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The Secrets of Our successMarch 31, 2008 By: George Dooley Travel Agent
Five top agents reveal their business strategies
Legendary Journeys of Sarasota, FL, is a powerhouse in cruise and tour sales. Last year, the agency generated over 6,000 cruise passengers for Carnival alone and 15,000 total, which positions the business as a top producer by any industry standard.
But Legendary Journey’s accomplishments underscore a new reality for travel agents: Success in the industry and being able to emerge as a top producer for a major supplier isn’t achieved alone. Top-producing agencies have strong collaborative relationships. They develop creative partnerships with preferred suppliers, apply new booking and communications technologies, market aggressively and work closely with their agency groups. In brief, top-producing agents are also first-class business-relationship managers.
Take Legendary Journeys (www.legendaryjourneys.com), which has 12 offices in Florida, as an example. In an interview with Travel Agent, Vice President Al Ferguson said that Carnival won high praise for its product quality, management, promotional skills and sales support. “Carnival has been loyal to us, and we have been loyal to Carnival,” says Ferguson.
Success Strategy #1
Top-producing agencies have strong collaborative relationships.
They develop creative partnerships with preferred suppliers, apply new booking and communications technologies, market aggressively and work closely with their agency groups.
Top-producing agents are also first-class business-relationship managers.
Ferguson also has turned orthodoxy on its head, effectively selling “Fun Ship” Carnival cruises to seniors, who are a key market for Legendary Journeys. “Our senior clients—not just younger cruisers—enjoy Carnival and keep coming back for more.” They like the fun and ambiance.”
Ferguson also credits Carnival with a solid history of innovation, not only with launching new ships, but also introducing new itineraries, such as South America, that have great appeal to repeat clients. Agents, says Ferguson, should match the suppliers to their clients’ needs.
While loyalty to proven suppliers is a factor in Legendary Journeys’ success, Ferguson sees many other elements involved in the process. Membership in agency powerhouse Vacation.com is another big plus, as is recruiting and nurturing good staff.
Quality staff, like quality suppliers, is essential, Ferguson says. So is knowledge of the market. For example, Legendary Journeys has found a profitable niche in combining cruises and tour programs—pre and post—especially in Europe.
“We deal directly with receptive operators in the country rather than work with a tour operator—creative cruise/tour bundling, if you will. Receptive operators provide real expertise at the point of delivery, and it makes economic sense for us.”
Ferguson argues that successful travel agents must be effective managers, keep their eye on the bottom line and avoid dilution of revenues. “Focus on profitable growth and work creatively with preferred suppliers. Beware of traps, such as discounting, and listen carefully to the marketplace.”
Last, but not least, Ferguson sees a clear need for large agencies to use technology effectively—whether that technology is the agency’s own or the supplier’s or systems offered by agency networks. This includes effective telephone call-routing systems to distribute sales calls. Legendary Journeys uses WinCruise booking technology.
The ultimate goal is satisfied clients who come back to the agency—and to suppliers such as Carnival. Legendary Journeys has built relationships, not only with suppliers but also with staff and clients.
Other leaders share Ferguson’s respect for Carnival as well as his formula for a successful business. Pat Seifried, owner of Travel Beyond (ww.travelbeyond.net) of St. Petersburg, FL, sees her company’s success as “the result of a combination of things. We have strong links in the community, for example, and rely on word-of-mouth recommendations rather than paid media advertising. We also have a well-traveled and expert staff and outside agents.”
Pat Seifried, owner of Travel Beyond, St. Petersburg, FL, sees the success of an agency strongly tied to community relationships, personalized service and strong management skills
Travel Beyond was formed in 1986, and today has sales in the $4 to $5 million range. Seifried’s agency handles both cruises and tours and develops a lot of groups, including church groups. She has three inside and 10 outside agents.
Seifried also believes that successful agents must have strong financials and sound management skills. Travel Beyond is also a member of Vacation.com, because the company has a strong program that offers Travel Beyond advantages—including preferred supplier agreements.
Seifried does not believe that her agency has been seriously impacted by online travel sellers, such as Expedia, at least in terms of competitive pricing. Regardless, she is upgrading her website. “We see the key advantage of travel agents delivering personalized service of high quality. When clients call, there is a live operator not an answering service.”
Pam Kochav, chief operating officer of Abracadabra Travel (www.cruisemagic.com) in Alpharetta, GA, has still another take on success for travel agents—notably, by stressing the importance of using technology. This includes having a strong online presence with solid service and sales support from skilled travel agents.
A top producer for Carnival, Kochav’s agency is cruise-only. She estimates that 90 percent of business comes from online sources. “Travel agents have to use new technologies and the web to build business. They can compete effectively with the online giants.”
