Many challenges advisors had to deal with in 2018 are still lingering and some new ones are looming as the travel industry starts a new year. Here is what you need to know to overcome them and stay successful in 2019.
The Challenge: Booking Windows Are Getting Longer
More travelers are taking to the skies than ever, putting an increasing strain on the most popular tourist spots. With the hottest destinations filling up, trips are increasingly being planned further and further out.
“People are booking a lot earlier for Europe in 2019 — I sit on the VisitBritain advisory council and airlines are saying forward booking numbers are double digits ahead for Europe than they were at the same time last year,” says Paul Barry, chairman at Avanti Destinations. “That data is a couple of months old, but it shows that people are planning their vacations ahead a lot earlier.”
Availability within the destination is a key factor. “This year, agents were finding that they weren’t able to get their prime hotels, tours and private guides, unless they book sometimes months and months in advance,” says Barry. “The prime locations, they get booked up months and months in advance. It almost becomes a self-fulfilling prophecy where once a destination gets noticed, the booking cycle gets further and further ahead of time as everyone tries to jump ahead of the curve.”
THE SOLUTION: To adapt, agents have to stay on top of industry trends, both in terms of destinations and airline policies.
“A few years ago it was Iceland, so we always have to be one step ahead of what’s hot,” says Jennifer Doncsecz, president of VIP Vacations, Inc., Whitehall Township, PA. “The world just seems to get smaller and smaller.”
In terms of air travel, “the best fares you will ever get are by booking six to nine months in advance,” says Barry. “Some of the big three carriers are offering advance purchase fares that are unheard of, especially in business class.”
Airlines are offering those good, long-term business class deals in an attempt to increase yield, especially among high-paying business travelers. But with many business travelers unable to plan trips so far in advance, the leisure sector can reap the benefits.
“The airlines want to get revenue-paying passengers in every single seat in every single cabin if they can,” says Barry. “That’s not humanly possible, but they don’t want to leave business-class seats empty three months out because they know that not many business people will pay full fare. They’ve made a strategic policy to get more people booking a long way in advance, and there’s not a single business person who will book a business-class seat nine months in advance, so it goes to the leisure market.”
In cruise selling, however, a longer booking window isn’t a challenge but the goal. Cruise lines now offer the best deals farther out, often with value-adds. That increases agent commission, avoids rampant last-minute fare discounting and trains clients to book early. So if ships are full close to sailing, it’s a plus.
Agents should spotlight the value they can bring: “Booking with a travel agent gives you something you can’t replicate on your own,” says Travel Impressions President Scott Wiseman.
THE CHALLENGE: How to Stay Visible?
With OTAs and large hotel companies spending big marketing dollars to stay top-of-mind with the traveling public, staying visible will continue to be another challenge in the coming year.
“I think that competing with OTAs, and hotels trying to directly sell to consumers, that still probably sits at the top of the list [of challenges travel agents face],” says Scott Wiseman, president of Travel Impressions.
VIP’s Doncsecz says that home-based agents could face particular challenges in this area.
“I was just at the Sandals Star Awards last week, and one of the speakers in their business forum asked how many people in the room were home-based agents,” says Doncsecz. “Something like 85 percent of the hands went up. So if agents are worried about remaining relevant and in sight, they can’t go hide in their homes.”
THE SOLUTION: Doncsecz says that her agency’s sales went up by 34 percent after they established a physical location — an historic building they painted a bright, eye-catching pink that’s clearly visible from the road.
“It’s not just about being found on the Internet, people have to be able to drive by and see, ‘Oh, there’s a travel agency there,’” says Doncsecz. “Even if they’re not going to walk into your building, they know that we’re still around. Social media can only do so much — it’s your circle. How much better is it to have a building for people you don’t know?”
Working with a trusted partner can also help mitigate some of the perceived advantages OTAs and direct bookings have — at least in the mind of uninformed travelers.
“From a pricing perspective, when you partner with a good tour operator, you get a couple of things, including a price match department that’s there to help you be [as] competitive as possible,” Wiseman said.
Agents should also work to spotlight the value they can bring to their clients, both in terms of pricing and in just having someone in your corner when things go wrong. “From a pricing perspective, there have been studies that show that booking with a travel agent gives you something you can’t replicate on your own,” says Wiseman. “And if you go somewhere and you miss your flight, getting a hold of someone to help can be difficult. So I encourage agents to sell themselves on that.”
THE CHALLENGE: Not Enough Time in the Day
It’s easy to feel like there’s not enough time in the day for all of the work that needs to be done, but the problem is particularly acute for travel agents, who are finding it difficult to find qualified hires.
