YTB, A SCAM, A CULT OR THE REAL THING? by Peter Stilphen, MCC

I'm planning to spend my time in the coming blogs to discuss, in my opinion, the good and bad guys in the travel business especially the MLM companies, and the "card mills."  This month we will concentrate on YTB.  Keep in mind that the opinions shared are my own and not of any company or organization.  I have researched the information provided, therefore, my comments are factual.  Again, any opinions expressed are my own.

I don't know what it is about MLM companies and card mills that I like to write about.  It's probably because I am the CEO of a nationally known Host Agency and am much closer to their activities than most.  Most importantly, I never like people taking advantage of others for a profit unless both are on equal footing.  MLM's have always been around and probably always will be.  At least I will do my small part in bringing these people out from under their rocks.

You will need to know a little bit about YTB International and then we will get down to the good stuff.

YTB International, a public company since 2004 has a multi segmented business model and operates through three subsidiaries, YOUR TRAVEL BIZ.COM, YTB TRAVEL NETWORK INC and REZCONNECT TECHNOLOGIES INC.

YOUR TRAVEL BIZ is the marketing arm that establishes online travel agencies and compensates them via a multi-level commission structure.  YTB TRAVEL NETWORK contracts with online travel agencies providing online booking systems, fulfills orders and pays commissions.  REZCONNECT operates VACATION CENTRAL providing online booking engines and also franchises travel agencies such as in Wal-Mart stores.  I understand that they have lost most of the Wal-Mart businesses.  VACATION CENTRAL also claims to be a "Host Agency."  If that is the truth than I'm the tooth fairy.

YTB and its subsidiaries are very controversial in the manner in which they do business and recruit consumers to sell travel as well as participate in their alleged pyramid schemes.  They operate mostly outside the mainstream travel industry and are not members of the more notable travel organizations either by choice or simply due to ineligibility.  YTB claims to have over 60,000 consumers signed up to which they have issued photo ID cards.  I use the word consumer as opposed to travel agents because the vast majority of their base are naive consumers who constantly fall for their MLM skullduggery.  To be fair, there is also a group of experienced and serious travel agents among the mix.  Many of them are beginning to see the light and moving on.  The others that hang in there like the possibilities that dual income potentials offer, but they are the ones who think they can become rich quickly.  Like any MLM scheme, the ones at the top or the one who came in early are the only ones that stand a chance.

YTB and other similar companies are still courted by most of the travel suppliers.  The reason is simple.  Sell to whoever will buy your product.  I can't blame them, I would probably do the same.  I feel that many suppliers now see the advantage of a well trained travel agent and are now offering all kinds of resources to the serious travel agent.  That is where the future lies and not filling up their fam trips with hobbyists seeking a cheap vacation.  MLM and card mill members far outnumber the legitimate travel agent.  We need to turn this around.

I have personally talked with YTB affiliates on the phone and at travel shows and have received mixed comments.  My Host Agency and other Hosts regularly sign up the more serious YTB agents.  Other YTB people live and die YTB.  Trying to talk to these people is about as difficult as trying to talk someone into leaving a cult.  They are totally brainwashed as this is the effect MLM companies leave with you.  You just need to visit their chat rooms to see this.  Others are confused and those are the ones who will ask me and others questions.

There are very few YTB agents making any money.  MLM schemes have been around since the cave man and will be around until our world is gone.  There have been a few successful and profitable MLM companies around such as Mary Kay and Amway but YTB is not one of them.

Here are a few facts about YTB you may want to know if you are contemplating becoming a follower.

*   YTB has never made a profit since it started operations and has accumulated 14 million dollars in losses to date.

*   YTB has not filed its financials for all of 2006 and to date.

*   YTB has been de-listed from the O-T-C Bulletin and now shows on the so called "Pink Sheet" because it failed to file its financial reports with the Securities and Exchange Commission.

