Friday, November 23, 2007

YTB a Game Changer

Happy Thanksgiving

If you eliminate the MLM part, which I abhor , the concept of eliminating the middleman by becoming the middleman is quite inventive and must by definition bring down the cost of travel for those that dicide to buy the travel from themselves instead of that middleman.

If cleverly, and by that I do not mean sly or dishonest, executed and focused on the customer, I believe this is a wonderful opportunity to have fun and make some money at the same time.

I believe this model is a game-changer in the long run, just like the original Travelocities of this world. And will bring prices down if only initially by getting cash back. It does run the risk that everyone reduces prices and then the game is up and then the only differentiator that remains will be personal superior customer service.

What the internet has typically done in most instances has been to eliminate middlemen who did not bring any value to the value chain of a product and consequently did not deserve to be paid anything.Travelocity, Expadia and all these search engines have an advantage (value added) over the carriers and hotels in that they scour a huge database of hundreds of airlines and thousands of hotels over a particular route/destination and create the impression that the customer was offered best deal to be found.In reality the Airlines' and Hotels' own portals often offer cheaper fares and rates than the search engines. But using the General Travel Portals saves the traveler the time it would have taken him/her to go from Carrier to Carier and Hotel to Hotel and thus add value.

I know Travelocity and et al now also offer excellent 800 service to their VIP customers and thus add value there, but then so does everyone else nowadays even FRED!

So THE benefit YTB offers over the competition is the OWNERSHIP of the travel portal for an Individual, Small Corporation, Sole Proprietor, Organization, Church, Wanna Be Travel agent, Like myself.Provided they do the math and reach a break-even point of over $6K in travel spend and it is a healthy blend of travel (not just airline tickets), the value proposition makes economic sense and is a good one that is offered by no one else.

Above is a link that I am sure you are already aware of that shows that the trend to online booking is unstoppable.

YTB if operated responsibly would add another twist to this online trend.It is a little like Netflix versus Blockbuster. Blockbuster never really recovered..

YTB Breaking the MOlD cont'd?

Remember NetFlix? Read on.

As I said yesterday, Breaking the MOLD is not easy!

TRAVEL WEEKLY (11/20/2007)Club 33:

The most influential people in the travel industry "Travel Weekly's list of the 33 most influential people in travel is notpopulated by folks with fancy titles who pull the right strings and make the industry behave as it should.
It's not about that sort of influence. It's filled with people who, often working in isolation, had ideas thatveered from the status quo and succeeded so spectacularly that theindustry jumped out of its rut and followed. They're the ones who, when they set their own agendas, set ours as well.

We didn't give people much credit for their great deeds of yesteryear.If they're on this list today, it's because they've influenced thecourse travel is taking in 2007, and we think they'll be just as influential in 2008.

Kim Sorensen, CEO, YTB Travel Network

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

It Is Not Easy to break the Mold!

YTB Braking the MOLD?

I agree with many of the of the editorial comments that are posted on

Most peole join YTB for the perks and the MLM opportunity (although that is a lot harder than many of them realize) and invariably have no idea or intention of selling travel.

But why this clearly defensive posture by the Travel Establishment? Are they afraid of something? They all survived the onslaught of the big dog travel portals like Travelocity, Expedia etc. This is just a new twist to it, a different marketing ploy.

Is YTB growing faster than they would like? Has it put even more pressure on the margins? Isn't that what all new business models tend to do?

Are they defensive because YTB, by giving perks, attempts to put some fun and glamour back into the drab travel experience of the ordinary traveler? The drab experience caused by years of poor management by organizations like IATA And ALL? I have not used a travel agent since 1996, for most of my travel I used Travelocity or the vendors websites.

Even when I used a travel agency I had to advise the agent about routing to get better deals. So how much more did they know about the business than the everage YTB'er?I think the only people who still use Travel Agents like AMEX or Wagon Lits are the hughe blue chip corporations who have a hard time changing.

The money and fun in this business is in the all in and group travel opportunities headed by the Cruise Lines and Las Vegas.Who wants to sell Airline tickets or car rentals?

I hate MLM but I love the Travel Business. I focus on getting my customers the best travel deals. I use my knowledge to scour the industry, so they do not have to, and find them value for money that they would never be able to find on their own. I do have a Toll Free phone number and a street address on my website. I do encourage my customers to call me if they are uncomfortable with the web or do not have the time. That is better service than they can get from Travelocity or Expedia.

To focus on the MLM part and its shortcomoings would be the wrong way of looking at YTB. YTB should be looked at as a high growth business model, with all its imperfections, warts and all. The quickest way to grow a travel, any, business in a start up mode is to do it exactly the way YTB is doing it right now. The growth rates bear that out. The MLM model and the perks are there to stimulate a growth rate that would not be attainable in any other way.

That is probaly not the way it will evolve in the long run and the market forces will make adjustments to the model in a more mature state. The focus will probably shift from selling portals to selling travel.

The model definitely makes sense for individual travelers that spend over $6K in travel per year. As well as for small companies such as sole proprietors like CPA, consulting and engineering professionals. Also Churches and Organizations will benefit from this model.
All this is to come.

As for the short run,

Who cares if some members carry credentials that they do not really deserve! The Companies who honor those credentials ar at fault. One does not give people privileges because of their pretty eyes do they? Can the vendors not tell if the person is a travel agent with impressive turnover? Are the systems of the traditional travel world so antiquated that they do not capture this kind of information? Shame on them!

Although it seems unlikely that the holder of an Iatan card is not at least a very frequent traveller, given the rules of obtaining one at YTB.I am sure that all these things will sort themselves out. All the upheavel in the recent weeks will not go unnoticed and no doubt YTB will have to make corrections in midstream.

Drivel about share movements clearly shows ignorance of the behaviour of the stockmarkets and has nothing fundamentally to do with a companies performance.

In any case I am confident that YTB management will stay away from any knee jerk reactions and set the ship back on its course.

I am certain that the vigour with which the establishments are attacking YTB is a sign that YTB is a force to be reckoned with in its quest to make travel even more affordable to the individual traveler and simultaneously make the all too drab experience of travel a littlemore glamorous and fun. Because that is what this is ultimately all about.