“Agents say that they are having trouble finding people who are knowledgeable enough to pick up the reins of being a travel agent, so they are limited in the amount of time they can deal with new customers because they don’t have the staff to service them,” says Avanti’s Barry.
Barry notes that the disruption caused by the rise of Internet bookings, followed by the Great Recession of 2008, caused a gap in terms of people coming into the retail trade. “That’s starting to hurt the industry, when travel agents are in big demand because the ones who made it through that period are really knowledgeable and good,” he says.
THE SOLUTION: One way for agents to manage their time is by managing their client list.
“Agents can actually be selective with regards to their customers these days,” says Barry. When agents do take on a client, partners can also help manage the time crunch.
“Some agents say they avoid doing FITs — they’re too complex, and they don’t have time to pull multiple different vendors to book an FIT,” says Barry. “When it comes to that level of itinerary planning, it helps to have a tour company that specializes in that area.”
Even with the time crunch, however, agents should still take time to educate themselves — it pays off in the long run. “Those home-based agents do have the time in between servicing their customers to do a lot of education themselves,” says Barry. “Self-education and webinars have really grown over the last few years.”
CruzDiva Travel’s Diane Bower: “Being familiar with the products you sell means everything when talking to customers; they want your confidence and expertise.”
THE CHALLENGE: Keeping Up with Explosive Cruise Industry Growth
Increasingly, travel advisors’ cruise sales aren’t just for big ship products. They’re for everything from river cruises to yacht voyages, from expedition sailings to adults-only cruises or themed voyages. Just 25 years ago, some 40 cruise ships sailed globally, but today there are more than 450 with 100 more ships launching within the next five years, according to Michelle Fee, CEO, Cruise Planners, who also says those products are highly diverse.
New products on the horizon also include Ritz-Carlton Yacht Collection and Virgin Voyages. Looking forward, “it’s the craziest capacity increase in the history of the industry,” stresses Brad Tolkin, co-chairman and co-CEO of World Travel Holdings, parent company of CruiseOne, Dream Vacations and Cruises Inc. Given this fast-paced growth, product diversity, constant policy changes, product enhancements and technology updates, how do cruise selling agents keep up?
THE SOLUTION: Certainly, savvy agents tap into consortia, host or franchise group resources and attend conferences, boot camps, online Webinars, technology training and live streaming events. Refreshing vendor education is key, says Diane Bower of CruzDiva Travel, Huntersville, NC, an independent agency affiliated with the Avoya Travel Network. “Being familiar with the products you sell means everything when talking to customers; they want your confidence and expertise.”
During 2018, some 25,012 individual agent members affiliated with 8,732 travel agency members were part of Cruise Lines International Association (CLIA) in North America. CLIA’s annual Cruise360 conference — offering trend information, training seminars and 15 ship inspections — is April 2-8, 2019 at Port Everglades, FL.
But even with all the resources, “It’s important for travel advisors to not try to be everything to everybody,” advocates Charles Sylvia, CLIA’s vice president - membership and trade relations. He suggests focusing on two or three areas of expertise within the cruise world, a more realistic educational scope. “Review and update your specialties,” advises Nancy Miller, Trippin’ Around the World, an independent travel agent affiliated with the Avoya Travel Network, Pawtucket, RI. “I choose only a few so that I can know them thoroughly.”
“Time management and notification restrictions also play a key role in staying informed while maintaining top sales performance,” says Sylvia. He schedules his first 20 minutes a day to read about new industry developments and “additionally, I limit my notifications to only breaking industry news, so I am not distracted by content I should read the next morning.”
THE CHALLENGE: Not Leaving Cruise Money on the Table
When cruise sellers find the perfect vacation for their clients and finally make the cruise booking, another big challenge is that their mindset often navigates immediately to booking “the next” client. But pre- and post-cruise stays, travel insurance, commissionable shore trips or other private arrangements can add to the bottom line. To assist busy agents, several host / franchise groups recently have automated reminders to clients who’ve booked.
THE SOLUTION: “One area of focus is to provide agents with a clearer understanding that add-on sales are primarily about enhancing the experience for the traveler, with the ancillary benefit of increasing earnings,” says Kevin Weisner, senior vice president, Travel Leaders Group. He says even experienced travelers are often unaware of the savings benefits for re-booking onboard a cruise or the convenience of pre-booking a shore excursion to guarantee availability and avoid standing in line. “We’re also experimenting with bringing on sales assistants to take on some of this post-initial sale follow up,” says Weisner.
If not all future cruise deposits made on ships are turned into firm bookings, that can represent millions in lost revenue across the entire agency community. To assist busy agents, Cruise Planners is automating e-mails sent to clients to remind them of their deposits and the vacation waiting to happen. CP agents can still send out e-cards about the deposits to their clients within 30 days, but if they don’t, the automation will help convert deposits into live bookings.
