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Selling Group TravelApril 1, 2007 By: Jennifer Merritt Home-Based Travel Agent
Tips to get you started in this lucrative business
SURELY YOU'VE HEARD THE OLD SAYING, "THE EASY WAY ISN'T ALWAYS THE RIGHT WAY." It's a cliché, sure, but it's also the most succinct way to describe an approach for how home-based agents can earn more money with groups. While selling group travel may not be easy, when done right, it can pay off handsomely.
In fact, the ability to work with groups is a strong advantage agents have over the larger and widely branded online competition. "It's a specialty market that currently doesn't have an online solution, so customers must go to the traditional agency model to book group travel," says Alex Mortensen, director of international programs and groups services for STA Travel in Los Angeles. "There are a few sites that try to do it, but it is more complex than standard travel," he adds. "That said, it is a very lucrative market and it's an area where agents can really shine."
Why so lucrative? Compare 10 percent commission on a customized FIT product for two to 10 percent commission on a group of 25 cruising the Caribbean.
Though selling group travel may be a great way to grow your profit margin, it's also the type of booking that requires great attention to detail. "You need foresight, because you always need to keep thinking ahead," says David Pistacchio, an agent with Lewis Travel in Fresno, CA, who just blocked space for 2008 trips. Because of the volume of travelers you're dealing with, any missed deadline, non-existent meal reservation or no-show car service will be magnified. Even so, before working on the details, you must first work on landing the client.
Getting the Business
While it would be nice to simply receive a phone call asking to book travel for a family reunion of 50 to Italy, many agents report that it often doesn't happen that way. Word of mouth was how Pistacchio says he built up his group business, which he estimates accounts for 35 to 40 percent of his earnings. While Pistacchio says new business is often garnered through an advertisement Lewis Travel runs on a popular local radio station, interest is more often stirred by a newsletter he sends out to guests he's accumulated over the years.
"I escort one cruise group every year and one land group every year," he says. "I take itineraries and send a flyer to past group members. I've been in the business for 29 years, so I've developed a very good mailing list, and it's qualified, so I don't send Tauck mailers to people who have a low budget."
If agents don't have the luxury of a three-decades-long list of clients, they should consider reaching out to local companies, churches, schools and volunteer organizations.
Your chances of selling a trip to a group may increase if you're affiliated with the organization to which you're pitching the itinerary. It's how Babs Cape, a Virtuoso home-based agent affiliated with Precision Travel, got her start selling to groups.
"I was part of a neighborhood service organization, and as soon as I became an agent, they decided to take a trip," she recalls. "I did it and I'm still doing it for them." From there, word of mouth spread to retirees, alumni groups and youth organizations. "It's always nice to find a pied piper," she says.
Like Pistacchio, Cape also sends out a newsletter promoting itineraries, and will also gather groups that way, even though participants don't always initially know each other. "They will grow to know other people on the trip," Pistacchio says. "Then because most business is repeat customers, I'll put out a flyer and get calls asking, 'Are the Smiths going?' It's putting the information out there and allowing myself to be the go-between."
Another innovative way of scoring group travel is to approach businesses. "I found a niche with incentive travel among home-building associations," says Trudy Lagerman, an agent with Liberty Travel in Selinsgrove, PA. "They set up quotas for employees to sell this many homes and then win such-and-such trip."
To get similar business, Lagerman, who says group travel accounts for 30 to 40 percent of her earnings, recommends contacting associations and presenting such programs to them. "If they hear that other companies do it, they may want to do it themselves," she says, adding that incentive groups love all-inclusive vacations. "When they're traveling like that, it's definitely the number one as far as a good sell," she notes.
Knowing the demographic group that a certain trip appeals to also is a good way to target an audience. "The majority of group travel clients are the older market, that being the baby boomer market," says Bob Whitley, president of the United States Tour Operators Association. "The average age is less than it used to be—about 60—but it's still the older market. More families are traveling together and that's a group trend, too."
Whitley adds that the product itself has changed to meet the needs of more sophisticated group travelers. "They want more leisure time and to see one or two destinations more in depth than before, not five countries in two weeks," he says.
