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

[agent8971]

Dear Mr. Peter:
You made mention of GTI as one of those "MLMs" as well as "mill cards"....
I couldn't agree more. They claim to have more than 35,000 agents "world-wide" but don't seem to have a valid "directory" of their "members"....
I recommend you also take up what's "behind" this group for the information and best interest of the Travel community..

Thank you, and best regards!

[Alex]

I just got invited to one of YTB recruitment meetings by a family member who's very religious. Thanks for your post, it has been very helpful.

[cruisinman]

ytb isn't a scam just a mlm capitalizing on an industry that allows businesses like ytb to operate.

It's not ytb or their reps fault that the travel suppliers will allow ANYONE to sell their products and receive discounts on their personal travel as a travel industry participant.

Although "real" travel agents cry over mlm travel agents calling themselves "travel agents" - but, by definition - it is exactly what they are.

Now -are they professional and educated - most likely not. But - with the internet - who needs knowledge to sell basic travel?

If you, and people like you don't like the "card mills" or the travel mlm's - take it to the supplier level and do something about it - or, please shut up . . .

Tom

[Tim Richmond]

The problem with the with YTB and others is not that they are selling travel, but that they promote that as the viable business option when actually the way you make any money in that business is by recruiting more to join. This is proven in their financial statements.

Suppliers are to blame also, but it the misleading information that these MLM's use to sign more up and the high failure rate of those that do sign up that bothers me.

Unfortunatley suppliers turn a blind eye as any sale helps their bottom line. They will always put their shareholders value above that of the travel agent.

Tim

[Norma P]

I just happened upon your site and what timeing. I am interested in the homebased-travelagents.com site. What do you think of that one? Is it a card mill type business?
Thanks

[Kimberly D]

I have recently been asked to join YTB but since the whole pyramid idea hasnt sold me I choose not to invest. But isnt it true Majic Johnson recently bought into it.

[Tim]

I've had great experiences as a referring travel agent with YTB. There are always a lot of doubts about MLMS in general but it truly is worth it.

EDITORS NOTE: As long as they are around and you like the referral commissions, go for it.

[Marlin]

This fear that people have about MLM's is silly. Everyone is their own walking MLM. All business work like an MLM. LETS GET REAL PEOPLE. When you meet your friend for coffee you meet at Starbucks because you recommended that you meet there because you like the coffee so your friend buys some starbucks coffee then you get a call on your cell phone and you friend says wow cool phone you say yeah it's a new Motorola so they say "I should get one too" then you ask your friend where they got their new hair cut. You like there new hair cut so you go to the same salon the next week. This is the same as saying hey I now use YTB to book my travel instead of XYZTravel. or I now buy vitamins at my own vitamin store instead of GNC. As far as some people being more successful then others, THIS LIFE it is what you put into it. Lets look at Real Estate it is fact that 90 percent of the agents only do 10 percent of the sales in the US. So naturally only 10 percent of the agents are considered high producers. Lets look as cost to be in business. Real Estate agents pay over $2,000 just to get licensed then to join the MLS cost can exceed $2,000 per year this does not even touch the marketing cost that can easily exceed $10,000 per month. Franchise companies start at 30k and exceed 1 million. Pay to play are you kidding! YTB cost $500.00 to play this cost is nothing a middle class couple can spend this much on a night out. A smoker will pay this much over 9 months. This is the cost for one coach seat from Atlanta to anywhere USA. You want results then work for it quit winning and work. You people have no idea how lucky where are here in the USA to have opportunities like YTB, Amway, Mary Kay etc. Thank God for Capitalism!

Note: what if after a year in a MLM you make $500.00 per month with out quitting your current job. Theoretically that $500.00 is all residual income right? Ok so put that money in a IRA and you will have well of 1.5 million in 30yrs. Can you say retirement!!

Marlin

[Tom Book]

Despite of so many similar businesses to YTB, why is YTB mainly being targeted upon by this author?

Simple. YTB is the fastest growing travel agent networks in the world. It has badly affected other traditional travel agencies as most of them closed shop. And Peter is simply just one of the affected competitors in the travel industry. Yes it's true that YTB founder is a former church minister. So what's the big deal? It just shows how desperate Peter is.

Challenge to Peter:-
If you think YTB is a scam, why don't you bring all of your evidences & file it in court? It's the best venue to stop your so-called "scam competitors'" business operations & rake all the profits in this travel business. It's the best thing to do rather than badmouthing the credibility of other legitimate companies in public.

[Alf T.]

Peter- If you cant beat them, join them. Maybe by then you can use your magnificent talent in the travel business as a leverage to train these "newbies" and convert them into profit centers for you. Obviously you're badmouthing YTB because instead of you booking my own flight and vacation, you got nothing else to do. You probobly have to still pay your employess for not doing anything cause everybody else is booking their own travel and using that as a write-off. You see, you just want "us" to pay you retail because you are the middle man and you are the self professed "guru" in travel. Hey wake up and smell the FAM TRIPS! If you think that YTB is a scam, why don't you sue the company and maybe if you win in court, then all 100K plus salesforce for YTB can shut up and join your travel agency and then they cay also offer your opportunity of only buying travel from you so nobody can be empowered to make a nice and decent living. They just have to spend their money on your travel agency and pay retail. Otherwise, just join YTB. Maybe more poeple will be happy to look up to you as a true professional. The one who is willing to shed everyone the "light" in the travel business world. Thanks and by the way, I can sponsor you in my YTB business just incase you change your mind.

