1) The Frontal21 report says that the guides working with our company are exploited tour guides - forced to hand over their tips

Transcription

1 OUR RESPONSE: 1) The Frontal21 report says that the guides working with our company are exploited tour guides - forced to hand over their tips This is not true. The truth is that tour guides work on a true freelance basis, and sell their services directly on to travelers, either on a tips-only basis on the free tours or on a pre-paid basis on the tours where customers purchase their tickets for a set price before the tour begins. Guides pay a marketing fee for the promotional maps and flyers printed and distributed by SANDEMANs NEW Europe GmbH, and keep 100% of their tips with one exception: they are encouraged not to accept tips for the Sachsenhausen Concentration Camp Memorial tour, and it is suggested that they ask travelers to donate any gratuities directly to the Memorial itself. Freelancer guides who request to work with SANDEMANs NEW Europe are provided an overview of what advertising costs are associated with the promotion of their tours, and every freelance guide is given the chance to do three tours under the SANDEMANs NEW Europe marketing brand without having to pay any associated marketing fees. This allows every guide to evaluate the profitability of the relationship before committing to any marketing payments to SANDEMANs NEW Europe GmbH, and therefore we find it unfair to suggest that they are in any way exploited or forced to do anything that doesn t make sense for them. 2) The Frontal21 report says that the guides work on a tips-only basis, and that customers are deceived because they are not informed about the behind-the-scene marketing costs to the guides. This is not true. The truth is that every freelance guide offers both the free tour, based on a tips-only basis, as well as the paid tours for which the guides sell tickets directly to the travelers from their free tours as well as those promoted directly on to our paid tours from our maps, flyers, and online marketing efforts. The travelers are not informed about the cost associated with promoting them to attend a tour as it would create an unfair pressure on them to engender a tip, and as a judge sitting in the Landesgericht Berlin ( , Aktenzeichen: 52 O 425/07) made clear in a 2007 ruling in SANDEMANs NEW Europe s favor regarding the legitimacy of the free tour marketing concept, freelance guides should not inform customers about their marketing costs if they wished to call the tour free as the customers need to retain the right to decide on their own if they wish to tip or not. The judgment also ruled that calling the free tour free was accurate, as we clearly announce in our marketing that the guides work on a tips-only basis during their free tours as the customers are not required to tip if they chose not to do so. 3) The Frontal21 report claims that Michael D., a guide who had worked with SANDEMANs NEW Europe, had to pay SANDEMANs NEW Europe a fee of 3 a person no matter what he earned in tips from the free tour, and that as an example he only earns 18 from a three-hour tour. This is misleading. The agreements signed off between SANDEMANs NEW Europe and individual freelance guides vary, and that freelance guides are billed between 1-3 per person on the free tour, with the average being approx 2.20 per person. The average amount tipped

2 on the free tour sits at 5 per person, which is about half what direct market competitors charge for a similar walking tour. Tours average 25 people, totaling 70 take home on average for a freelance guide and a marketing fee of 55 for SANDEMANs NEW Europe. Michael D., like all freelance tour guides requesting to purchase our promotional services, booked three tour slots based upon times he submitted as being times when he was available to do a tour. Michael D. was then asked if he felt like he was earning enough money from the tips-based tours, and if he would like to continue purchasing tour promotional and operational services from SANDEMANs NEW Europe, and he requested to continue in the relationship. For over 6 months, Michael D. had the power to discontinue the relationship with SANDEMANs NEW Europe with no notice, or to swap or give back any tour slot he had requested, and yet he chose to use the marketing services of SANDEMANs NEW Europe from which he undoubtedly profited. 4) The Frontal21 report claims that before the tour the guides have to recite: My colleagues and I work only for tips. They are not allowed to mention money paid to SANDEMANs NEW Europe otherwise the working relationship is over. The tourists therefore suspect nothing and give the tip thinking that it s for the guide. This is misleading. The guides are only required (by law) not to draw attention to their cost structure associated with promoting the free tour, nor to suggest an appropriate amount to be tipped by their clients at the end of the tour. Basically, as per the judgment of the Landgericht Berlin from 27 September 2007 (Aktenzeichen: 52 O 425/07) mentioned above, freelance guides should not create any undue pressure to force people to tip, or else naming the free tour as free would be unfair marketing. SANDEMANs NEW Europe suggests that freelance guides mention that they work for tips, to reinforce the marketing language presented in both online and offline marketing, as well as to clarify that the free tour is not financed through any governmental, religious, or political associations. The entire tip received by guides on free tours belongs to the guide. From this legal income, the freelance guides also fund their marketing costs. Travelers need not be aware of the financial costs freelance guides incur whilst preparing for and promoting their tours and it would be strange for any business to outline the cost structure behind a product or service to their customers. 5) During the Frontal21 report, a tourist is asked about what she thinks about the fact that a large proportion of her tip goes to the company, and she said to Frontal 21: That s not right, I don t find it fair. And it is misleading advertising. Before recording any comments, Frontal21 approached travelers on the Lustgarten in Berlin having just completed a free tour, and misled them about the relationship which exists between SANDEMANs NEW Europe and the freelance guides working with the company, which was witnessed by multiple people. Many travelers simply walked away from the camera crew. Some of the travelers were prepared with off-camera sound bites before being filmed. After being captured on camera, travelers were approached on a one-on-one basis by guides and informed as to the real situation which exists. 6) The Frontal21 report claims that SANDEMANs NEW Europe does not pay their guides a wage, holiday, health insurance or social insurance.

