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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“This economic environment is unprecedented, and our travel agent partners need our unprecedented support,” said Vicki Freed, senior vice president of sales for Royal Caribbean International, in a statement. “Like everyone, they are feeling the pain, and we need to help them through this.”

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Are you as tired as I am over all the trash talk about YTB’s stock? Honestly, I’m sick of it. It’s as if YTBLA.OB is the only stock out there that’s down in the dumps. You’ve got to be hiding out in a cave somewhere not to realize that the markets overall are…well, in the toilet.

While the market has many running in fear, others are banking on the fact that the market will eventually turn in an upward trend. Most people would think someone would be crazy to actually be buying stock these days. Yet, that’s exactly what many of the super wealthy would have done in order to make their fortune. It’s times like these that would explain why Warren Buffett bought a considerable amount of stock at the end of the third quarter. (And if you’re thinking he sold a bunch, think again.)

The “Average Joe” simply can’t stomach what’s going on right now. That’s why we’re seeing the selling frenzy that we are, and also why critics appear to be focused on YTB’s stock specifically. It helps give the perception that the company is in dire straights and won’t last. Our third quarter numbers did a significant job is dispelling those rumors after their release. While there is a considerable amount of excuses following YTB’s profitable quarter, it did cause some of the most hardened critics to actually state that the numbers actually turned out better than they expected.

I would assume that’s why the focus has been shifted so quickly to the stock. It’s the one thing critics can point to that doesn’t look all that rosy, nor is bouncing back. The picture they’re painting is as if all other sectors are doing just fine, and it’s only YTB that’s having the difficulty holding on to its price. (Even with a profitable quarter.)

This attempt to spin the stock got me thinking how YTB compares to other stocks, more specifically, the travel sector since YTB of course knows nothing about travel. (Even after our 8 year run in this sector and being named in Travel Weekly’s Power List the last two years.)

By no means do I claim to be some type of stock expert. Far from it. But anyone with a pulse should realize that the markets, even after the election, continue to tank.

After pulling up various stocks to compare with YTB’s I started noticing that the broad brushed picture being painted isn’t what our critics claim it to be. (Big surprise, I’m sure.) Nor did any one sector in our industry lead in the categories I checked. About the only sector I was not able to check thoroughly at this time were other Brick and Mortars. (Most according to the Travel Weekly Power List are privately held.) I also tried to pick stocks that most everyone would know, even if you’re not “in” the industry. (Hogg Robinson Group, being probably the one exception.) Since there were so few public Brick and Mortar Agencies, I did use both American Express and Boeing who do own “Agencies” but obviously have diversification which neither look to either help or hinder their performance over the last year.

Here is an overview of the industry representing Airline, Cruise, Brick and Mortar, and On-line Agencies.

YTB (as noted by the blue dot) ends up pretty much “average” compared to the other stocks in the industry. Since there are so many in this sample, I’ve taken each industry and broken it down into segments for ease of reading.

Our first sector is how YTB compares to the Airline Industry. Companies are color coded and YTB will remain blue. Companies sampled with YTB are Continental, Delta, US Airways, and Northwest Airlines.

Next is a one year snap shot of Brick and Mortar Travel Agengies, which include American Express, Boeing, and Hogg Robinson Group.

Would a one year snap shot of on-line agencies look any better? Take a look at how YTB compares with Expedia, Priceline, and Orbitz.

And our last sector is the cruise industry as we take a look at both Carnival and Royal Caribbean.

After looking at this again, maybe Royal Caribbean should be the one in red…

So what gives? Why all the focus and fuss over YTB’s stock when obviously YTB appears to be on par with all the other companies in the market?

Because that’s what critics do. It’s something for them to talk about to give the perception that the Network Marketing business model is flawed or inferior to what they consider a tradition business plan. It’s all about perception to add fear and doubt about your choice in the industry.

They want you to go back to something more “legitimate” or “secure”.

So let me ask you. When it comes to the stock market, which one of these stocks above look to be more secure to you?

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Somehow they have this perception that because I associate and work with a Travel MLM that I damage their reputation as a Travel Professional. I’ve seen these folks do and say just about anything to warn you that I’m up to no good, my only interest is picking your pocket by recruiting you, and I couldn’t possibly have any interest in selling and servicing travel.

If you happen to be one of the ones reading this making those claims about me, I would argue that you are doing an outstanding job of damaging your own reputation and you certainly don’t need any help from me in that regard.

We also hear all too often that suppliers are cutting YTB off left and right. They hate us in much the same way they do. The vendors and suppliers appear to side with these overzealous Travel Agents and also want to rid the industry of our like.

