You know…it’s Super Bowl Week. I had every intention of posting Super Bowl stuff all week because the industry has been very quiet as late. Does the industry not realize my intention for the week?

Sigh…I guess not. ;-P

So, you’ve probably heard by now, and may be a little puzzled over Norwegian Cruise Lines (NCL) and YTB Travel Network (YTB) who have ended their relationship. I actually knew this was coming, and may be able to shed some light on not only why this happened, but fill in how this industry works. I found out last week the day it happened and have already done some research concerning this crazy industry. I only remained silent to see if there would be any type of “news” on this subject. While I knew it would eventually come out into the open, there are others who claim to be well connected in the industry and I set a timer to see how soon any of them would catch on.

As it turns out, it took an actual trade publication to announce more than a week later what happened. There really isn’t much fanfare about it, with the exception of a couple of critics who can now pound their chest after a 15 month long battle producing a measly 4 suppliers who have decided that they no longer book with the industries #26th Largest Seller of Travel, which will evaporate all travel suppliers in the year 3025.

You may be asking yourself just why NCL would discontinue it’s relationship? And my response would be, good question!

If you look at some of the news that has come out of NCL lately, they are definitely shifting their focus. The same day I found out about YTB’s relationship, NCL announced an on-line checkin system for passengers, and the next day they announced they would double winter capacity out of New York City. Even yesterday, we found that NCL felt pretty proud of the new Mega Ship being built, but with all that pumping, they never released any news about it’s relationship with YTB, and as of this writing still have not commented on it. (Although I found comments in the trades interesting concerning these three links and announcements.)

There has been some shuffling of late at NCL at the top, with Kevin Sheehan being appointed CEO, and Andy Stuart appointed as executive vice president back in November. Elizabeth Finn also serves as the liaison between NCL and its online and Home Based travel partners as of December. Often, a new executive team likes to make changes, and this was more than likely one.

Another more important issue that I believe was the catalyst that set things in motion was the decrease in commission levels by 40% to YTB more than a year ago. While NCL elected not to renew it’s relationship, NCL’s 40% decrease could have been an attempt to attract attention and salvage something. Unfortunately, that’s not what YTB has come to expect from our preferred suppliers. Even with the reduced rate, either YTB or NCL could have come together to possibly salvage the relationship and promote their ships more aggressively like Carnival, MSC, and Disney has with YTB.

Instead, neither side did much of anything in an attempt to save the relationship, and it very quietly ended.

I can only speak of my personal preference as a business owner and Travel Agent when I tell you that if I had an opportunity to sell a cruise to a client, with the possibility of making 40% more in agent commission over another, who do you think I would promote?

If you’re thinking or being told that either dropping commission levels or upping commission thresholds are new or reserved for certain MLM’s, I can tell you for certain they are not. I reported here on this blog back in June how Royal Caribbean thanked their “dedicated agents” by upping their commission thresholds which caused a huge uproar in the industry.

As a matter of fact, (not the spin or fiction you read about elsewhere) Royal Caribbeans separation from YTB has not been all that beneficial for the cruise line. I don’t know if anyone else noticed, simply because so much attention is spent barking at YTB, but Royal Caribbean’s earnings call comes out today. Barkley released news yesterday and “estimates the company [RCL] would become precariously close to facing liquidity issues”. Hendrix, the financial analyst for Barkley’s also stated in another article that “Carnival must access the debt markets for $1.5 billion in 2009 and 2010, although she said the company is not likely to be constrained by its debt obligations. She said Royal Caribbean, on the other hand, must raise $4 billion in 2009 and 2010.”

That’s a hefty chuck of change, and may be part of the reason why Royal Caribbean continues to slash expenses, cutting their cruise capacity by 1/3 in Alaska.

And because of that news, Royal Caribbean stock fell some 13% yesterday in anticipation of the problems to come.

Suppliers terminate relationships from time to time for various reasons. I’ve written about Joystars issues in recent days and weeks. One of the big names we heard about was the Intercontinental Hotel Group (IHG) and the commissions that were stolen by a Joystar Agent. Just cause to terminate a relationship wouldn’t you agree?

But how many of you know that this same company (IHG) terminated it’s relationship with another company you may have heard of before? Back in 2004 IHG removed it’s inventory from the third largest seller of travel back in 2004. Why did IHG make a move like this? Because like YTB, the industry was crying and wanted to take back the industry. Expedia couldn’t provide the service, they wouldn’t last, and they’re not a “real travel agency”.

Where have you heard THAT before?

So what did Expedia do? They didn’t complain, they didn’t file any suits, they didn’t do anything but walk the walk and prove to IHG and the rest of the industry that they are the a real force in this changing industry. IHG did come to it’s senses and realized the huge market shift Expedia created in the industry. Just a couple years ago both kissed and made up and today IHG and Expedia have a multi year deal.

IHG and Expedia is just one example of how suppliers and agencies fall in and out of love. It happens to the best of them. What I suggest you do however, is model your response the same way Expedia did.

It’s really up to you how you want to respond to it. Me…I’ll just keep doing what I do, and that’s sell travel with literally hundreds of vendors and suppliers through YTB. If you need some help figuring out just who and how many, log into your Travel Portal and click the Agent Booking Resources to see for yourself.

I promise, it will put it all into perspective.

Now back to our regularly schedule Super Bowl XLIII programing. Go Steelers!

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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.

PS - If you're involved with YTB, sign up for our FREE Newsletter. As a Website Owner or Website Seller, we'll keep you up to date with all the latest news, acquisitions, and developments with YTB.

PPS - Subscribe to the Just Picture It Now RSS feed, (including e-mail) for all the latest posts and updates found right here!

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Do You ZamZuu?