[John]

Peter,
I wanted to add this again to make sure you saw it. My guess is you never have stepped foot in the home office of either World Ventures or YTB. If you are so interested in protecting the integrity of the industry doesn't it make sense that you at least know who these people are? I challenge you to do the right thing and fly to Dallas and St. Louis and meet with the management teams of both WorldVentures and YTB. If you are going to be judging these companies pretty harshly doesn't make sense that you do your homework first?

[Tom]

Dude, you have to be a fag. YTB rules. You;re just jealous F !! LOL

[LaToya B.]

First of all....if you are an experienced Travel Agent, YTB cuts you a break. (90 Day Blitz)
You do not have to pay that $450, only unexperienced agents pay that amount! Second of all YTB is not a pyramid scam, Pyramid scams are ILLEGAL. YTB offers a good or service for their referrals of other travel reps to purchase an online store front. You shouldn't be on here putting another company ON BLAST!!!! Those people that earned millions of dollars through YTB either worked hard to get there or they just know people with money that could afford to pay $450! So for all the people that was discouraged to join YTB because of this post by Mr. Peter...DON'T BELIEVE THE HYPE!!!! There Travel & Marketing Business is real and the owner also put the commission law into effect with the BILL OF RIGHTS that he made which cannot be changed or altered!!!!! SUGGESTION>>>> Before you BASH another company...PLEASE CHECK YOUR RESOURCES.. Becausue i am a member of YTB, I graduated from Travel School in 1998. YTB IS ALLLL GOOOOOD!!!!
PEOPLE DON'T LET ANYONE STOP YOU FROM YOUR DREAMS! IF YOU ARE TRYING TO BETTER YOURSELF ..Then check YTB out!!!

[Joe]

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%?

- 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.

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

[wellbutrin]

[url=http://www.xanga.com/bupropion]Wellbutrin[/url] Where can them beautiful scene the other deal in pharmacy nothing tabs
Over pills medications [url=http://www.xanga.com/bupropion]Wellbutrin[/url] bought there at that pharmacies last weekend [url=http://www.xanga.com/bupropion]Wellbutrin[/url]

[http://mp33mp.micklemuckle.0lx.net]

http://mp33mp.micklemuckle.0lx.net

[Seattle]

lets see here, what I see is a battle for survival. I can't think of the last time I seen a travel agency around town and I live in seattle...

Most are homebased now, you will not find the days of the past and the MLM have moved in so what.

I for one own my own corporation and run it from my home and work part time. I also am considering joining Ytb to offer something different to my clients and yes I want the cheap travel truth be know.

I also have my 6 to join and more then glad to support them. GL who cares God Bless all, Get your money and stop being negative because your opponent is stronger then you.

[Mike Akana]

Thanks, Peter, for your consolidation of information on MLM and card mills, but especially leadership in defining best business practices for host agencies. There are a number of legitimate paths for a home agent (and many brick and motar as well) to consolidate resources. The MLM/Card mill approach is not one of 'em. Thanks. Mike

[Internetgrateful]

Peter, if I have an emergency to visit my family the next day, I would not call you at 2am and book, I would rather go online.. to avoid any mistakes from your part..

I am so grateful for the Internet and Online booking..an alternative to traditional travel agents.. and it is going to skyrocket.. Let's face it..the world is changing..

[Gwenyth]

I attended the Home Based Expo wearing my Cruise Planners pin & had YTB agents approach me trying to sell me a franchise. It really gave me a bad taste to have these pushy people work the crowd promoting the YTB pyrmid scheme. Go Away!!

[Earl Allen Boek]

NOW 135,000 STRONG...YTB

The New Face Of Travel.

RobertsResorts.Net

[Jay Daniles]

Forget about this back and forth bickering look at Peters wife...She is one sexy hottie. This goes to show that ANYONE with a decent amonut of money can land a decent honey like Peters wife. I think I saw him on "To catch a predator"

[David Hall]

The information that you have posted here is not only false but libelous.

I have personally been an active RTA with YTB for 3 months and have already made a substantial amount of money from travel booked through my YTB site. The amount of money that I have made through my travel bookings has far outweighed the amount that I have made through signing up new RTA's.

The travel rates offered through YTB are comparable to other online travel sites and I have enjoyed a healthy boost to my monthly income simply by promoting online travel booking through my YTB website. Not to mention that having a legitimate online travel business allows me substantial tax advantages.

The company does offer substantial bonuses for getting other people to sign up for their own travel sites, however the core product is a very viable business opportunity.

Please get your facts straight. You are doing a great disservice to all 140,000+ active RTA's that are trying to better their lives and the lives of others with the YTB opportunity.

In the third paragraph of the article posted on your site you note the pay-to-play aspect; stating "we always find it suspicious when one has to pay their employer for their job." This is a gross misunderstanding of what this business is. RTA's are not employees. There is a huge legal difference. As an RTA you are in business for yourself.

Expedia was purchased in 2003 for Billions of dollars. The travel booking website that YTB offers is only $449 as a one time set up fee and the rates and travel booking engine are comparable in both quality, pricing and options. As far as the monthly fee. Can you tell me of another business where you can get web hosting, accounting, marketing, and maintain vendor relationships for just $49 a month?

The truth is that this is a very legitimate business opportunity. The only thing that people need to be warned about is that if they think that they are going to sign up and get rich without working, they are wrong. To make money by selling travel you need to spend time and effort promoting your site. And, if someone thinks that they will just work the multi-level marketing side, they may find that it also takes more work than most people expect.

However, YTB does not belong in the category of internet scams. Please re-write the article appropriately or discontinue the article altogether.

Sincerely,

David Hall
TravelingSecret.com

[unoglelurce]

Make love, not war!