Another revenue enhancer? Tolkin says that customer loyalty means the client desires to repeat an experience and will pay a premium for it. “We offer a great service,” he tells his hosted agents or franchise owners. “Please, please charge a service fee for your services.” Not all agents may agree, but one who does is John Gawne, independent vacation specialist with Cruises Inc., Virginia Beach, VA, who almost never waives a service fee. “It’s a significant part of my income — $24.99 for every booking and $35 per airline ticket,” says Gawne, who has been doing it for 14 years: “It’s not been an issue with my clients” as they strongly value his expertise and service.
THE CHALLENGE: Political Craziness
There’s hardly ever a moment in time where geopolitics isn’t playing a role in daily life — especially for the high-flying jet set crowd. And while there’s certainly a lot of “political craziness” in the United States, there’s plenty to be aware of — and potentially concerned about — in the world abroad: Great Britain is pushing forward with Brexit, the “Yellow Vest Protests” in Paris in December became violent to the point where top landmarks (the Louvre, Eiffel Tower and Galeries Lafayette) were closed for safety reasons, and places such as Turkey, Egypt and Mexico have been facing criticism as unsafe destinations for over a year.
Fortunately, and unlike certain natural disasters, it’s often easier to gauge when and where these issues will take place. Travel Agent spoke with Tania Swasbrook, vice president of Travelworld of Coronado (CA), to gauge her feelings on traveling in the current political climate. She tells us that this unrest has “unfortunately become part and parcel of travel” but it helps that it can be predictable; however, it’s an advisor’s duty to inform their clients of what’s happening. For instance, Swasbrook says she would tell clients looking to visit Paris (during the protests) it might not be the best time to go and that it may be best to look elsewhere for the time being.
Stephen Scott, founder and CEO, Travel Hub 365: “The luxury brands do what they can to protect the old commission rates on groups on a case-by-case basis.”
THE SOLUTION: “As an advisor, you need to be prepared and you need to make sure your clients are aware of what’s happening,” Swasbrook tells Travel Agent. “But at the same time, a lot of the political unrest can lead to a benefit for the client.”
It may be time-consuming to stay on top of the news from around the world and keep in touch with your supplier partners on the ground in those destinations, but, Swasbrook tells us, it’s all part of the job. “That’s the whole point of an advisor. Unless they come to me and say they want to visit Syria [or any other country on the State Department’s “Do Not Travel” list], I try to work with them and understand why they want to go to a particular destination.”
“I think one of the biggest trends [in the industry], now, is not where you want to go but what you want to experience,” she adds. “So, you have to understand what the client wants to experience, and you have to steer them accordingly.” And to back this all up, Swasbrook tells us she visited Egypt for Christmas and New Year’s.
It’s also worth noting that benefits can be found in such geopolitically uncertain times. Airfares and hotel and conversion rates, for example, could all work in the traveler’s favor.
THE CHALLENGE: Shrinking Commissions
Earlier in 2018, Marriott International became the first major hotel company to reduce its commissions paid to group intermediaries from 10 percent to 7 percent for all properties in the U.S. and Canada starting on March 31. Following on the heels of Marriott’s announcement, Hilton also announced cuts to group commissions effective October 1. Hilton was followed by InterContinental Hotel Group, which announced in May that it would reduce group commissions — also from 10 to 7 percent — beginning January 1, 2019. For a while, those remained the three largest companies to announce the cuts, until Hyatt said in November it will be reducing commissions from 10 percent to 7 percent for third parties booking group business at hotels in the U.S., effective February 1, 2019.
Stephen Scott, founder and CEO at Travel Hub 365, New York, tells us he believes other brands will continue the trend. “I believe that will further accelerate the industry advancement on this issue,” he says. “[However], I do not see that it will pour over to individual bookings, though, as they already work heavily through their direct channels.” When polled earlier this year on our website (www.travelagentcentral.com), 50 percent of agents responded that Marriott’s commission cuts would hurt their business “A lot,” while 21 percent more said it would hurt “A little.” Only 18 percent responded with “Not much.”
Unfortunately, there doesn’t seem to be any clear-cut solution. Scott says the cuts would not and have not dissuaded him from group bookings — and he believes the same goes for other agents. Many agents we spoke to have told us they’re fond of group bookings, but that the reduced commissions throw a wrench in the mix. “We [will] certainly lose out when commissions are lowered because we do so much work to pull it together,” Scott tells us.