Now that you've got your market and obtained commitment from a group, how do you make sure such intricate travel plans progress smoothly? Agents interviewed for this article unanimously say the devil is in the details. "I'm very into detail, and when you're doing groups, one of the main things to look out for is the deadlines with payments and deposits," says Pistacchio. "I pay very close attention to those dates. But detail work—that's nothing new to an agent."
Cape has devised a filing system to ensure her group business stays on track. "I use expandable file folders for each individual so that I can keep up with what I've sent to what person," she shares. She also keeps a list of who is signed up to do different activities.
Mike Nagel, a branch manager of a STA Travel office in Boston, says setting up a credit agreement should be a top priority. "You need to have a credit agreement first, otherwise you're getting 40 people calling you individually," he says.
For Nagel, proper preparation also means knowing how group air bookings work. Make sure you have an explanation prepared, he says, because first-time customers will ask questions. "[Clients] are getting a discounted price, but it might be more than the cheapest ticket out there. Repeat customers know this, but a first-time client will not understand that."
Lagerman echoes that sentiment. "A lot of people think they're getting a better price when they have a group," she says, which is why she finds it frustrating when a hotel or tour operator releases a cheaper deal than the one she booked. "A lot of times, groups are booked a year in advance," she says. "I see why companies would try to promote that, but on the other hand, groups are a big sell and I don't think groups who book in advance should be penalized for that."
Before a trip, Cape always holds a briefing party. "We go through the itinerary and the documents and any last-minute questions," she says, adding that she'll also distribute luggage tags at that time. In fact, it's that personal touch that she believes keeps clients coming back. "That's the important thing—why go with me, when they can go sign up for a tour on their own?" she asks. "It's being mom and pop on the trip."
Working With a Tour Operator
Alternatively, agents can work with tour operators that will handle all these details.
Another plus to working with an operator is access to impressive promotions. For example, Tauck World Discovery (www.tauck.com) currently is offering incentives for agents who book parties of 10 or more on any one of 26 departures throughout the United States, and Canada and Europe. Agents have the option of either having the eleventh guest travel free, or forgoing the complimentary tour and instead earning 20 percent commission on each traveler.
Tauck says an average trip price has more than 100 fully commissionable components included in the cost, meaning agents can earn commission on everything from theater tickets to tips for hotel bellman. Clearly, there's a lot of earning potential in selling group travel. For more info, call 888-237-0281 or e-mail [email protected].
TravelBound (www.booktravelbound.com), which offers itineraries across the world, is one. "We have a fairly extensive groups department of about 35 people," says Nico Zenner, vice president of sales and marketing for the company. What makes TravelBound unique is that it only works with travel agents and does not offer direct bookings to consumers.
Most important when approaching a tour operator with a group booking is—again—paying attention to detail. "Qualify the lead and find out as much as you can about whether they've traveled before, where they've been before, if they're serious and the type of budget they're working on so you can quickly go to the tour operator or wholesaler and secure the deal," advises Ilene Braum, vice president of marketing and sales manager for Gate One Travel in White Plains, NY. "We've provided quotations for a group and then they say, 'Wait, we only want four-star properties.'"
Braum says to give tour operators at least nine months lead time on trips. "We can work around the airlines not coming out with numbers until 11 months prior," she notes.
Zenner adds that group size shouldn't deter agents from asking for special requests, either. "The possibilities with a group are truly endless and possibly more economical," he says. "Opening a kitchen for two people is cost prohibitive, but for a group, it's different. We also can block some museums and attractions for groups of a certain size."
In addition, working with a tour operator sometimes can give an agent piece of mind. "I don't have to worry much about tours because a tour guide is there and they stay at four and five star locations," says Pistacchio.
Cruises, however, require more questioning. "When you're selling a cruise, you have to worry about the reputation of the cruise line that you're selling," he adds. "There's a lot more questions to ask when selling a cruise: the type of cabins offered, are there early or late meal seatings, what type of shore excursions are there? In a way, selling a cruise on a group basis is a lot more work, because you have a lot more questions to ask. But the trade off is, you're getting more commission on it."
And that is where all the hard work put into selling group travel pays off. Lagerman reports averaging 20 percent commission on group bookings. "It's a niche that can earn more money for the agent," she says. "It's definitely worth it and it will pay off in the end."