*   YTB's stock has been on the rise lately due to its overzealous affiliates running up the stock price.  YTB refers to these affiliates as "Gung Ho's."  At the same time one of the corporate officers has been selling his stock.

*   YTB revenues come mainly from selling business opportunities rather than from selling its core product; travel.

*   YTB guarantees a minimum commission for recruiting even more participants.

*   One of YTB's operators include a minister whose primary accomplishment is building a large church congregation.

*   YTB's compensation program is tied to the promise to issue large blocks of stock at a set price much below today's market price.

In summary, multi-level marketing is not illegal.  Most collapse because of potential abuses in the business structure that creates the condition of a Ponzi scheme.  Many MLM companies collapse within 5 years.  What are YTB's real numbers?  Can YTB's current business model ever be profitable?  Would regulators be concerned if YTB participants are being encouraged to form an affinity group to buy the stock?  What are the legal and financial effects of promises of large blocks of below market stock into an MLM organization at $1.00 per share?

Consumers or potential travel agents looking at YTB and other MLM companies and card mills such as Pro-Travel, World Ventures, Travelwize, Coastal Vacation Club, Travelogia, VIP Travel Team and GTI should be careful and don't fall for the hype, gimmicks and high pressure tactics.  If you are serious about travel seek out a reputable Host Agency and not one of these bums.

Next month's blog will be more on the MLM agencies and the card mills with recommendations.

Comments

[Joe]

It is funny reading these blogs. The fact is, YTB like virtually every MLM, is a scam. In fact, there is a recent article in the Chicago Tribune exposing YTB (www.chicagotribune.com/travel/chi-1209insiderdec09,0,2865134.story)

The fact is, like most MLM's, it is about selling distributorships and promotional literature, not the actual service or product itself. According to the article, "In 2006, YTB made 72 percent of its revenue from the sale of online travel stores and monthly fees and 15 percent from travel commissions." Which, by the way makes it illegal (i.e. 70% rule), but the gov't does not prosecute because there are way too many MLM scams to keep up

And, in terms of money to be made: "At the end of 2006, YTB reported it had nearly 60,000 registered travel agents. For the year, it paid those agents about $4.9 million in travel commissions, or less than $82 per travel agent."

Numbers do not lie... All you MLM'ers do what the rest of us do...get educated and work hard. Stop clinging to false hopes in the MLM nonsense industry...god I hate MLM...it begets some of the sleaziest low life scum bags imaginable

[Infepneege]

Why do confines think that possible auditions are attractive? He shcked around and britney spears porn trailers his ruffians apart, and my hizo found its just beautiful nude women to his asshole.It rested there a sexy celebrities topless till Wan readyed bravely and I formerly and my pain head popped into his asshole.

[craig]

i am a proud member of ytb and i want to say my peace. i have been a rta for going on two years and to date they have paid me every dollar they owe me. i here all this talk about a pyramid, most of you don't know what it means. just know this we(YTB)are hiring everyday and we are helping people try, key word is try and make a difference in their future and the future of their families. i hope you are not the loayal worker of one of these big companies that will be selling out soon to some over seas conglomerate. a lot of you are upset because you were a traditional brick and mortar rep robbing people and now the field is even.
i will say this everytime something doesn't go your way doesn't mean there is foul play. people are always afraid of the unknown and if you don't understand it isn't our fault that you don't understand. in closing, just because expedia advertises a lot on tv and have people at a set rate of pay are they trust worthy. no. you are just comfotable because yor friend used them. until you can go into your job(just outof broke) tomorrow and refer a friend and they pay you, you will never understand. just think for my 495 i have a travel agency, flower shop, event and concert tickets, car dealership and to much stuff to mention. the good thing is on monday you can go back to earning your 22,500. a year and i will collect my check because someone cared enough for me to use my site and help me feed my family.

