Goodbye ByeByeNow?

Is ByeByeNow about to go bye-bye?

It depends who you listen to. Insiders and former employees describe a company in disarray, with an out-of-control cash burn rate, low staff morale, and bookings that are “way below” expectations.

The numbers – or lack of numbers – suggest the critics may be correct. The Pompano Beach, Fla., vacation travel retailer has laid off nearly half its employees since this summer. The most recent cutbacks came this month when ByeByeNow reportedly bid adieu to 60 workers. Company executives refuse to reveal the number of bookings, revenues, and operating costs, citing “competitive” reasons. In light of the reductions, however, their silence sends a less-than-reassuring message about the company’s future.

But talk to Guy Pepper, ByeByeNow’s charismatic chief executive, and you’ll get another impression. The former NBC executive will tell you about his company’s plans to accept cruise bookings on its Web site next month (given the various and sundry vacation packages presented on its Web site, it’s surprising that consumers still can’t book anything online). He’ll tell you that the staff reductions were largely planned and that most of the dismissals were consultants whose contracts were up. He may also mention the 300 agency locations that are now part of ByeByeNow’s network, and projections that there will be 450 franchisees by the end of the year.

Pepper will certainly tell you that his company will be profitable by next March, because that’s what he’s been promising prospective investors for his third round of funding (he won’t disclose how much he’s raised so far or how much he hopes to raise). Most important, he’ll insist that ByeByeNow’s business model works. Here’s how he’s fine-tuned his game plan since my colleague Krista Pappas last wrote about ByeByeNow in January:

Clicks-and-bricks is where it’s at. Earlier this year, before ByeByeNow’s strategy came into clearer focus, the company looked like another travel dotcom. Pepper says he’s gone to great lengths to dispel that misconception. “Our Web site is there strictly to protect travel agents from losing business to the Web,” he says. “We’re very focused on people understanding the synergy between the Web and the travel store.” To that end, the company has spent “less than $20 million” to recruit “Who Wants to Be a Millionare” personality Regis Philbin and to supply franchisees with media kits that include advertisements for radio, television and direct mail bearing the TV hosts’ likeness, according to Pepper.

Don’t forget the technology. Even ByeByeNow’s most ardent critics like what’s under the hood. With 14 patents pending on its technology, which puts a multimedia travel inventory database at an agent’s fingertips, it’s hard to dispute that. Also noteworthy is the way in which the company has introduced the applications to its agents – not as something revolutionary that changes the way they work from one day to the next, but as something complementary. “We don’t want them to change our agents’ entire world, but to bring in a tool that can help them,” says Pepper. “Our technology is part of a total solution that is a value-add to them.”

Focus on profitability and partnerships. Although Pepper won’t disclose any numbers to back up his claim that ByeByeNow is a few months away from being in the black, he will say that his overriding directive is to make money. Cutting nearly half his workforce should help (although insiders have charged that high executive salaries continue to cost the company dearly). But strong partnerships with the likes of Worldspan – which is also an investor in ByeByeNow – are also propelling the company toward profitability, says Pepper. “Worldspan is incredibly supportive,” he adds.

Is Pepper right or will his critics prevail? The next four months will be a critical time for the company when we’ll find out if ByeByeNow has merely hit a speed bump on the information highway or is in its brave last days.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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