It seems counter-intuitive, as many hotel brands have touted travel agents as being their bread and butter in recent years — especially in the luxury sector. “It is a fine line they walk,” Scott says. “It is confusing on the advisor side [but] from my experience, so far, the sales teams that visit our agencies do a phenomenal job at ensuring they support us along the way. It means a lot to us as we navigate changes, which are inevitable.”
THE SOLUTION: What agents can do to help navigate the commission cuts is retain and strengthen all of their supplier partner relationships. “The luxury brands do what they can to protect the old commission rates on groups on a case-by-case basis,” Scott tells us. But, most importantly, agents must remember: This isn’t strictly about commissions — it’s all about putting your clients in the best situation possible. If you keep nailing the trips, they will continue to return, meaning more opportunities for commissions in the future. Scott adds, “We are not going to simply book where we make the most money, as the client is No. 1 for us.”
AND MORE SOLUTIONS: Here are a few more ideas to help boost your bottom line, gleaned from Travel Agent’s “30Under30” class of 2018
- Promote and network: Invest marketing dollars in local ads, and get involved in high-profile events where you can promote your business.
- Upsell: Don’t hesitate to tell clients which room category they need to reserve to get the most beautiful views. The same goes for experiences. At the end of the day, people will go over their budget if it means getting what their vacation goals are.
- Be engaged, proactive: Keep an eye out for travel deals and make sure to get in touch with clients when you see something that might interest them.
- Add a personal touch: Send handwritten notes to clients on a regular basis, as well as welcome-home notes, and messages to commemorate successes, birthdays, milestones and anniversaries.
- Charging travel planning fees: Interior designers or business consultants charge for their time, so why should a professional travel advisor be any different?
For more tips from savvy Millennial agents, search “30Under30” at www.travelagentcentral.com.
USTOA ranks Iceland as the top emerging / off-the-beaten-path destination for 2019 and also number two on its “hot” list. Pictured is Reykjavik’s Lake Tjornin.
USTOA Study Cites Trends, Destination for 2019
Here are some key takeaways gleaned from a recent biennial economic impact study from Price-WaterhouseCoopers LLP (PwC) on behalf of the United States Tour Operators Association (USTOA). They may be used to help determine who to sell to and where to send them in the year ahead. Take into account also that USTOA members’ concerns may also mirror those of your clients.
While the Active Members of USTOA view the upcoming year with optimism, they also addressed the global risks that could impact the industry over the next three years. Terrorism topped the list with 17 percent of members responding they are “extremely concerned.” However, this level of concern is a considerable drop compared to the 2016 PwC study when more than half of member (59 percent) were “extremely concerned,” according to the study.
Political instability and overtourism, a new category this year, were the next two global risks that members were “extremely concerned” about, as named by 13 percent of survey respondents.
International: Italy was named the most popular destination for travelers in 2019. The top 10 “hot” places to go for next year also included Iceland, which ranked second, followed by Japan, Vietnam, Australia, France, Spain, Colombia, Cambodia and Portugal.
Emerging: Active Members identified their top 10 off-the-beaten-path or emerging destinations that they see gaining popularity in 2019: Iceland and Cambodia are one-two, followed by Croatia, Colombia, Vietnam, Portugal, Bhutan, Bolivia, Myanmar and Ethiopia.
“It’s interesting to see so many European destinations top the list this year,” says Terry Dale, USTOA’s president and CEO. “This validates the strong interest in Europe among consumers, driven by both more product and more demand including the growing river cruise market.”
Trends, Niche Markets
Demand for experiential travel programs continues to remain high. Roughly 82 percent of members offer art and culture travel experiences. Two-thirds of membership offer honeymoon and romance programs, 63 percent of members have adventure programs, and more than half (56 percent) sell multigenerational family programs.
When asked who is traveling, tour operator members responded that about half (48 percent) of their customer base are 51 to 70 years of age. The next largest category was age 36 to 50 years, representing 20 percent of customers. The female/male split is fairly even at 51/49. Within the escorted/guided and custom tour category, female passengers were represented slightly higher at 59 percent.
Wellness tourism is growing at a rate twice that of tourism overall, and should top $900 billion in annual revenue within the next four years. // Photography : Getty Images
Top Tip: Jump on the Wellness Bandwagon
Global Wellness Institute reports that wellness tourism grew from a $539 billion market in 2015 to $639 billion in 2017 — a growth rate more than twice as fast as tourism overall. It is projected to grow at an average annual rate of 7.5 percent through 2022 and reach $919 billion by that year. North America ranks #1 for wellness tourism revenues and Europe for wellness trips, but Asia is the eye-opening growth leader with wellness trips growing at a whopping 33 percent in just the past two years.