I had an interesting post sent to me last week, and while I know very little about this individual, his quote speaks volumes about how the suppliers really feel about YTB but more importantly how they feel about these overzealous Agents and what they REALLY want to tell them.

Responses to this individual’s complaining to his employer were as follows:

“The MLMs don’t bring in enough business to worry about them.”
“We don’t treat them the same way as our traditional agencies.”
“We will take their bookings (money) and supply them our product.”
“Stop worrying about them.”
“You are not to discuss the MLMs with the agents or agencies.”

Of course these answers from the overzealous employee aren’t what he wants to hear and this cat can’t seem to get out of his own way to relieve his fears and misconceptions about Network Marketing. Thus you find this employee hanging out on a forum with other zealots that support his views. All while the employer remains unaware the employee refuses to abide by the employers wishes.

I’ve heard for a number of years that suppliers and vendors would cut YTB off. It wasn’t until last year, almost to the day, that one supplier decided to side with PATH (Professional Association of Travel Hosts) and terminate its relationship with the largest of the Travel MLM’s. Other than Royal Caribbean, I’m only aware of a Perillo Tours and another company called Celtic Tours, both of which never really did any business with YTB to begin with. (Neither were listed in our back office as a supplier.)

I find it difficult to terminate a relationship when there wasn’t a relationship to begin with, but that’s just me.

As I look back at the one public company who did side with the overzealous Agent Associations and this termination, the VP of Sales was moved over to Hotel Services, and shares of RCL stock has fallen from $42.24 this time last year to a 7 year low of $14.00 at the close of business Friday.

Not a very auspicious move for the company.

During this same period of time we have seen another cruise line come up with a very solid solution in minimum booking requirements concerning FAMs while maintaining its relationship with the 26th largest travel company in the country.

If you take a look at Carnival, they just announced they’ll be dropping their fuel surcharges moving forward, and provided a HUGE jump in Net Income for its 3rd Quarter results.

Hmmmmmmm, interesting.

I’m well aware of all the personal views and opinions that are circulating out there on the Internet about YTB and Network Marketing in general. Fortunately for the vast majority of the suppliers and vendors out there it’s not personal.

Its business.

For the overzealous and obsessed agents out there that read this blog on a regular basis, you may want to take note of how obnoxious YOU appear to the suppliers and vendors you’re attempting to recruit to your side. Based on how few have actually pulled the trigger and terminated their relationship with YTB and other travel MLM’s it appears that your concerns and misgivings about YOUR industry are falling of deaf ears.

While I’m sure they take the time to listen to you, and provide the lip service you’re looking for, behind closed doors they only care about their bottom line.

Don’t they?

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Every once in a while I do “The Dance”. My kids think its funny (just wait til they get older) and yesterday we had a lot of fun. I had a couple of reasons for doing the “The Dance”, and the kids pulled out “Evan Almighty” yesterday afternoon while I was busy on the phone and outlining the post for today.

Do you remember back in January when Carnival made the announcement concerning minimum booking requirements? It was speculated back in October that suppliers would follow Royal Caribbean’s lead and pull the plug on Travel MLM’s. Now almost a year later, it looks as if throwing “the problem” overboard proved to be costly. While another Cruise line solved “the problem” on January 9th when new CEO Gerry Cahill eliminated the abuse yet saved the account for future growth and profits.

Now it’s important to keep the supplier problem verses solution in mind as we move on to today’s topic. (Success leaves clues.)

Yesterday afternoon, CLIA stepped up to the plate and offered a very solid solution which I believe will have long lasting and very beneficial effects for everyone in the industry. (Well, almost everyone, but more on that in a minute.)

I first caught the story in Travel Weekly, and after doing a little research I found the new policy directly off CLIA’s web site. I’ll let you read both stories on your own, but I want to get to the meat of what this is all about.

“2009 ID Card applicants are required to be enrolled in, or to have achieved a designation (ACC, MCC, ECC, ECCS) in CLIA’s Cruise Counsellor Certification Program. Attainment of an ACC designation requires a program of mandatory and elective training options as well personal cruise experience, shipboard inspections and 25 cabin sales within the two year enrollment period.”

How do you like them apples? Just think. Nobody has to double dog dare anyone any longer about whether or not they actually know what their doing, if they are taking unfair advantage of the industry without giving back, or pretend that we’re only referring people to a simple web site to book a cruise without any support.

This solution clearly separates the pretenders from the players in the Travel Industry, and with the new Certification requirements that everyone will be able to follow and understand, suppliers will be able to tell exactly who is serious and who is not.

