A lot has happened recently in the discount travel netowrk marketing industry. They raise fundamental issues of trust – particularly with regard to affiliate marketing. I discuss some of my feelings about these developments.
Global Resorts Network (GRN) continues to thrive. Your Travel Business (YTB), not so much.
It's really a sad situation for those who invested and were unable to make a go of it. They lost more than money; they lost their dreams. GRN, however, helps people like you and me to achieve our dreams. It operates in the travel arena, but the company is not public. It is headed by experienced executives, and its web site gives access to their names and to the business address of the company. Perhaps what recommends it most highly is that it is the marketing arm of a company which has been successful in the travel business for over 20 years – way before the Internet.
YTB is being sued by the states of California and Illinois. Both states claim that it is an illegal pyramid scheme. Even before the suites were launched, YTB management was considering a move from a Multi-Level Marketing approach to a franchise model, which indicates that it must have had an inkling that these lawsuits were in the works.
I live in St. Louis and read the St. Louis Business Journal. YTB's corporate headquarters are located not far outside of St. Louis in Wood River, Illinois. The following article has generated many comments on the SLBJ website. The link is here.
Ana Temple wanted to make some extra cash to supplement her income as a finance and human resources director for an architectural firm.
So when a family friend told her about YourTravelBiz.com and how she could set up her own online travel agency, she jumped at the chance in April.
She paid nearly $500 to set up a Web site through Wood River, Ill.-based YTB International. The company told her she'd make 60 percent commission off every trip she booked.
But then she got her paycheck: $3 per airline ticket.
That's when the company told her travel agents make 60 percent of what YTB makes, she said.
"I feel so deceived," said Temple, a Copiague, N.Y., resident. "They told us people could retire off this and take free trips. It's all a bunch of bull."
On Monday, the California attorney general sued YTB, calling it a "gigantic pyramid scheme" that swindled an estimated $103 million out of as many as 200,000 people nationwide in 2007 alone. The majority of members make most of their money from recruiting new members, not from selling travel, so only a few see the promised profits, Attorney General Jerry Brown Jr. said.
More than 90 people over the past three years have complained about YourTravelBiz.com to the Better Business Bureau of eastern Missouri and southern Illinois.
YTB denies any wrongdoing.
Several YTB agents vigorously defended YTB at the company's national convention in St. Louis this week, saying they had made money and received discounts on personal travel.
"That's because they got thousands of suckers underneath them and they're making money off us," said Temple, 38.
When she tried to cancel, YTB refused, saying it was past the five-day cancellation period. But Temple said she didn't receive her packet informing her of the cancellation policy until after the five- day period expired.
YTB denied this and she was still required to read the online terms and conditions before paying.
"They gave us so much false information," she said. "Total, total lies."
kvolkmann@bizjournals.com
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