[Omar Martinez]

I have read your so called report; you have not done your home work properly and are misrepresenting the value YTB has as an organization. It has helped many of us RTAs to have the hope and opportunity to a "B" plan. This is a company publicly traded in the stock market, YTB International Inc. (YTBLA), this is not a pyramid, it is a legal organization with a great compensation plan protected by a legal document called "The Bill of Rights". I take offense to your comments as I am sure all of the hard working RTAs who are trying to make a living by selling travel. The competition is fierce, but we persevere, because we have the best support available throughout. Please get your facts straight and be more professional when doing your research before posting your opinions, you do more damage than good by the lack of information you provide.

[SorryMom]

I'm not fancy. But know this, my dove:

[Mike Lewitz]

Ytb Travel is such an excellent company with so much to offer. As an International MLM Trainer, I see so many people who sign up with YTB Travel and they get so excited by the “POSSIBILITY” of making huge money in a short time that they loose perspective and start making decisions not based on concrete realities. Worse, many of these MLM hopefuls have no idea about even the first clue about real concepts of marketing. They base their entire futures on pure 'HOPE marketing,' where they HOPE they'll make a bunch of money by trying to talk to a bunch of people or putting out fliers. This is EXACTLY why there is a +98% failure rate in this industry.

Hope is NOT a solid foundation for any business, and it's a DEFINITE road to failure -especially in YTB Travel. Everyone's heard the cliche’ Failure to plan is a plan to fail. YTB Travel is not a job ...it's a real business, no different than owning a McDonald’s or any other retail store, but just because it doesn’t cost +$100,000 to get started doesn’t mean it shouldn’t be approached just as seriously with solid foundations in place that include a clear understanding of PROVEN marketing concepts that work for every successful business empire.

Marketing is both an art and a science, and nothing about marketing is based on luck or hope.

You can read up on more of this in one of my BLOGs at:
http://approachmlmright.blogspot.com

Here’s to the success of everyone in YTB Travel!
Mike Lewitz
Phoenix, AZ
Certified International Marketer
http://www.mlmultrasecrets.com/ytbtravel

[Steve B]

Back in 1986 when I was introduced to A.L.Williams all the same negative people said that was a scam also. 22 years later many of my friends are multimillionares and still are with Primerica. I listened to all the negative people and quite back then, this time with YTB I have a second chance and am taking full advantage of the opportunity. Stay negative and stick with your corporate jobs making other people rich you day will come.

[John F]

David Hall---get a clue! Does it cause you any concern that your get "all that" for $49.99 a month? Does it concern you that your group of RTAs paid in $109Million in to the program last year and only received $13million in commissions for their efforts? Three months and you are rolling in the travel dough? I am sorry, but I call BS!

[Desiree Williams]

YTB cost $500 to join. Website costs $50 per month. If you want that card to get your cheap stuff it's another $200. Then you need to suck all of your friends and relatives and co-workers in just to get your money back because your commission checks will be around $10 because most people just buy cheap flights - commission 1-5%.

[australiaste]

with a pirates with a it is a visit become by year. It is plants

[Pam]

Why would Bob Dickenson even consider being on board of YTB - and even agreeing to it. Then recanting because "it doesn't fit with his retirement plans."

[Kyle]

Thank you LaToya B. for clearly demonstrating Peter's "Brainwashing" comment.

[Jeff Davis]

have you seen this video http://www.youtube.com/watch?v=6sRwSinIksI

[Stephen Gardner]

This guy is so full of crap!

[Steve]

As of May 2008, YTB is paying out $10,000.00 Bonus checks weekly. Now to get that you must be able to sign up 100 Reps. $10,000.00 WEEKLY !!!...And people are saying it's a Scam??? Wait until after the National Convention in Aug. Already over 35K signed to attend. Soon all those who are screaming Scam will be saying, as did those Bill Gates asked and did not join him, I wished I had.

