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Travel Weekly Numbers Fact or Fiction...

You can't tell me that YTB hasn't been at the center of attention for most everyone in the Travel Industry for the past few months. When news broke back in early October about Royal Caribbean, one of the first companies both suspect and named was YTB. Since then there have been countless news stories, message postings, e-mails, and phone calls concerning the one company in the spotlight; YTB. I woke this morning to find Company President of YTB Travel Network, Kim Sorensen named by Travel Weekly as one of the most influential people in the Travel Industry. (Page 2) There is little doubt that YTB is making one heck of an impact in the industry.

"Sorensen went, in a matter of weeks, from a virtual unknown in the industry to its favorite target for vitriol (from traditional agents and some suppliers) or admiration (from his tens of thousands of referring agents and, behind closed doors, some suppliers.) He has demonstrated some grace under fire, admitting his organization is still maturing, and we suspect that he and YTB will be around for many years, forcing all parties to examine what constitutes a legitimate seller of travel and challenging suppliers to assess how, and with whom the wish to do business."

During the year, Travel Weekly has been most gracious in allowing YTB to voice just who we are and what we do. Yet there are those who simply will not recognize just how we as a company have changed this industry this year. Rumors still swirl concerning our #35 Ranking this summer and the $226 Million we booked in Travel. Even when given the chance to defend the numbers reported, some choose to simply ignore the fact that our booking numbers came from our suppliers, not YTB, and these numbers represent travel sales, not marketing sales.

In the Travel Weekly report dated October 24th there are a number of statements that are either ignored or simply misrepresented when it comes to how much Travel YTB actually booked in 2006. I hate treating people like a bunch of grade school children, but it's become increasingly evident that some either don't know how to read, or don't have a basic understanding of the English language. How some of this information eludes them is unknown at this time, but we will attempt once again to educate those that want to discredit our company and our numbers.

The ranking was based on YTB's response to the Power List survey, where the company reported about $226 million a year in "verified sales". There's that word again, "verified" which actually means confirmed as to accuracy or truth by acceptable evidence. There is a lot of contention and controversy right now if these numbers were actually "verified" by Travel Weekly. If these numbers were not verified, I don't know why this publication would quote Mr. Sorensen as stating they are "verified sales".

Sorenson said that figure reflected the total value of bookings that resulted from referrals by its agents, not YTB's actual net revenue. The "spin" is that this statement does not reflect actual travel "bookings" but rather recruiting sales. I honestly don't know how someone can misunderstand this, but somehow the word "bookings" magically turns into "recruiting" and "Agents" somehow magically turn into "Reps" who are selling web sites not travel.

Sorensen said that the $226 million sales figure it offered to Travel Weekly describes the volume of revenue it generates for cruise, vacation and other travel suppliers, rather than YTB's own net revenue. This paragraph is deleted in all posts found on forums and message boards. It simply isn't discussed or pointed out for those who wish to discredit our ranking or our "verified sales". It just magically goes away or is ignored.

"What we reported for the Power List was gleaned from numbers that we got from suppliers: how many passengers were booked through us, or the figure for dollar sales at the end of the year. We didn't reconcile that with reports from our representatives. We just pulled in information on our sales from many reports and many sources for that". And because we did this, not only is YTB misleading everyone, but now our suppliers are also misleading everyone. Nobody can be trusted when it comes to Network Marketing I guess. The number given to Travel Weekly came directly from Carnival, Royal Caribbean, Apple Vacations, World Choice, and the rest of our "shady" suppliers. Gleaned means "to collect bit by bit" and you would think that collecting numbers directly from suppliers would add even more credibility, but apparently that's not the case when it reports Network Marketing numbers.

Helping our Travel Professionals understand that these are in fact travel sales, and not recruiting sales is even more difficult when they try to fit a square peg into a round hole. There seems to be this notion that the travel booked in 2006 ($226 Million in sales) has to be reflected somehow in our SEC filings for the same year. ($7.4 Million in commissions.) The two simply don't match up and somehow our Professionals use this insight to try to discredit our ranking.

Based on this information and if we match the $226 Million in "Travel Sales" with $7.4 Million in commissions, that would reflect that YTB earned on average 3.2% in commissions across the board. Yet it was noted back in January that 30 to 35% of our bookings are cruises. Based on 30% of the $226 Million Travel Weekly "verified" this one category alone would produce $10.8 million in sales. This does not include air, hotel, tours, cars, tickets, or all-inclusive packages.

Confused?

Here is what our Travel Professionals are missing. Travel commissions are not paid until the travel has been consumed. I've used this example before, and I guess our Professional STILL don't understand how this works so let me cut and paste from a previous post.

I booked an 11 day riverboat cruise for clients from Cologne to Nuremberg directly with UniWorld in November of 2006. While only a deposit was made at the time of booking, a gross sales number was generated and this cruise booking is part of the "verified" travel sales that went on the Travel Weekly report. While a commission percentage and number was known at that time, the actual commission numbers did not show up for YTB (or me) until the cruise was paid on September 3rd. (Typically made 60-90 days before sailing)

On December 1st, my clients with several other couples will be flying to Cologne to enjoy this holiday cruise and when they return, UniWorld will then issue a check to YTB in commission and I in turn receive my 60% cut from YTB. While it's possible that this commission will be paid in December of 2007, it's more likely UniWorld will pay YTB 30 days after, January of 2008.

While "verifiable travel sales" show up in 2006, the SEC filings will not see earnings until Q1 of 2008.

Square peg...round hole.

I honestly don't have a clue as to what it's going to take to help them understand. I've been trying to help Anti-MLM Zealots understand for years how and why our model works. Maybe our SAP NetWeaver® technology platform coming in March will help in this issue. Don't count of it however, like most everything else that adds credibility to our company or industry, there will always be those few feel it's simply better to ignore than accept.

I'm heading over the river and through the woods with my kids to Grandmothers house we go for an extended weekend in the morning. Peace be with all of you and may you find something to be truly thankful for this Thanksgiving Holiday!


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Doug & Ronda Bauknight
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