Selling in a Tough Economy

Consumers are buzzing about the “R” word. With rising foreclosure rates, soaring gas prices and an economy teetering on recession, you’d think selling a vacation right now would be an impossible task. Not so, says Margie Jordan, owner, ASAP Travel in Jacksonville, FL.

Despite the state’s plummeting home sales and the second highest foreclosure rate in the nation, Jordan is coping by helping new and existing clients find value in travel. Still, “the economy definitely has had a less than desirable effect on my clients’ travel plans,” Jordan emphasizes, citing one soon-to-be-married client who previously purchased two homes as an investment. Now, his primary home is in foreclosure and he’s moved into a smaller investment property.

“He’s also made sacrifices in his Hawaii honeymoon plans as well,” Jordan says, noting that “the client is renting a timeshare from a friend at a deep discount rather than staying at the luxury hotel where he’s getting married.”

But “it’s interesting because we're also getting more new clients than ever before,” says Jordan. “The state of the economy has prompted many travelers to seek the help of a travel professional in the hope they can find lower costs that they can't find on their own.”

Noreen and Mike Price, owners of Lighthouse Travel in Camanche, IA, agree. Their agency caters to a middle-class, small-town and rural clientele, and specializes in Caribbean and Mexico packages. “We are still attracting new clients at a steady pace,” says Noreen. While several clients are waiting to put down deposits until tax rebate checks arrive, “I am a bit surprised—and pleasantly so—that as we have progressed into 2008, the answer is ‘no’ to seeing an impact in regard to the economy and our customers’ travel plans.”

Still, others see a mixed bag. Gordon Dirker, director of sales and marketing, Brendan Worldwide Vacations, says high-end packages and retiree vacations are selling as usual, but otherwise, it depends on where you are in the country. “Some parts are doing well,” he says, “but in the upper Midwest, for example, things are a bit tougher.”

Selling in Nevada, which has the nation’s highest foreclosure rate, Margie Dolgin, president, Coast to Coast Travel in Las Vegas, acknowledges that “clients [in this area] are very concerned, but they feel they need a vacation.” So, how can agents most effectively sell in tough times?[PAGE-BREAK]

Tackle the Economy Straight On
Selling in a hard-hit area? Use e-mail to empathize with clients about their economic challenges, and do so in a positive way. Show that while groceries and gas have skyrocketed, vacations are a great value. Explain that you’ll work with them—regardless of budget. Give tips on saving gas. Heavily showcase cruises, free destination perks such as coupon books, value-packed tours and packages and all-inclusive resorts.

In addition, communicate all your services and areas of expertise. “The consumer may not realize that you can do more than [book] the product they’ve purchased in the past,” says Eric Maryanov, president, All-Travel, Los Angeles. Tell clients whom you’ve previously booked on a European tour, for example, that you also sell Tahiti vacations.  

Be Proactive in Client Relations
“Touch base with every client and review their travel history and future plans,” urges Mark Conroy, president, Regent Seven Seas Cruises. “Unless clients have lost a job, they are still traveling.”

But be compassionate with existing clients who have lost their job or face foreclosure. Tell them you’re sorry and you hope things improve. Keep in touch periodically via e-mail to ask how they are. The client having a tough “go” this year may be back on the vacation circuit next year.

Showcase Short and Close-In Vacation Options
When pitching the usual seven- to 10-day vacation your client always takes, also include a shorter option. “They are still traveling…but in some cases their travel is shorter than they originally had hoped for due to increased costs,” says Jordan.

And if a client regularly drives a lengthy distance for vacation, say from Florida to New England, explore rail, air and other options, such as cutting the drive in half by heading to North Carolina’s mountains. Also, alert clients to in-state “resident” discounts. Comb through options with care, though, as affordable accommodations or value-added perks may make a longer trip worth the drive.  

Hold Onto the Booking
Even after a deposit is made, clients with economic jitters may waffle or cancel. “Keep in touch, and keep them engaged by sending periodic e-mails with trip tips and shore excursion details,” says Conroy. “You want to [do this] so they commit to the trip instead of canceling when the final payment is due.”

A client of Jordan’s visited Kauai and Oahu last year, paying $925 per person for airline tickets. This year, the client wanted to take her family to Kauai and Maui. Unfortunately, the cost of an airline ticket per person was well over $1,200, far beyond the client’s budget. But Jordan rearranged the trip and saved the booking.   

“Be creative, look at all aspects of the trip and figure out where your guests can save money without compromising their experiences,” says Conroy. Clients might forego a €40 per person hotel breakfast and instead take a morning walk and enjoy a croissant and coffee at a local café, thus allowing for a nicer lunch or dinner. 

