Top Business Strategies for Travel Agencies During and After the Pandemic

Oct 19, 2020

Steven Shulem, president of Strictly Vacations, can recall three major disruptions to his 31 years of experience in the travel trade industry: 9/11, the bird flu epidemic and the 2008 financial crisis.

“After 9/11, I really thought people were never going to travel again,” he said. “But it all came back with a vengeance. It was the same in 2008, though I had to sell stocks, take out loans and tell myself, ‘I know this is going to turn around.’”

Still, the high-end travel advisor says nothing could have prepared him for the impact of the COVID-19 pandemic.

“My income has been shut down because there are no cruise ships able to sail,” said Shulem, who is fast approaching $5 million lost in trip cancellations this year.

Shulem has operated his travel agency, based in Santa Barbara, Calif., from the open road since September 2018. At the onset of the pandemic, he was serving as the Signature Travel Network host for Crystal Cruises’ Crystal Serenity World Cruise, which was forced to dock ahead of schedule in Perth, Western Australia. Faced with the option of returning to the U.S. or remaining Down Under, Shulem decided to stay put — and he hasn’t left since.

Business is far from usual for Shulem, who rises early to keep U.S. office hours. However, he feels grateful to be uniquely well-positioned to conduct business virtually and to have valued cruise partners, many of whom have paid commissions despite incessant cancellations.

But not everyone has the balm of protected commissions, the foresight of remote operations nor the wisdom of having navigated — and survived — other industry-shattering challenges.

Across the travel trade, businesses continue to bear the brunt of the coronavirus. Rather than rest on their laurels, though, countless advisors are unwavering in their resolve to make it through and — thanks to strategic business changes — come out the other side stronger than before.

Fickle Fortune

Charging consultation or planning fees has long been a hot topic of debate for advisors. The current downturn of tourism has only compounded the matter, at the same time bringing into question fees for other services such as changing or canceling trips.

Justin Wolfson, an independent advisor for Chubit Travel, has long contemplated — but resisted — fees. He now believes his clients would be happy to pay for a planning fee that goes toward the booking if a trip were finalized; if booking the trip goes awry, the fee would then be forfeited as payment for his work. Cancellation fees are on the table, too.

“Most suppliers charge cancellation fees, and my clients are OK with this,” he said. “But my clients don’t know that, as an agent, I don’t end up receiving that fee and make no money on the booking that I might have spent hours, days or even weeks putting together.”

Meanwhile, Lauren Garner, an independent travel consultant with Travelennium, has added nonrefundable fees for planning, changing and canceling trips. She likens the advisor role to a tradesperson who examines a broken refrigerator and tells the customer it would be cheaper to purchase a new fridge than to repair the one at hand. Afterward, the customer still owes the worker a service fee — just as clients should be obligated to pay their travel agents.

“A travel agent does all this research and planning for a customer, but if the trip is canceled, she receives no money for all the time spent consulting, researching and planning,” Garner said. “Or, an agent does all this work and then the customer takes the information and goes online to book his trip for a minimal amount of savings, and again, the agent has been paid nothing.”

Prior to the pandemic, Tracy Whipple, owner of Travel On A Dream, only charged planning fees for FIT trips and airfare; since then, she has added this type of fee for trips to Walt Disney World Resort (due to the theme park’s frequently changing regulations) as well as cancellation fees across the board. She says that the potential for change fees is included in client terms, but such situations are evaluated on a case-by-case basis.

“We decided to charge $50 per person for a canceled cruise and $75 for a custom FIT tour,” she said. “It’s a reasonable amount that people can get behind. We explained to our clients that with so many cancellations after we had done all the work, we’re basically making nothing. This is just to help offset our losses, though it does not fully compensate our efforts.”

We explained to our clients that with so many cancellations after we had done all the work, we’re basically making nothing. This is just to help offset our losses, though it does not fully compensate our efforts.

Another method to counteract losses is to raise planning fees that were already in place. According to Caitlyn Gambino, owner of Aum Journeys, this helps to account for cancellations as well as to provide herself a more guaranteed source of income. Plus, it avoids the designation of cancellation fees because “she wants to be associated with the feelings of security and care when [clients] think of booking their next trip.”

“I haven’t received any pushback on raising fees yet,” Gambino said. “The constantly changing nature of travel and different destinations right now has shown the general public our value more than ever.”

Many travel advisors are updating their fee structures.
*Credit: 2020 Andrey Popov/stock.adobe.com*

Now Hiring

As the owner of Jus Adventures, a hybrid retail and host agency, Samantha Hammond has not only added cancellation fees for her business, but she’s also re-evaluating price tiers for advisor memberships. At the beginning of this year, the company had more than 80 advisors; today, the number has dropped to 60.

This month, Hammond’s host agency has begun to market its decreased membership prices in hopes of retaining members or enticing other advisors to join.

“A lot of people have been inquiring about becoming a travel agent while also saying, ‘We’ll wait until after the pandemic’ — but people are still traveling,” said Hammond, who recently sent clients to Egypt. “Trying to get that point across to potential agents has been difficult.”

