting to verify at the time of this writing) we could see other suppliers follow Carnivals lead terminating Joystar from future bookings. “Involuntary Bankruptcy” is not all that common and I’m sure there are links out there, but I don’t have the patience to understand “legal talk” right now.

Just don’t be surprised if you see more suppliers make this move.

Because I’ve written about Liberty, Cruise Value Center, and now Joystar issues in our industry, I’ve received both e-mails and phone calls from former Liberty Travel employees, Cruise Value Center clients, and now Joystar Agents who simply don’t know what to do. Clients with Cruise Value Center are the easiest to direct, as long as they have a booking number, but Liberty Travel and Joystar appear to be in a real quandary right now. What’s frustrating for me is that very few seem to care. These Agents, especially Joystar, have had income suddenly cut off.

Agents with Joystar have been without commissions since September and are struggling right now to come up with the money to fight for what’s owed them. If you’d like to help or if you are one of the Joystar agents that are owed commissions, you can find information here.

Maybe it’s time to start looking at and taking care of some of your own?

Author’s Edit: It appears that Norwegian Cruise Line has also ceased doing business with Joystar as just reported in TravelPulse. Effective immediately, “The company will no longer accept new reservations from Joystar or any of its affiliated agents,” an NCL spokesperson said. “NCL will continue to service existing Joystar reservations booked prior to Jan. 5, 2009.”

In another developing story, Wheel of Fortune has also gotten into the mix after a sister company of Joystar, VacationCompare.com, failed to provide the prizes to Promotion Consideration, who arranges prizes for game shows like Wheel of Fortune.

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I’ve been amazed; surprised actually over the amount of traffic I’ve been getting over both the Liberty Travel layoffs and Cruise Value Center shutting down without notice. For weeks I’ve seen both these searches add up to what are now top search terms for traffic to this site. The buzz on the internet from various boards and forums has been surprising to say the least.

The Cruise Value Center abrupt closing has more clients searching for answers which shouldn’t be a shock, since there were only some 65 employees affected in this closure. The majority of people who are in panic mode right now are the thousands of clients who have booked cruises through CVC who are wondering if they’ve just been scammed.

Unfortunately, for those who recently booked a cruise with Cruise Value Center they may not have a boarding documents coming to them. A report I found said that CVC never paid $2 million to $3 million in cruise fares to the cruise lines. That’s a hefty amount of money to be…well, sunk.

Liberty Travel on the other hand is more concerned with “their own” and I can’t even begin to count the number of people who feel they’ve been wronged in this whole ordeal.

Which begs the question, what do you do when your company cuts your pay or lays you off? You file a lawsuit of course! Yep, looks like Liberty Travel has gotten themselves in more hot water. This isn’t the first time Liberty has faced charges of unfair labor standards. They’ve already settled for $2.76 million, with $413,571 awarded to 245 travel agents from Liberty Travel offices across Pennsylvania. Another Class Action suit filed on behalf of 564 Liberty Travel agents, who will receive $42,500 each as compensation for their efforts.

Now I’ve been told that the traditional arena doesn’t have these kinds of problems. Suits because you feel you’ve been ripped off or scammed don’t happen to “legitimate agencies”. (Liberty is a Top 10 Agency according to Travel Weekly by the way.) Nope, lawsuits of this nature are strictly reserved for the likes of Travel MLM’s. The Traditional arena would NEVER have someone call them a scam, or even worse, actually file a lawsuit against them.

It doesn’t take much for anyone in this country to go out and file a lawsuit. While I realize all the focus and attention for some is how the Network Marketing industry leaves people high and dry. For the “average Joe”, they want something more stable, more secure. I have to wonder how the people caught up in the following list now feel about how “secure” their jobs were.

I’d try to call them to find out and report on it, but the problem is…I just don’t know where to start.

• CitiGroup 53,000
• Whirlpool 5,000
• Pepsi 3,300
• Xerox 3,000
• HP 25,000
• Goldman Sachs 3,260
• Chrysler 1,825
• Merck 7,200
• Sun Microsystems 6,000
• Yahoo 1,500
• Ebay 1,600
• Lehman Bros. Thousands
• Bear Sterns Thousands
• Enterprise 200
• American Express 7,000
• Circuit City Thousands Bankrupt
• DHL Express 9,500 Bankrupt
• Delta Airlines Thousands
• General Motors Thousands
• Ford Motor Co 2,260
• Starbucks 13,000
• Motorola 5,600
• Fidelity 1,300
• Mattel 11%
• Atlantis 800
• Morgan Stanley 19%
• B T Group 10,000 (Britain’s largest phone company)
• YUM Brands: (Pizza Hut, Taco Bell) Hundreds
• Las Vegas Sands Casino 11,000

I’ve got to ask, does it look to you like this myth of getting a good education and finding a job to go work for look all that secure to you?

For some, this might be the first time that they’ve been cut back or laid off. They’re the lucky ones. I’ve been involved with two companies in my career that have either been shut down or gone bankrupt in the past. I’ve also seen dozens of my co-workers laid off due to downsizing or cutbacks.