Kochav has grown up with technology, including the startup of the WinCruise program widely used by agents. A member of Vacation.com, Kochav sees extraordinary opportunities ahead for well-managed agencies that compete effectively.
Kochav also makes an important point: Agencies that are top producers for one cruise line are likely to be top producers with other cruise lines and suppliers. They have core competencies that serve all of their supplier partners and their client base.
Top-producing Carnival agents in Carnival’s Pinnacle Club, for example, include highly successful, high-visibility agencies, such as America’s Vacation Centers (AVC). AVC, in turn, is a top producer for Royal Caribbean International as well as Norwegian Cruise Line.
Priscilla Alexander’s Protravel International (www.protravelinc.com) in New York City ranks among the most successful agencies in the U.S., with sales of $500 million in 2007 and a staff of 550 in 22 locations. Protravel also has earned a reputation for delivering quality services, both on the corporate and leisure side of the business.
Alexander is also a top producer for industry suppliers, including high-end luxury cruise lines, such as Silversea. What’s more, Protravel is ranked among the top producers for Virtuoso, the global luxury-agency network.
“Relationships drive everything,” Alexander says. “But it has to be a productive relationship between the agent, agency, supplier and client. Our dedicated clients are our best sales force, and their word-of-mouth recommendation is critical.
“Our travel agents must be good listeners and have great communications skills,” she adds. “They must know the suppliers’ products and understand the clients’ needs. They have to match client to product and product to client. And clients like to share the names of good agents with friends and associates.”
Rather than serving a client for one trip, Alexander wants Protravel agents to build lifetime relationships. “We often forget that travel agents are professionals who offer expertise and judgment that are valued by many.”
Success Strategy #2
“Relationships drive everything. But it has to be a productive relationship between the agent, agency, supplier and client. Our dedicated clients are our best sales force, and their word-of-mouth recommendation is critical.”
A veteran agent, Alexander also sees the new breed of travel agents as more professional than the agent of yesteryear. “Today’s agents bring technology, marketing and sales skills to the business, along with product knowledge.”
Technology is a key component in the success of any agency, Alexander says, but it must be technology that increases productivity and enhances the value of the agent and the agency. She urges agencies to measure their own performance and to set high standards.
Alexander believes that top-producing agencies will increasingly use service fees that are firmly based on outstanding client services—either on the leisure or corporate side. “While travel agents are dependent on suppliers for product delivery, they can make a critical
difference with their professional judgment.”
As with the other successful travel agents mentioned, Alexander sees Protravel’s relationship with its agency group—in this case, Virtuoso—as a distinct asset. “Virtuoso has an excellent reputation and virtually brands us in the eyes of the client and suppliers.”
Alexander also urges success-minded travel agents to get involved with suppliers’ advisory boards and to offer input. “Smart suppliers listen carefully to what successful agents—who are close to their clients—have to say.”
Quality suppliers will reward agents based on performance and productivity, Alexander says. She urges agency owners and managers to use performance benchmarks, including those set by their agency network. “Agencies must deliver on their promises. Productivity and performance are the keys.”
The coming year looks extremely promising, according to Alexander, with Protravel International setting records for sales in January and February 2008. She expects annual sales to hit the $550 million mark this year—a testament to outstanding staff, a strong management team and loyal clients.
Montrose Travel (www.montrosetravel.com) of Montrose, CA, also ranks among the top-producing agencies in the U.S., and Andi McClure-Mysza, who serves as president of MTravel (www.mtravel.com), Montrose’s independent contractor division, is acknowledged as one of the industry’s leaders. She is also the president of PATH, an association of host agencies.
Success Strategy #3
“It’s critical to run the company by the numbers. This means understanding how and where the profit is driven, investing in new opportunities and folding on business that doesn’t make sense. It means it’s okay to fire your unprofitable customers. We live in a low-margin industry so there’s not a lot of room for mistakes. Grow from profits, not by creating debt.”
In her view, there are sound reasons some agencies become more successful than others. “A key reason for success is effective recruitment, motivation and training of quality front-line agents,” she says. “In the end, an agency is only as strong as the people who are serving its customers. While it sounds simple, it’s very difficult to juggle all the components to doing this successfully.
“Along the same lines, hands-on, tenured, strong leadership is also critical to an agency’s long-term success. Large, profitable companies are not built and sustained by one individual. They are also not associated with absentee owners.
“Another major factor is creativity and flexibility,” McClure-Mysza continues. “Our world is in a constant state of flux. Those who are unable to adapt in the ever-changing market have a difficult time surviving, let alone prospering. Take the airline-commission cuts of the 1990s. A significant number of brick-and-mortar agencies were either unwilling or unable to turn on a dime to re-engineer their businesses to enable profitability. Many agencies folded.”