Cheryl Bunker, vice president of global member partnerships for Virtuoso, says the advisor network is witnessing “agency reinventions” as advisors continue to adapt to the present reality.

“Agencies are looking at their compensation plans, such as [whether to be] commission-only or salary plus commission in the future,” she said.

Hammond believes that now is the perfect time to become an advisor, especially since consumers are looking for professionals to help them navigate the difficulties of traveling during COVID-19.

“While we have this downtime, new advisors can actually learn the industry,” she said. “So, once we have that influx [of bookings], they are already fully prepared.”

Game Changers

Seasoned advisors, too, have mastered productive ways of utilizing any freed-up time.

Don Jones, senior vice president of Protravel International and Tzell Travel, says he feels heartened by the numerous agents enthusiastically engaging in education — what he calls “a game changer if the knowledge is, in fact, something [they] can leverage when travel comes back.”

“They’re using this time to learn about new properties and experiences, and the new experience piece is important because people may be traveling differently in the next six to 12 months,” he said.

Protravel and Tzell are currently in round two of beta testing a new program where agents are paired with financial planners who specialize in entrepreneurship and small businesses. According to Jones, the initiative has been remarkable thus far: Some agents are studying programs such as QuickBooks and Microsoft Excel for the first time, in addition to learning and implementing best practices and strategies.

“When it came down to it, people realized they had just allowed their businesses to happen, and many of them were very successful that way,” he said. “But when there weren’t checks in the mailbox, then they had to think about their businesses differently. Were their personal finances commingled with their business finances? Was that messy? Yes. Was that the best way to run a company? No.”

When it came down to it, people realized they had just allowed their businesses to happen, and many of them were very successful that way. But when there weren’t checks in the mailbox, then they had to think about their businesses differently.

The goal, Jones says, is to examine results and understand the program’s productivity, and figure out how to scale it to the rest of Protravel and Tzell’s advisor base.

For Keisha Adriano, a travel consultant at Travelwise International, self-development — from leadership skills to service structure — is a primary focus for her and her colleagues.

“Each agent has a weekly two-hour development [session] used to help perfect their craft,” said Adriano, who cites educational videos on motivational leadership, handling objections, asking qualifying questions and more.

Afterward, management will assess each advisor’s learnings, and they’ll work together to execute the curricula into practice, she says.

“We quickly realized that the relationships that we built with our clients is our competitive edge, and we focused on the details of our service and made them uniform among our team,” Adriano said.

Push and Pull

Still, all sorts of relationships have been put to the test during the COVID-19 crisis — including those between advisors and clients.

Virtuoso’s Bunker has noticed a trending appraisal of who is the “right” client for certain agents: a well-defined profile that she says will be key to recovery.

“Advisors are dividing their clients into an A, B and C-grade type list, and they’re focusing on those who will generate the most revenue in the future, or those who are great promoters and offer referrals, too,” Bunker said.

Ryan Taylor, owner of Ryan Fitness & Travel, is reviewing his operational structure, particularly how he handles new incoming business and how he works with his clients.

“I’m a one-person travel agency — so I own my business, but I’m doing all of the work,” he said. “I’m putting an emphasis on adding more touch points of communication with my clients and providing them with more content.”

And as working remotely may become the norm even after the pandemic, advisors are getting creative with how they liaise with their colleagues, too.

Katie Ehlers, owner of LuxTravel Katie, an affiliate of Classic Travel Connection, says that her agency swapped out Facebook Groups in favor of Basecamp, a streamlined project management and internal communication platform. There, she and her fellow advisors share the latest coronavirus updates and travel news, in addition to other crucial information for planning successful travel.

Advisors are looking to align themselves with ideal clients.
*Credit: 2020 girts/stock.adobe.com*

Future Forward

There’s no question that 2020 has been an extremely divisive year, but one resonating notion unites advisors throughout the industry: They deserve to be more respected for their work.

Aum Journeys’ Gambino is hopeful that advisors can come together and demand that their value is not only recognized, but also rewarded accordingly.

“If the general public had a better understanding of how the industry worked and what really happens behind the scenes — including what they’re paying for, and why — they would be happy to pay for the service,” Gambino said. “But there has been so much obscurity and tiptoeing around the subject in the past that I think consumers have a lingering distrust for travel agents. We need to lift the wool that has been over their eyes and be completely transparent, because that’s the only way we’re going to be able to move forward in a mutually beneficial and sustainable manner.”

We need to lift the wool that has been over their eyes and be completely transparent, because that’s the only way we’re going to be able to move forward in a mutually beneficial and sustainable manner.

Adriano at Travelwise International believes the pandemic has been edifying in many ways. She names several pressing issues that have come to light, such as improving, evolving and securing standard documents needed for credit card authorizations to protect advisors; and putting liability protections in place when booking with suppliers. Adriano also recommends that advisors tap into resources offered by the American Society of Travel Advisors, where they will find “vetted travel agency owners, travel advisors and independent contractors who come together to find solutions to improve our industry, livelihoods and mental health.”

“As a travel industry, this crisis has been a true revealer,” she said. “We have found too much inefficiency in the way we do business. I encourage others to create urgency for innovation to result in a faster recovery.”