Taking Stock of Last Year, Planning for 2020

Hard as it is to believe, almost an entire year has passed since I last wrote about the importance of year-end reviews and renewals. The concepts in that piece are all still valid, but developments during 2019 lead me to suggest some additional planning factors that each agency management would be well advised to consider.

The fires in Australia and the earthquakes in Puerto Rico are harbingers of things to come. While each situation presents unique issues to consider in advising clients, agency management should develop at least a general policy about how these problems are to be discussed with clients by agents in the office or otherwise affiliated with the agency. Consistency will not only be helpful to the travelers; it will reduce the risk of inconsistent messages that could later be problematic if trip plans are disrupted by natural events.

The same point is worth considering regarding the political/military situation in the Middle East. Tensions are high right now and clients may be concerned about the risks of traveling to or near the area. What will agents in the office have to say about this? Ideally, everyone should be using the same key messages. Year-end review is a good time to establish policy on these questions because, I’m sorry to say, they are likely to arise again throughout 2020.

Another important point that was implied by last year’s article: This is a good time to evaluate with your accountant or attorney whether your business is optimized for both federal and state taxes. Most people don’t like to pay taxes, but they are, as Ben Franklin purportedly said, among the certainties. You should pay what you owe, but it is perfectly proper to structure your affairs to reduce taxes to what the law requires and no more.

The next point is inspired by some recent reading that delves into the fragmentation of reporting the news. With the emergence of the internet, the sources of news relevant to travel have multiplied many times over. Give consideration to appointing one or more people to track and advise others about specific news sources whose reporting touches issues of importance to your business. You want to be sure you are at least as well-informed about impactful current events as your clients. Your standing as an expert in travel matters may well depend on this as much as the skill with which you execute bookings.

This is also a good time to stress-test your business regarding the diversity, or not, of the markets from which you derive most of your revenue. It is widely reported that many agencies have specialized in either particular types of travelers or in specific destinations. This strategy has many advantages, but it also creates new risks. Overconcentration in one or two markets can leave the agency exposed to unexpected downturns in demand from a variety of causes, many of which are unforeseeable. Diversification can spread the risks resulting from specialization. At the other end, too much diversity can lead to loss of focus and lost profit opportunities. Balancing the risk and rewards of various forms of concentration/specialization in a well-considered plan is the best course. Evaluation of the specialization risk factor should be part of any year-end review.

Finally, this is a good time to consider an Emergency Action Plan (EAP) and, if you have one, to review it in detail with your staff so that everyone understands what to do if, for example, the office suddenly became unusable for a period of time. The causes of such disruptions always seem remote until they happen, and then it’s too late. The severity of storms, in all seasons, around the country seems to be increasing. What would you do if, for example, the roads were blocked and no one could reach the office for a week? Worse yet, what if the office were flooded or otherwise rendered unusable? Every business that supports families or that has duties of care toward customers in mid-travel should have an emergency operations plan and as much business disruption insurance as you can afford.

There are many sources of help for creating an Emergency Action Plan. You can start with the Occupational Safety and Health (OSHA) website and branch out from there as needed for your business’ particular circumstances. A simple and basic plan may be sufficient for a small agency, but bear in mind your obligations to be aware of and proactively support customers who are already traveling or whose travel is imminent. This role of emergency backup and helping-hand is central to travel advisors’ value proposition, and it is essential to be prepared to fulfill it.