Expect to Work Harder
Nine-to-five will not cut it. “It’s taking more time to complete even basic travel plans because we’re looking for the best value within our clients’ budgets,” acknowledges Jordan. Clients are also working harder than ever with more overtime or stricter work attendance policies. Extended hours in your agency may help retain clients.  

Clients under economic stress also will appreciate pampering. Team up with a local day spa or other local business for a Saturday afternoon “stress reliever” program in your office. Showcase a destination, tour or cruise video, serve beverages, play soothing music, offer mini-massages, chat in a relaxed atmosphere and give away “Beat the Recession” prizes, such as a voucher for a tank of gas.

Emphasize Value Above All
Develop creative “Top Travel Values” to promote to your clients. Yes, you’ve likely promoted value in the past, but during an economic downturn, “value is absolutely everything,” says Maryanov. Promote such supplier or consortia perks as free breakfast, free transportation or onboard credits.

“Clients are still traveling, but they are [definitely] looking for value for their money,” stresses Dolgin. “I recommend they sail on cruise ships, or take all-inclusive vacations or Disney vacations.” Maryanov says cruises, all-inclusive resorts and Club Med are all hot right now with his travelers. 

As for European cruises, clients pay in dollars instead of euros, so “the overlying value is amplified for Americans,” emphasizes Bob Sharak, executive vice president of marketing and distribution, Cruise Lines International Association. Dirker says in terms of river cruising, most of what clients buy can be purchased in U.S. dollars, and hedging has helped with tour pricing as well. Short “sampler” cruises, tours and vacation packages may help you sell up, as clients trade less time for travel for more inclusive luxury features. [PAGE-BREAK]

Develop New Revenue Streams
“We have become more involved in bridal fairs around the area and, although some agents and agencies don't believe in the rewards being that great for these, we have made several bookings and it has been very worthwhile,” says Price.

Many agencies are turning to “luxury” sales to deliver more substantive commissions. This is a superb track if you are an exceptional agent and are willing to pull out all the stops for clients who expect, and often demand, the best. Other new revenue streams might include the mature market, group cruising, girlfriend getaways, golf, off-the-beaten path destinations, educational travel or insurance sales.

Don’t Stop Marketing
“The temptation is to cut back on all expenses, including promotion,” says Conroy. “Don’t do it. Just work harder to make sure every dollar you spend produces a return.”  Maryanov concurs: “The only reason we’re doing well is because we’re marketing.”

Seek co-op dollars
“Query key suppliers as to where their soft markets are, where their best opportunities are,” says Maryanov. “They’re suddenly more willing to spend some bucks if you focus on them and help identify their needs as relates to promoting to your clientele.”

Tap publicity channels
“Every time we go to a resort and meet the general manager or sales manager, we try to put that picture in our local paper,” says Price. Promote certifications or travel industry appearances in press releases and photos sent to local newspapers. Tell local media you will assist as an expert source for stories about travel in a tough economy.

Dirker says to talk to clients about federal rebate checks, because “it’s important to get out there with the message that ‘you have extra dollars, and if you need to recharge your batteries, spend it with my agency.’”

Encourage Early Planning
Clients who are stressed financially may be amenable to booking further out. Early-booking savings can help move a vacation purchase into the affordable zone for consumers whose mortgage payments or living expenses have risen. Plus, clients get the specific accommodations they want. “We have been very happy to have had repeat customers who have booked cruises and Caribbean and Mexico with us in the past already call—some as early as March—to inquire if the 2009 winter prices are out,” Price says.

Increase Cash Flow
Ramp up revenue by offering incentives to your employees or, perhaps, by considering client fees. Many of our experts say that it’s crucial to engage employees in the sales process and reward them for helping the organization achieve its goals. It’s a win-win for both owner and agent.

On the fee side, Maryanov’s agency charges $25 to $50 for a cruise booking and $25 for a tour. Perhaps somewhat surprisingly, clients don’t tend to complain about the fees. “It’s all part of the presentation made by our agents,” he says.

Make Memories
“While consumers may slow down some spending in tough economic times, hectic lifestyles make vacations more of a necessity than a discretionary expense,” says Sharak. So focus on how clients can relieve stress, recharge themselves and spend quality family time together. Focus on memory-making potential—something Disney has done effectively for years, say agents.

Moving forward, Sharak advises agents to “stay the course and invest in training to sharpen skills.” 

Agents say they’re ready to do that. “We are concerned naturally, but we will keep pushing forward and are excited about our travel business,” says Price. 

“I am letting them know I will try to find them the best deals out there,” stresses Dolgin.

As Jordan sums it all up, the extra work “may mean a few extra hours here and there, but I'd rather put in the extra effort and have a satisfied lifelong client in the end regardless of the economy.