NFIB

Lessons Learned in a Changing Industry
09/ 05/ 2002

by Patrick Teutschel

It's no secret that travel agents have had a tough time of late. Challenges over the last year have included slashed commissions, terrorist attacks and growing online competition. Yet we've found success by tapping the advantages that come from being a small travel agency.

I started California Travel 26 years ago, before computers and the Internet. Often we have had to reevaluate the way we do business--instituting reactive and proactive changes that have allowed our company to prosper with the times.

Many people blame 9/11 for the declining fortunes of travel agents and the airlines. But the challenges started before last September, and not all travel agencies are suffering.

We realized the need to change our approach five years ago, when airlines started nicking away at the commissions they paid us. What started as a 10 percent commission dropped to 5 percent, and this year most airlines have eliminated commissions altogether.

Add to the challenge the proliferation of online travel booking sites. Like many other travel agents, we've changed our business strategy and now emphasize our role as consultants and salespeople, rather than simply order-takers.

While in some cases a Web site can get you a cheaper fare from city A to city B, it can't help you find the best cruise to fit your personality or give you a first-hand view of what Florence is like in June. Unlike the airlines, we are in business to serve the customers. That's our strength and that's what we've increasingly emphasized. Fortunately, that is also what customers are increasingly demanding.

To compensate for the loss of commissions, we--like many other agents--began charging a fee for booking tickets. It's proved a liberating move, as it emphasizes the worth of our expertise and experience. For a simple air ticket, we will suggest to clients the option of dealing with an airline's Web site. But for more involved travel, most agencies have access to bulk or consolidator rates that the airlines don't advertise. Paying the agency's fee can save the business and leisure traveler hundreds of dollars. Add that to your bottom line.

Most of our business is leisure travel, which has fallen off in the last year due to security concerns and the recession. But we have had more success in booking cruises, escorted tours and non-escorted packages. We have had fewer transactions, but those we have are better--and that's where it counts, on my bottom line.

The last few years have shown us the importance of remaining flexible and willing to try new things. We access the Internet daily, learning, researching and comparing. We recently stopped running an expensive ad in the Yellow Pages, instead spending our ad dollars on direct mail. It was a scary step to take, but direct mail has proven a more effective way to get out the word on our expertise, experience and services--and to keep in touch with our customers.

Viewing challenges as opportunities is a way any small business owner can ensure their survival in the face of changing economies and industries.

Teutschel owns California Travel, which is located in Campbell, Calif.

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This article originally appeared in the August/September 2002 issue of MyBusiness magazine.

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