We’ve gotten to know CLIA or rather The Academy quite well since October of last year when YTB launched E-Campus with Dr. Marc Mancini, one of the most respected and admired trainers in the Travel Industry. I’d also like to point out that the minimum booking requirements in California in 2007 worked so well, that YTB Travel Network rolled these same requirements out for the entire company earlier this year.

The emphasis on actually training the RTA field is apparently working, and to see an association such as CLIA roll out a solution like the one yesterday should put an end to this illusion that someone like me or you embarrass and anger those that admittedly earned their rights and privileges in this industry.

These new requirements do raise a couple of rhetorical questions for me however. (Remember, comments here are now cut off to those who couldn’t communicate in a civil and respectable manor concerning their views and opinions.)

What will the few Traditional Travel Agents do when these requirements have been met? They can no longer claim that we are untrained and uneducated. They can no longer claim that we don’t support the industry. With all the time and energy now wasted in posting day after day, to have the major beef pulled right out from under them, what will they do with all the extra time on their hands?

Second, now that there will be whole new crop of trained agents in the field, how will that affect their bottom line? MLM’ers will have the same knowledge and Certifications most of them boast about. There will be far more of these new, hungry, and educated Certified Agents in the field who can now compete at the same level. Will this take away even more market share for them?

Third, how will this be viewed by suppliers? Can you think of any suppliers who are in a bind right now that need some extra revenue coming their way? If just 20% of YTB’s RTA’s go after this Certification requirement it will produce close to $100 Million in revenue and that’s just to qualify for the Certification. What happens when a company the size of YTB is moving that type of revenue to only 21 of the 24 Cruise Line Members?

This is a HUGE step forward in eliminating the illusions and myths out there concerning “Card Mills” and “MLM’s”, and I’m thrilled the CLIA came up with a solution to clean up it’s good name, much like Carnival did. From what I could tell, the Carnival move back in January certainly curbed the accusations against them for supporting a company like YTB.

From what I can read at this early stage, it looks as if the few boisterous Traditionalists who are bitter, angry and shamed right now also think this is a good move. (They are however having a difficult time in expressing their view without belittling those who will be helped most in this move.) It may not keep both sides happy, since one side never appears happy, but it does take away at least one of the excuses they use to attack an industry and people they clearly know nothing about.

I’m quite certain more about these new requirements will be discussed during some of the YTBU courses, (my first course is with Ann Sedgwick first thing next Wednesday morning) and also during Friday and Saturdays National Convention when new features and announcements will be made.

Which reminds me; my second reason for doing “The Dance” yesterday afternoon happened when UPS came to the door with my documents for the National Convention. It’s almost like
doing “The Doc Dance” when boarding docs arrive for a cruise!

Care to join me?

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I just saw this in Travel Weekly and wanted to make sure all of you are aware of this.

Remember back in October when Royal Caribbean said they were only going to support the traditionalists? I wonder what the 472 Agencies currently at 16% are thinking about RCCL now when they find out their potentially in jeopardy of dropping below 16% because Royal Caribbean is raising their sales quotas to maintain the commission levels these “supporters” currently enjoy?

In the Travel Weekly report it gives an example of an Agency now having to pull in another $500K in sales, otherwise Royal Caribbean is going to cut their commission starting in 2009. (The example being $1 Million in sales to $1.5 Million in sales.)

For these small time Agencies who are already suffering and finding it harder and harder to compete with market share this is a huge slap in the face to the supporters of PATH and other organizations who convinced them that terminating MLM’s was going to fix the illusion they have about why things are so bad for them.

I guess not.

I have to wonder at this point if these Traditionalists are owning up to the promises THEY made to Royal Caribbean to support them.

In another Travel Weekly Report it’s documented that Carnival is still making more per berth than Royal Caribbean, and while I don’t know if this switch to supporting Traditionalists is tied directly to these numbers, it has been mentioned before from the Traditionalists that they increase sales, and add bigger profits as a whole in the industry.

Again, guess not.

It’s also noted that Growth Fund threw overboard some 4,270,000 shares of RCL stock on Friday May 30th, which may or may not have been related to reports of this news circulating. My guess is however that this move is more related to RCL shares hitting new lows than any “Agency Issues”.

There is already speculation that other cruise lines will follow Royal Caribbean’s lead on this and up the commission thresholds for everyone, and quite honestly I hope they do. It should weed out some of the under performing Agencies who are just barely hanging on and make more room for the likes of YTB who’s already been documented to book some $13 Million with Royal Caribbean when the faucet was turned off late last year.