3 This is extremely misleading. SANDEMANs NEW Europe employs over 50 full-time staff members, who all receive a wage, holiday, health insurance, and social insurance. As is standard with tour operators and city tour companies across Germany and Europe, SANDEMANs NEW Europe maintains a freelance relationship with some tour guides. The European Tour Operators Association, ETOA, affirms: "European tourism depends on excellent customer service. Guides are vital in this respect. The majority are self-employed. Operators contract with local guides giving specialized tours, and tour guides who lead groups over a period of days. The work is usually agreed between parties on a tour-by-tour basis, and parties are free to work with whom they wish. Such guides exercise wide autonomy in providing services to tourists. Given the seasonal nature of tourism in various locations, and the development of both origin markets and destinations worldwide, self-employed individuals are best-placed to respond effectively to market opportunities worldwide. We support innovation and competition in the tourism industry. Sandeman's New Europe has been instrumental in promoting walking tours to a category of visitors who previously have been unlikely to take a guided tour, and has widened the range of services available to visitors in the destinations in which it operates. This is to be welcomed. ETOA supports the freedom of individuals to deliver cultural commentary in public, and the freedom of organizations to develop imaginative products and work with guides best suited to provide an excellent level of customer service. Any restrictive practices that threaten these freedoms will damage Europe's appeal as a leading destination." SANDEMANs NEW Europe s policy towards considering tour guides to be freelancers with whom it works is consistent with the norm. For Frontal21 to suggest that SANDEMANs NEW Europe is operating inconsistently with the standard business practices currently existing in Europe by maintaining a freelance relationship with tour guides is simply not accurate. Being a freelancer guides need to invest time and to acquire customers from whom they can earn their living. SANDEMANs NEW Europe provides freelance guides their customer base, and the freelancers pay SANDEMANs NEW Europe for their services. If the guide s total costs are near to the total earnings, they need to make an adjustment. This model exists online to a much greater degree, as can be seen at one of the world s most popular web sites: GOOGLE. GOOGLE sells advertising to hundreds of thousands of clients looking to promote their web-pages, on a PPC or pay-per-click advertising deal, meaning that a client pays each time someone clicks on their web-page link. GOOGLE then connects millions of potential customers together with their advertising clients, who click occasionally on the Google Sponsored Links section. For each time someone clicks on one of those links, the client pays a fee to GOOGLE, regardless if the customer makes a purchase from the advertiser s website or not. If the GOOGLE pay-per-click fees outweigh the sales revenue from the advertiser s website, the advertiser will run at a loss.

