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A Return of the Vacation Charter Air & Hotel Packages!

April 26, 2008 in George's Observations by George


You heard it here first. Watch for the return of the vacation charter business.
Vacation packages that use air charters as a component will make a stunning return in 2009. With the demise of Aloha and ATA airlines, Hawaii will be the first market that has various air charters flying happy vacationers to their beautiful islands.The major airlines are reeling, unsure of how to make money and mismanaged enough to alienate just about everyone in the process. They know then need to charge higher airfares to make operating profit and they also know that if the fares get too high in vacation markets, the traveling public will make other choices to use their discretionary income. This opens the door for larger tour packagers to offer air charters to keep the fares down and travel up to high volume destinations.Smart vacation charter operators will want to utilize a network of outlets that do not cost them anything until a sale if made. They do not have to make their products a commodity on the electronic merchatile exchanges known as Expedia and Orbitz. These smart tour companies will seek out the travel agents of the nation to distribute and offer their vacation packages.

George

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by George

Where are the Young Travel Agents ?

April 20, 2008 in George's Observations by George

I read with great interest the article in Travel Age West by J.L. Erickson (4/14/08) about the lack of new blood in the travel agent industry. As a former agency owner for many years, I can tell you that this is no secret. There is indeed a critical shortage of "quality" entrants into the travel business. Finding, developing and retaining GenX agents is next to impossible. If this does not change, the travel agent industry is doomed.

I propose that travel agencies provide a front-line agent Career Track to attract new people.

Obviously, the Internet has been the driving force behind the perception that travel agencies days are numbered. However, the fact that travel agencies are still around and thriving despite new competition, puts this argument to rest.

A greater argument is that travel agencies have not provided a "Career Track" for agents. Once an agent, always just an agent? Doesn’t sound like much of a career choice if you are young person deciding your future. Does it? Agency owners have simply not provided an opportunity for front-line agents to take their career to a higher level. If the travel industry provided a Career Track with goals to strive for, along with the accompanied peer status…..then becoming a travel specialist would once again be an enticing career.

Employees need goals and opportunity to work toward. Failure to provide this means you are looking for a people who does not possess the inner drive that makes a sales person thrive. A career track would provide the incentive for agents to seek out additional education and marketing opportunities for their chosen destination or travel niche. The reward will be higher income as they develop a larger, higher quality clientele. They will also be able to charge higher fees as a result of being a leading expert in a particular destination or style of travel. The agency will benefit as a result of being able to brand market their “Stars” individually helping establish the agency as an organization committed to quality and can be trusted for expert advice.

I propose the creation of three categories of front-line agent designations:

1) Travel Consultant
This is the starting point. Less than 3 years experience. Limited to selling commodity type travel packages and cruises.

2) Destination Specialist / Cruise Specialist
Minimum of 3 years experience and has completed CTC or Destination Specialist training. Has traveled to their specialist destination at least three times.

3) Custom Travel Designer – Minimum of 5 years as a specialist for travel to a specific destination or style of travel. Has completed CTC and DS program and has traveled numerous times to the destination or style of travel.

Once agents achieve a higher status they will possess a superior career self-image and confidence that will help them develop higher level clientele. They will also be more comfortable charging considerably higher consulting fees and more importantly the clients will feel better about paying it.

I believe that providing a career track for frontline agents would entice more young people to view the travel agent industry as a viable long-term choice. Additionally, existing agents would once again be energized and excited about the industry. Most importantly would be the marketing opportunities that would result. Consider for a moment if your organization provided a "Career Track" for your top performing individuals. What would change? Probably your working environment would become even more professional and your bottom line would increase as a result.

George Oberle
President
www.ReviewResorts.com

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Times are Tough ! – Will Luxury Hotels Survive?

April 9, 2008 in George's Observations by George

For the last 5 or 10 years, the emphasis in developing travel has been on the upscale or luxury market. 97% of the new hotels developed have been in the upper end of the quality and rate range. But times have gotten tough. For most of us in the US, our asset base is shrinking with the deflating housing market, $4 a gallon gasoline and the accompanying inflation.

So I have a question: Now that times are tough who is going to fill all these expensive rooms? It’s common knowledge that upscale resorts rely heavily on the middle class living large on vacation. Will the middle class traveler still spend the big bucks, or will they search for value?

The prevailing thought is that the rich will still travel. But do they travel enough to fill the excess capacity? My guess is that the middle class will still travel, yet will only respond to value. Economics 101 tells us that in recessionary times, people move toward inferior goods in search of capital preservation. Translated to the travel industry, consumers will not respond to high airfare or hotel rates. They will search for the absolute best deal or value. It may be freebies like extra nights, meal or bar credits, it may also be lower rates, but the message is that travel suppliers will be offering something to entice travelers to part with some of their shrinking assets. It’s going to be tough.

George

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What Makes Cents?

April 1, 2008 in George's Observations by George

First Aloha Airlines (1,900 employees) and now two days later, the announcement that Champion Air Charter (550 employees) are both ceasing operations. The graveyard of travel companies is sure to increase substantially in the near future.

A harsh assessment of the travel industry indeed. But consider that cost-push inflation and the accompanying recession are combining to make the term "stagflation" once again a relevant description of the US economy.

Stagflation is the worst of all evils for the travel business. The profit margins are razor thin in every sector of the travel industry. The Internet has stripped all excess profits in the process of making travel products commodities. Orbitz, Kayak, Expedia and the rest are all nothing but electronic commodity exchanges where there is only one way to get the top listing is to have the lowest price. Good for the consumer, bad for stability of the industry.

The combination of increasing costs and reduced demand are forcing businesses to make tough decisions. What makes "cents" providing a service with a certain cost structure, now provides substantial losses with the effects of Stagflation.

Unfortunately, stagflation will cause many more travel companies to disappear along with the jobs they create.

George