That’s the collective power we have as YTB. It’s also a big reason why only a few suppliers have actually dropped us. Money talks and with $414.5 Million booked in 2007 YTB is well on it’s way to dominating this industry, just like it was promised back in 2001.

I’ll devote more time to this later on in future posts but I wanted to shed just a little light at what I’m currently working on. While the following quote was printed back in September of 1999 and it did talk about another shift in the industry concerning the airlines, I think this quote could ring very true if the speculation does come to fruition concerning commission thresholds in the future.

“”When I entered this industry … I realized that the strong would survive, and strength — many times — equates to size,” he said.

“If you have five or six million dollars in sales or less, you are not going to get the attention from the [Cruise Lines] that you need to survive.”

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This has been one of the most interesting weeks I’ve seen in about 6 months. For some, it may have seemed like a week long April Fools joke that lasted an entire week instead of just a day.

We are seeing things in a whole new light this week. YTB releases it’s Annual Report on Monday, complete with Total Revenue of $141 Million and $3.2 Million Net Income for 2007, and the value of travel services booked on YTB’s booking engines was $414.5 Million, an increased 84% in 2007. On Wednesday, John Gilliam asks if YTB could be the next On-line Travel Darling and the combination of the two sent the stock upward from a low of $0.65 a share on March 19th, to $3.15 a share on the close of trading on Thursday April 3rd.

Now in a very strange twist, almost as if the stars have aligned in just the right order, we find the Cruise Line that started it all just 6 months ago has its credit rating lowered to “junk status” by Standard & Poor’s. According to Forbes, Royal Caribbean’s sinks to junk due to a heavy fleet investment, financed in part by borrowing, and rising fuel costs as adding pressure to the company’s rating being lowered.

Just weeks ago, Royal Caribbean agreed to work with the Florida Attorney General and will be refunding $21 Million that it slapped on customers back in November of 2007 for fuel surcharges. Maybe they should have kept the $24 Million they had in bookings with YTB and Joystar back in October instead?

After 6 months of trading since the Royal Flush, RCL stock is down 10.77% while the late attention and surge of YTBLA stock has increased 61.53%. It’s a very dramatic turn of events to say the least.

I was over on John’s blog yesterday doing a little reading, and I saw a very interesting comment from a YTB RTA that I want to bring to light. Of course, John’s not talking about the “good news”, and frankly I wouldn’t want to either concerning what’s going on, it doesn’t support his choice in trashing YTB every single day for that last few months. (Correction – he did give us a thumbs up for the stock rebound on Monday, but me thinks he was quite certain that our financials wouldn’t turn out the way they did.)

John’s currently busy avoiding the issue of YTB’s financials and attempting to ask all of us about ATA and what we are doing about all the bookings we have with them now that they’ve ceased doing business. (If anyone knows, please fill him in. He’s dying to know, but I don’t have anyone one on that airline, never have.)

Anyway, when I saw this comment, it put a smile on my face, and it’s one of the first true signs I’ve seen in some time that YTB is beginning to “get it” when it comes to this small group, and if you look, it’s a very small group, of people.

“…if all you TAs really believe that YTB is such crap…then just let the chips fall where they may.If you are so confident that YTBs business model is subpar to yours, then let it go and eventually you will be fine.”

I realize that’s hard to do, even for me. Yes, I’m just as guilty as everyone else. I’ve gradually come to this same realization, and now that I’ve removed myself from the negativity and limited thinking I couldn’t agree more with this statement. The chips are starting to fall, and frankly, it’s looking pretty good for YTB at this point.

What happened 6 months ago was a real shock and both common sense and business sense told me that you don’t throw a company overboard who’s booking $414 Million in travel no matter how small the individual pieces of pie are. Do you think Coke and Pepsi worry about what each individual vending machine does in terms of revenue? Not particularly.

By having millions of these vending machines all over the world is a big reason why Coke and Pepsi battle back and fourth between #1 and #2 year after year. That’s how they sell 1.4 billion servings A DAY.

We’re not out of the woods just yet. We still have IATA to battle with, and we know have a clear sign that is being worked on. I just want to remind everyone in YTB of what Tim and Georgia Dominey wrote in the foreword of my new book released this week, “Keep the main thing the main thing”.

We’ve come a long way in just 6 months.

This model works folks. It works for us and it especially works for the suppliers who have tapped into the pool of vending machines that are out there. There are certainly cases when a purchase from a “Brick & Mortar” would be better suited for the needs of the consumer. No one can deny however, how technology, combined with relationships works as a very effective and stable formula for success.

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