5 Business Lessons We Learned in 2013

This is the latest in series offering insights and advice from the president and CEO of Travel Agency Management Solutions (TAMS).

It’s that time of year again – time to look back and ask what we learned in the past year, or should have learned, and to resolve to do better in the year ahead.

Here are my top five lessons from 2013 for travel agency owners and managers.

#1. You must find time to work ON your business as well as in it.

Selling travel, and making a profit doing it, is more of a challenge every day.

Although the number of agency competitors has declined, the intensity and sophistication of competition – from other agencies, from OTAs and from suppliers – has intensified. At the same time, traditional revenue streams have not kept pace with expenses.

This means you cannot afford to leave your business success and survival to chance. In today’s operating environment, every agency needs big picture management.

This should translate to a well-conceived and well-executed business plan, an operating budget, a personnel training and recruitment plan and a marketing plan that encompasses consortia programs, customized local agency initiatives and an annual supplier coop strategy.

#2. Agency expenses are like a three-year-old child. Take your eye off them for a minute and they will run away from you.

The 120 TAMS agency members in North America saw robust increases in revenue in 2013 over 2012, and bookings for travel in 2014, 2015 and even 2016 are impressive. The problem is that expenses are increasing significantly as well.

It’s no news that during the height of the recession agency owners paid extraordinary attention to understanding, reducing and controlling expenses. Unfortunately, as business improved, many agency owners and managers took their eyes off the expense side of the business ledger.

In extreme cases – and I’m seeing too many of these right now – expenses have been rising faster than revenues, leading to a diminished bottom line. This is sad, at the very least. It is tragic in the extreme.

In good times and bad, the travel agencies that survive and prosper are those that are tenacious about routing out unnecessary expenditures.

#3: If you want new agency talent, you will likely have to grow your own.

The travel agency industry’s personnel doomsday clock is rapidly approaching midnight.

A 2011 survey by PhoCusWright found that 58% of leisure agents were over 56 years old, and my TAMS members and agency clients continue to lament that they cannot find qualified, experienced agents.

Today’s reality is that the usual strategy of hiring experienced leisure agents who someone else has trained is no longer as viable as it once was. The next generation of agents increasingly will come from the ranks of prospects who show potential but have no prior experience.

In many cases this is an opportunity with far more positives than negatives.

Case in point: When the owner of a TAMS member agency that focuses on luxury travel saw a young saleswoman in a Tumi store successfully selling luxury luggage, she immediately offered her a job. The new employee is tech-savvy, high energy and enthusiastic; she is learning the travel industry quickly and, no surprise, is starting to light up her travel sales.

#4: Consumers need and want quality travel advice, but not advice they can Google on their own.

There is a well-known TV news commentator whose talk show featured a segment called “Tell Me Something I Don’t Know.” Your consumer travel prospects are sending you the same message.

It is increasingly obvious that travel consumers need and want expert advice and quality information that they can’t get on their own. And they are willing to pay for it.

If you are an agency that cannot bring personal, experienced and insider information to a client’s travel plans you are doomed to dealing with price-comparison shoppers and mass-market competition, and that means you are living on borrowed time.

You must invest in developing a knowledge base.

And you must go deep rather than wide, developing specializations that let you provide clients and prospective clients with information they can’t find easily on Google and for which they want an expert’s recommendation and seal of approval.

#5: Suppliers who gave you the cold shoulder when they were flying high will be back on your doorstep with flowers when things turn stormy.

One of my favorite quotes from Maya Angelou is: “When someone shows you who they are, believe them the first time.”

Over the past few years a few well-known supplier “partners” have given the travel agency distribution system the cold shoulder. They’ve created disingenuous commission schemes that reduced agency compensation, turned away from coop promotional support, prohibited agencies from using their name in their online marketing, eliminated rep support and more.

It is, of course, their right to do so. It is also your right to remember they have done so.

Long-term business relationships are built on a win-win platform. Win-win means more than mutual gain on individual transactions; it also means support over time, through thick and thin.

Next time: Turn the business lessons of 2013 into action plans for 2014.

Dr. Robert W. Joselyn, CTC. is president & CEO of Joselyn, Tepper & Associates, Inc., a travel agency consulting firm, and of TAMS, LLC (Travel Agency Management Solutions). http://www.joselyntepper.com/