[Steve]

As of May 2008, YTB is paying out $10,000.00 Bonus checks weekly. Now to get that you must be able to sign up 100 Reps. $10,000.00 WEEKLY !!!...And people are saying it's a Scam??? Wait until after the National Convention in Aug. Already over 35K signed to attend. Soon all those who are screaming Scam will be saying, as did those Bill Gates asked and did not join him, I wished I had.

[David G]

It is evidently clear that you do not like YTB. Unfortunately for all of us if your passion wasn't so much in trying to make YTB look bad but instead on showing what you can do for us as an alternative, Than maybe you would have sounded like an inteligent individual and a warning flag to industry. But be it as it may, hate is just that HATE and I can feel it in your tone. And by the way what is wrong with having one of your accomplishments be that you ran a successfull christian congregation. It is people like that can do most anything with love in their heart for others and make many follow. You should stop tring to preach your hate of YTB and begin to really look deep into the subject and find where you have failed the industry, and how you could have helped it be better. Here once again you have shown everyone that spitefull bashing to shine a light on something, only brings that something into a spot light, and if there is no blemish or wrong doing on that something. Than the spitefull person like you and your agenda will also be clear as day everyone. Thank you for your blog nonetheless, I'm sining up with YTB. You helped me make up my mind with your hate. thanks

[me]

it's a scam...any of you who are ytb agents are making the big boss rich.

[denyse]

YTB has chosen to take advantage of four (4) current trends:

1. Travel - a $7 trillion industry

2. Baby boomers - 76 million boomers have been dissected, analyzed, and pitched to by modern marketers, who reinforced a sense of generational distinctiveness. In the 50s, businesses focused on stuff for kids.... 30 million boomers... and still growing. Gerber (the baby food company) was huge in the 50s. Toys.... there was an enormous growth in the variety and quantity of toys. ("You can tell its Mattel; it's swell!") And TV, just coming into its own, focused heavily on kids' shows. Disneyland.... a 50s thing. (Disneyworld.... a 70s thing, paid more attention to history and thrill rides.... things of interest to young adult boomers.) The stylish cars of the 60s and 70s -- a direct response to the boomers.

3. The internet - the standard communications protocol used by every computer. The Internet can powerfully leverage your ability to find, manage, and share information. Never before in human history has such a valuable resource been available to so many people at such little cost.

4. Home Based Business - I'm sure you've heard Robert Kiyosaki advise us on the benefits of a home based business and network marketing.

Our Founder's goal is to create 10,000 new millionaires. I love his reasoning. He doesn't want to create millionaires just so we'll have money. There are so many issues in our society, like homelessness, drug addictions, depression, hunger, etc. Why do they exist? There are plenty people with money! But they don't share that money to combat our society's ills.

If 10,000 additional people become millionaires and have been taught how to be good stewards of the money they have made and give back to our communities, maybe we can lessen and even alleviate those ills. I love that! How many corporate founders even care about societal ills as long as they make money?

So, is YTB a scam. That's for you to decide. Corporate Narc did an independent investigation because of the many rumors that have circulated. Here is their conclusion:

"In conclusion, is there a YTB Scam? It doesn't seem so. At the very most YTB is another company recruiting people to work for and market their business idea. What's wrong with this..... Answer: NOTHING. The ownness is on the customer and business owner. Do your research and you'll be fine!"

OK, the question is why pay $500 for something that you can get quite cheaper? YTB adds value to that $500. We are not provided with one website, but we get four different travel websites to target different markets. This is a multi-million dollar business for only $500. It's all in how you look at it! ;)

Stop by and check us out: http://www.Rx4Fun.info

[denyse]

I HAVE to respond to these questions:

A few questions to the YTB members:

- why should a professional travel agent, who is paid 90%-100% commission, join YTB and get paid 60%?

Because not only will you get 60% travel commissions, but I bet you never get a $1,000, $10,000, $50,000, $250,000 or even a $1,000,000 bonus where you are!!!

- what will happen to your YTB recruitment process when travel supplier enforce higher standards for who can get travel discounts? ie. $5000 commission earned per year.