4 GOOGLE has invested a great deal; to build technology, relationships, branding, acquire clients. And GOOGLE can help source customers. SANDEMANs NEW Europe applies a similar model off-line to put tour guides together with travelers. The cost of working with providers like GOOGLE or SANDEMANs NEW Europe to have a venue for acquiring customers could result in profits or losses, but that costs might outweigh gains is a fact of which any small business owner is aware. 7) The Frontal21 report claims that Michael D. gets an SMS once a week with how much he must pay into the company. 303 EUR this time into Sandeman s bank account even if he didn t receive this much in tips, he still has to pay. To suggest that communicating via SMS is suspect, or that Michael D. was at any time unaware of his debts to SANDEMANs NEW Europe, is misleading. The reality is that, in addition to providing guides a regular bill for SANDEMANs NEW Europe s services, guides receive a confirmation of the number of guests on the tour immediately after it begins, giving the guide a chance to refute the number of commissionable guests. SANDEMANs NEW Europe sends guides a weekly helpful reminder as to what open payments they have to the company, although in reality all guides know exactly what they owe to the company at all times because of the daily tour numbers being presented to them each tour. Using SMS as a service is fast and reliable, and nearly everyone has a mobile phone. The guides generally receive their actual bills at semi-regular informational meetings. The entire billing and payment process is highly organized and most payments are made via bank transfer or through a bank deposit payment, so that a record of transactions is kept for full transparency. The issue reasserted by Frontal21 that the freelancer could operate at a loss, has already been addressed above. Michael D. was a freelance guide who was completely aware of the cost structure associated with the tours, and made an informed decision to continue with SANDEMANs for over 24 weeks. 8) The Frontal21 reporters surreptitiously question a SANDEMANs NEW Europe employee with a hidden camera. When asked What is the tour guide left with as an income if less than 30 EUR is tipped by a group of 10? the staff member answers The money still has to be given in. The most upsetting aspect of this report is that after having spent so much time falsely accusing SANDEMANs NEW Europe of somehow misleading individuals into participating with the free tours, Frontal21 sent someone under false pretenses into an interview, and recorded evidence that from a guide s first meeting with our company it is made entirely clear what risks exist. We do this to help make sure all potential guides make an informed decision before preparing to collaborate with us. Also mentioned during this interview, but not shown in the Frontal21 video, is that we also provide the first three tours to the guides at no cost so that before they could ever run at a loss, they have the opportunity to evaluate their options based upon real data on their earning potential.

5 9) The Frontal21 report claims that Chris Sandeman, the owner and CEO of SANDEMANs NEW Europe refused to comment. Frontal21 scheduled an interview with Chris Sandeman for the following week at around 4pm on Thursday, the 25 th of February. Shortly thereafter, a interviewer and a film crew rushed onto SANDEMANs NEW Europe office grounds shouting violently why don t you pay your staff?. Having no idea who the men chasing him with a camera were, Mr. Sandeman politely excused himself and walked away. Frontal21 never followed up on the interview the following week, as apparently Frontal21 had no real interest in an actual interview. 10) Chris Sandeman is the heir to the Sandeman Port and Sherry Company. This is not true. The truth, a matter of public record, is that Sandeman Port and Sherry became the property of Seagrams International in 1980, and then changed hands to the Portuguese ownership of the Sogrape Group in The attempt to portray Chris Sandeman as a robber baron is unfounded and inaccurate. 11) The Frontal 21 report claims that Michael D. had had enough, and now works for a competitor, where they pay him for his work. The Frontal21 suggestion that Michael D. was in some way mistreated is inaccurate. The truth is that Michael D. was informed about the freelance relationship and the costs associated with the tours at his first meeting with SANDEMANs NEW Europe staff. He decided to see how the first few tours turned out. After this result, he continued to cooperate with SANDEMANs NEW Europe for 24 weeks additional weeks. At no stage Michael D. was deceived or misled, and SANDEMANS NEW Europe feels that providing Michael not just one, but three tours to establish a baseline for our cooperation, was more than fair. Conclusion: We cannot stress enough how difficult this report has been for SANDEMANs NEW Europe. We pride ourselves on our professional, respected, and legal tour services, and the claims made by Frontal21 attempt to wipe away the years of service our company has provided to travelers, freelance guides, and our partners. Hopefully, our systematic refutation of these claims helps show them for what they are: a story. Like a socialist comic book, Frontal21 paints a picture of a villainous capitalist company which attempts to exploit the innocent. And all the while, Frontal21 plays the hero by championing the underdog. Sadly, this is nothing more than the story of a freelance guide who discontinued his relationship with SANDEMANs NEW Europe on bad terms after 6 months, and a truly poor piece of investigative journalism. Our unique application of this model of connecting customers and providers was ignored in favor of Frontal21 s one-dimensional presentation that tour guides are not freelancers but are

6 actually employees, despite the industry standard in Berlin, in Germany, and in Europe being the opposite. Despite this SANDEMANs NEW Europe has always been aware of the delicate nature of the question of freelance guides. This is part of the reason why our business model calls for guides to have multiple sources of income, which we see through a multitude of individual customers paying directly to the guide. We feel that our model is much more consistent with the true nature of the freelancer relationship than even the industry standard, making us an industry leader and more than likely paving the path for more changes in the industry to come. The fact that Berlin has more than 4 free tour companies and that more than 100 free tours have popped up worldwide, is a testament to where the industry is headed. Thank you for taking the time to review our comments. We take your partnership seriously, and wanted to make sure that we provided you with the truth about what is going on, as well as to make ourselves available to you for any questions, comments, concerns, or suggestions. We are aware that some of partners have received inflammatory s from our competitors attempting to discredit us. We urge you to ignore them. Thank you for your support, Chris Sandeman, CEO