And some have the gall to tell me that Network Marketing is flawed. Doomed to collapse. I’m sorry, but going back to work for someone else who can hand me a pink slip whenever they feel they need to just doesn’t feel all that secure to me. My future and my income shouldn’t be determined by someone else.

I’ll be very happy to take that responsibility on thank you.

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I hate this kind of news, I really do. Yet another Travel Retailer has bitten the dust. What’s even worse is how this all came down. I’m applaud at how cold and callus this was handled and honestly, this story sounds like something Anti-MLM critics would come up with to attack an MLM as just another example makeing a HUGE fuss about how shabby, crooked, and flawed the MLM model is all over the Internet.

But alas, since this is a “traditional business model” and not an MLM, mums the word and nobody seems to be all that concerned. Even if it was brought up, the bad economy would certainly be a leading excuse to defend such deplorable behavior in the traditional business world.

Cruise Value Center, a cruise seller in East Brunswick, N.J., suddenly closed its doors on Monday after 14 years in business. Employees were sent an email on Sunday night, informing them that they don’t have a place to come to work Monday morning.

An agent, who spoke with Travel Weekly on the condition of anonymity, said it wasn’t clear whether they would be paid commissions on sales they had already closed, or if the cruise lines were going to be paid for cruises clients had booked.

“They left us all hanging,” the anonymous agent said.

Yep, sounds like something straight out of the pages of “MLM Myths and Legends”.

Too bad it’s not an MLM company huh?

Jeff Kavit handed over the reigns to a company called Travel Holding Entity out of Michigan last year, and of course couldn’t be reached. While the Cruise Value Center web site is still up, the 800 number no longer works. What’s surprising to me at least is that Cruise Value Center did an annual sales volume of $70 million and combined with Cruises of Distinction, also owned by Travel Holding Entity, was expected to produce $100 million in sales.

Ross Spalding, general manager of Cruise Value Center also resigned from his position (although it’s not specified when) “due to the unfortunate situation at Cruise Value Center.”

Back in June we were informed that Magic Johnson Travel folded abruptly, although not like this. Late last week, Liberty Travel consolidates and lays off a segment of its offices. Now with Cruise Value Center, I’d say the traditional travel industry is a real mess.

Too bad they don’t have the Government to bail them out like American Express does.

But as usual, the focus isn’t on any of this, it’s on little ol’ YTB and our critics seem to be in a tizzy about selling off an old office building for $1.5 million that we no longer need due to a 430,000 square-foot home office. (For the record, and to clarify the St. Louis Business Journal report, the Home Office is 130,000 square-feet on a 59 acre spread to expand even more.)

But hey, what do I know about what’s really important or relevant and what isn’t right?

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Last Friday I highlighted how the travel industry is still in rapid change, with Host Agencies gobbling up one another, along with Brick and Mortar Agencies vying for market share as they restructure their offices. As I’ve been studying the new reports I now have with WordPress I’ve noticed how both of these issues have a number of people researching both topics on the internet.

I’ve always been a firm believer of knowing as much as you can about the industry your in. This blog has been a real blessing, because the research I’ve done while posting has provided both insight and knowledge that I don’t think I would have otherwise. It’s kept me up to date with who the players are and how they operate. I’ve learned a lot over the years and have taken a number of ideas and applications that I like and now use in my own business, and the rest…I just leave it where it is.

While it’s speculated that nobody in YTB cares one iota about this industry, good friend Charlie Howe sent me an interesting .JPG image yesterday along with a question.

Why all the fuss was over Network Marketing when franchises like this (and many others) operate in much the same way?

Based on the diagram found on the Uniglobe web site, it sure looks like a pyramid type structure. I won’t get into all the differences, but the two most critical, in my view anyway, are:

• A franchise model is not limited to their startup fees being less than $500 as Network Marketing is.
• A franchise does limit the number of franchisees in each territory.

While I realize that limiting each territory is important to some due to the myth of “oversaturation”, not one person has been able to come up with one Network Marketing company that’s run out of people to prospect or sell. With companies like Avon, Mary Kay, Amway, NuSkin, HerbaLife, and PrePaid Legal still recruiting and selling product each and every day, you would think proponents of this myth would begin to question the validity of what they’re attempting to pitch.

Charlie and I (among other colleagues) tend to laugh at these critics who get all worked up over “all the people at the top making all the money”. They never seem to realize that this structure is inherent of ALL business models, with one major difference in Network Marketing. It’s entirely possible, and I can sight several instances in YTB specifically, where someone makes more than the person or persons above them. (Sometimes, several levels.)

To speculate that anyone under Bill Gates makes more than him wouldn’t compute. Likewise, if you dare make more than Donald Trump, “You’re fired”.

According the 2007 Income Disclosure Statement, YTB has several people who made more than the Top Executives at the home office. What do we hear from the critics time and time again? We’re paying Coach all these millions while he leaves us scraps. If you want a scrap, that’s entirely up to you, but by no means does it mean that you’re doomed to scraps when you have examples like those found on this Disclosure Statement.