Next on McClure-Mysza’s list of recommendations are drive and commitment. “It takes driven, motivated people with ‘fire in their bellies’ to succeed throughout the organization. This doesn’t happen 9 a.m. to 5 p.m.”
Another factor is a strong comprehension of the financials, McClure-Mysza adds. “It’s critical to run the company by the numbers. This means understanding how and where the profit is driven, investing in new opportunities and folding on business that doesn’t make sense. It means it’s okay to fire your unprofitable customers. We live in a low-margin industry, so there’s not a lot of room for mistakes. Grow from profits, not by creating debt.”
Diversity is another of McClure-Mysza’s strategies. “Definitely do not place all your eggs in one basket,” she says. “While it’s a thrill to land a multimillion dollar account, if your company isn’t suited to handle it from a staffing and technology standpoint, it could put you in a precarious position, especially if you lose it. Montrose Travel has been built by incrementalism and diversification. Leisure, corporate, group and independent contractors sell lots of accounts rather than servicing just a few large ones.”
Strong, purposeful preferred supplier relationships is yet another key component. “Since agencies act as middlemen in the transaction, strong supplier relationships are absolutely critical,” McClure-Mysza explains. “We’ve selected a good mix of preferred supplier ‘partners’ and have supported them over time. We evaluate those relationships annually and meet face to face with these suppliers throughout the year to fine-tune our volume, marketing/co-op and booking incentives. These relationships pay off in increased earnings, client/booking assistance when needed, training and much more.”
Agencies must embrace technology, she emphasizes. “[Technology] is here to stay, and it not only creates efficiencies that drop money to the bottom line but also plays a significant role in the sales and marketing process.”
McClure-Mysza also encourages agents to “love and cultivate” their customers. “They are your reason for being. In the end, 80 percent of a successful company’s business should be repeat and referral business. Customer retention is more efficient from a cost standpoint than having to constantly drum up new clients.”
Do top producers still get co-op dollars? Yes, McClure-Mysza says, generally with a formula based on a percent of sales. Does the effectiveness of district sales managers (DSMs) help? “Absolutely. We are much more effective selling the products of the DSMs, who are constantly in our offices working with, training and incentivizing our agents.”
Are there in fact secrets to success or does it simply come down to sound business judgment? “There really are no secrets to our business. It’s a matter of having a good handle on your business financials and exercising good judgment. And relationships matter, with your customers, your employees, independent contractors and suppliers.”
What Agents Can Learn
Are there lessons to be learned from these agencies? One certainty is that while there is no single business model that ensures success, excellent management skills are essential. All top producers have outstanding, but very different, agency-business models, validated by the agents’ survival in a competitive business.
Suppliers and their staffs also win recognition. From Carnival to Royal Caribbean and Silversea, Trafalgar to Globus, Marriott to Starwood, successful travel agents are dealing with many of the best-known and best-managed travel firms, including world-class brands.
Travel agencies benefit from skilled supplier promotions as well as supplier recognition of the vital role travel agents play in building sales and market share. Agents also gain from suppliers’ multimillion-dollar investments in ships, services, staffs and technologies.
Productive agencies and agents also reap rewards in high commissions, overrides, cooperative marketing programs and recognition. Perhaps the true key to the success of travel agents may be building productive, high-integrity relationships that endure.
MAST Travel Network
John Werner, president of Mast Travel
John Werner, president of Mast Travel
Network (www.mvptravel.com) of Oakbrook Terrace, IL, an agency-owned cooperative with 170 locations in eight states, views agency success from a perspective similar to other leaders in the industry.
“Agents become top producers for travel suppliers by following some basic rules of effective agency management and decision-making in a competitive industry. It’s less a question of ‘secrets’ than applying good business practices,” Werner says.
Werner’s rules include: “Top producers educate themselves on the supplier’s product, learn everything there is to know about the product, including features and benefits that may be unique to that supplier or something they do better than a competitor.
“Next, focus on marketing and sales promotion with that supplier. Third, maintain a relationship with a proactive district-sales manager or business-development manager, and be proactive with customers by sending them travel information and offers of interest to them provided by the suppliers.
“Finally, know everything there is to know about your customers, so you can work with the right preferred suppliers on their behalf and maintain extensive client-data profiles in the agency database.”
Werner sees MAST Vacation Partners playing a key role in building agents’ success, by providing education and training, technology, sales promotions and networking among MVP members. “Entrepreneurial spirit and determination are essential, but today’s agency does not have to go it alone.”