YTB Travel Network was acquired late last month by Sixth Scott, which will operate the multilevel marketer under the name First Travel Alliance. Editor at Large Johanna Jainchill spoke with YTB President Kim Sorensen to find out what the deal means for the company, ranked 34th in Travel Weekly's 2011 Power List.
Q: What changes did the YTB Travel Network make to be less controversial?
A: We've done a lot better job at training our field reps, and we've put some policies in place that require a certain amount of training before they are allowed to do certain things. That's softened a lot of the rough edges. We had a lot of new people that were coming and contacting vendors prematurely that didn't know enough about the business to actually be effective. A lot of that created controversy within the vendor community, etc., and we've just corrected a lot of those issues. And that's evidenced by the fact that we haven't been in the news for two to three years.
Q: With these changes, are you hoping to be reinstated by the RCCL brands?
A: I certainly can't speak for them. That will be a Sixth Scott issue; we won't be a travel company and won't have vendor contracts with anybody.
Q: With Sixth Scott's acquisition of YTB Travel Network, what will YTB International do?
A: YTB will continue to be a network marketing company and won't be a travel company. There is a little hybrid in there. One of our many products that we sell will be our travel agent program. ... We are going to continue to find outside referring agents: entry-level people. I've felt for a long time that there is a real void in the travel industry of new people that are entering the industry. We are pretty good at bringing new people in. We are handing over the independent contractor agreement to [First Travel Alliance, which] has us, an outside company referring travel agents that places business with them.
Q: What will YTB's main business be?
A: We also sell gourmet coffee, business texting services, green energy products, other power agreements. We are vastly diversified now. We were very focused on travel back in the day. Over the last two to three years we have pulled back and restructured our company to be more of a traditional networking product-based company. One of our many products is still our travel agent program. The only difference is Sixth Scott will be the travel company and YTB will not.
Q: What happened to YTB Travel over the last few years?
A: Our goal was not to become smaller, but the reality is in this economy, and with the lawsuit we dealt with and all that stuff, it is a reality. We've taken this opportunity to restructure. We see our company as repositioned, and it's going to allow us to focus on what we do well. Our core competency is simply in recruiting new people, training those new people to a level of production and getting them in operations. We feel we are positioned now to focus more on what we do well as a network marketing company and are positioned for another growth phase.
Throughout this period, travel sales are down from their peak, but we've been able to maintain a good core, and we're still a very substantial agency. Much of that is our group business. We've always focused on that area of our business. That's what we see ourselves as being: a group waiting to happen. We put infrastructure together that really helps our outside folks with their group business.
Q: How much have sales gone down over the last few years?
A: We are half of what we were at our peak. Our best year was $425 million in 2007.
For news and updates on agent and distribution issues, follow Johanna Jainchill on Twitter @jjainchilltw.