This myth is nothing more than pure ignorance. Not because critics are stupid, but because they won’t admit the facts. How people ignore this type of structure is mute at this point, and I don’t know if anyone will ever be able to enlighten the most adamant of the Anti-MLM crowd. (It’s my personal belief that they do in fact understand, but admitting so runs contrary to the larger belief that they are right, and you are wrong.)

I also found this thread in one of the forums concerning one of the individuals who got caught up in the Liberty Travel layoffs last week. What I find so sad is that neither J.D. nor his friends even entertained the idea of going out on his own. Not that I would expect a bunch of baseball fanatics to know anything about “host agencies” or “independent agents”, but not even a sniff at going out on his own. No, this circle of friends teaches each other that you need to work for someone else.

By the way, while YTB is certainly a viable option for J.D., it’s not the only one available to him. Uniglobe has a “home based option” as well and I did send him an e-mail with the hope he wouldn’t just give up his love of this industry.

Oddly enough however, even after the company structure J.D and his friends appear to be so dependent on just laid someone off, they still believe that going back to work for another someone else equals “security”.

It reminds me of a story Tim Sales told in his Brilliant Compensation CD that explains why Network Marketing is the best most viable compensation structure available to date.

During the CD, and I’m paraphrasing here, one of Tim’s friends had been laid off and looking for employment for 6 months. While unemployment benefits were about to run out, the man was wrought with worry because he was unable to find anyone who would hire him.

Tim offered up the Network Marketing program he was involved in and his friend responded by saying, “No, I need something that’s guaranteed.”

And if you don’t get the irony that the only thing that Tim’s friend was guaranteed of was his unemployment going “buh-bye” you are in dire need of some brain washing. Meaning of course, cleansing all the limiting beliefs that you have taught your entire life. (A great place to start by the way would be here.)

Part of the reason this country is in the sad economic shape it’s in is because so many are waiting just like J.D., and Tim’s friend for the silver bullet or company that will solve their problems. If you choose to wait, that’s entirely up to you. I and others I know of on the other hand, like to create our own opportunities and economic stability.

It’s your choice.

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The Travel Industry has been in turmoil for some time and the constant changes due to factors both inside and outside of the industry have forced many in the industry to scramble for market share and positioning. You may remember Candi May’s carousel with Travel Professionals, Bye Bye Now, and Carlson Wagonlit before she finally found a home with YTB.

Just this week I found two articles of more musical chairs.

I’ve mentioned Liberty Travel a time or two before and do recall earlier in the year when an Australian company (Flight Center) had purchased the Agency. This week they announced that they will be closing 15% of their retail locations, or 30 of its 197 stores across the country. The closings will occur in Florida, Illinois, Maryland, New England and Upstate New York. While an exact number of jobs lost in this move was not disclosed, since the Australian buyout by Flight Center there has already been a loss of some 180 jobs.

This move has been positioned as a “consolidation” of sorts and employees will be moved around to other stores. That is if they’re actually performing. Other “dead wood” will be let go entirely. Shannon O’Brien, the company’s acting CEO, said outlets in undesirable locations will be closed for “a stronger shop network as our platform for future growth.”

It also looks like this move is necessary since Liberty will be costing Flight Center some $10.2 Million just in the second half of 2008.

Liberty Travel is currently ranked #10 on the 2008 Power List.

In another move this week, Uniglobe Travel Center, the host agency division of Uniglobe Travel USA, has agreed to purchase Magellan360. The sale will bring annual sales to $85 million with some of 400 independent contractors and home-based agents. Sales of $100 million are required to make Travel Weekly’s Power List, thus Magellan360 was unranked in the Travel Weekly Power List.

Magellan 360 has already been thrown around a few time in years past as stated in the Travel Weekly article.

Scott Ahlsmith, the Travel Institute chairman and Virtuoso vice president of global technological solutions, previously owned the 21-year-old business but sold it in January 2007 to Red Branch Technologies, which in turn is selling to Uniglobe. The transaction is expected to close on Nov. 30.

Uniglobe Travel Partners may pick up the spots it lost in 2008, (currently ranked 43 after falling from 40 in the 2007 Power List) and move is certainly a plus for Magellan360 affiliates. They will gain access to Uniglobe programs, including assistance with business planning, marketing toolkits and the opportunity to network with more than 750 franchised Uniglobe agencies around the world.

It’s never ending when it comes to these types of closures, purchases, and takeovers. The flux of this industry, while not entirely isolated to this particular industry, it does appear to me at least to be far more than any industry I’ve ever been involved with in years past.

Change is never easy, especially when it comes to a work environment. Nor does it matter if the change is positive or negative; it upsets the status quo. We’ll have to wait and see how all this shakes out for the companies involved. It will also be interesting to see how long this move lasts. From what I’ve seen, there may be even more before it all shakes out and settles down.

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