We will comply just like we now have to earn $1500 in commissions. Maybe we'll be able to get a higher quality person in the recruitment efforts who actually will book travel. Maybe then everyone will be satisfied. Opps maybe not because we're still network marketing!!

- what will happen to YTB if suppliers go direct to consumer and stop paying commission to travel agents?

The same thing that will happen to every other travel agent....duhhhh. You'd better hope that doesn't happen either!

denyse

[Ken, ACC]

Now YTB is considering a franchise model and what will happen to the RTA who will be paying $495 startup? Will YTB have to charge higher to weed out RTA.

[Sina]

I wish brick and mortar travel agents didn't feel so threatened by network marketers (work from home travel agents).

I know one company that has got it right. I took a chance to see if I would like it and I have not had any bad experiences. Not all network marketing/MLM companies try to get your money and run. Believe it or not, the emphasis is on selling travel. The larger your sales force, the more advertisement, which leads to sales travel package sales. I would not lump everyone in a particular industry into one category.

We are not publicly traded like YTB, and thus do not have to answer to investors. I enjoy my business so much, that I signed up to take a travel agent course at a local college. The company offers training also, but I like getting info from more than one resource. That's just my personal preference.
Before I joined the travel business, I was already self-employed and working from home as a computer consultant. And before that I worked in corporate america for several years. I find that network marketing, in the travel industry, to be the most fun and gratifying. I'm doing what I love, and I have more time to spend with family. All I can say is that failure is a personal experience. Just because someone else failed at something, doesn't mean you will.

Get informed and don't take what everyone tells you as the gospel (good or bad). Experience it for yourself. Better to have tried and failed than to have never tried at all. Thank goodness I didn't remain skeptical (as I did at first), now that I've joined this network marketing travel industry, I'm loving it.

I purposely omitted the name of the company I joined because I do want anyone to feel like I'm sellig them. There is at least one good company who has a leader with a heart of gold. We are truly like a big family. You would only know that if you were part of it. Hope this information let's someone know that whenever anyone tries to lump everyone into the same group (saying all MLMs are scams, and all home based travel agents connected with MLMs are just taking people's money), it usually comes from fear, not fact.

[Derrick]

IF SOMETHING SOUNDS TO GOOD TO BE TRUE.............IT IS. YTB WILL BE BANKRUPT THIS TIME NEXT YEAR>

[Tammy P. Mcintyre]

I will be filing with the Attorney General of Texas concerning this scam that has already been filed in California. The company is only concerned with creating Power teams and that is the only place you will make a dime. The Power teams does not work on your Travel site at all. Matter a fact YTB probably have in the access of 100,000worthless travel site. California states the median is about 39.00 and your monthly charge is $49. So I will take my complaint to the AG's Gregg Abbot and see what happens. I will also lodge a protest to make people aware of this fraud.

[Coastal Package Owner]

I read your article, and would like you to explain to me why you label Coastal Vacations Club is a scam/pyramid scheme? I own the package, I have used vacations, and I saved over $700 off my last vacation in Florida. During the peak period of Spring break!! My hotel stay was FREE for 3 nights (I paid only taxes--best deal on line was $120 per night), I recieved 2- 7 day tickets to Sea World, & I recieved 2 tickets to Disney quest (ALL were FREE!!!) I was able to get a great discount on a mid-level car rental ($115 for 8 days!!!) Plus, I saved $100 on each of my flight tickets. And no, I wasn't required to attend a timeshare. Finally, my travel was booked through a legitimate travel agency NOT through Coastal....They are NOT a travel agency NOR do they sale travel. The savings you recieve in the package more than pays for the cost of the package. Now granted, I wasn't in a 5 Star Hotel, BUT the Radisson is pretty nice and well known. So, where is the scam / pyramid scheme here? Coastal sales a REAL product, that can be used for a lifetime!