Written By: Tom Ogg, Co-Owner – Travel Professional NEWS®
I love to watch the old westerns where the stagecoach is being chased by bandits shooting their pistols at the stagecoach so they can hold it up. Of course, there is always someone riding shotgun whose job it is to shoot back at the outlaws to stop the robbery. The villains always make it a point to shoot the guy riding shotgun first, as they know that the driver cannot drive the stagecoach and shoot at the same time. I don’t know for sure, but I suspect that the best people riding shotgun are chosen by the best drivers and vice versa. This begs the question “who rides shotgun for the lousy stagecoach drivers?” It is highly unlikely that someone riding shotgun would show up for work on a stagecoach that was destined to be robbed.
Being a travel agent is very much like riding shotgun. We depend on our host agencies and suppliers to perform their jobs while we are the ones dealing directly with the customers. When clients begin shooting because of the failure of the supplier or host agency, we are the ones taking the bullets. Picking the right partners to ride shotgun for is critical to your survival and this becomes even more difficult now. Here are some things to consider when establishing relationships.
Host Agencies: Host agencies are very susceptible to financial problems during a difficult economy. Falling revenues while maintaining their overhead shrink potential profitability to a point where the host may become unviable. Now the question becomes, “how long can/will the host continue to lose money and what will be the consequences?” Over the years several host agencies have ceased operations and their agents have suffered the loss of their commissions that were due them, not to mention credibility with their clients. Here are some thoughts you should consider:
With well established and capitalized host agencies in existence, why in the world would an agent choose a host without these qualifications? 100% commission schemes, flamboyant promotions, promises of huge overrides, ma and pa agencies, agencies new to hosting, outrageous claims of growth and irrational behavior should all signal caution. There are several host agencies owned by public companies with sales in the hundreds of million dollars and these make total sense in troubled times.
Some of the failed host agencies have been written up in the trade publications for years as being suspect, why an agent would align themselves with a host agency in this position is beyond comprehension. If you read something about a host in one of the trades, be advised that it is probably true.
Host agencies that are publicly held have public financial statements. If they are offering a franchise opportunity they offer full financial disclosure in their FDD. If they are losing money, run the other way. Don’t believe the sales pitch.
You will find complete profiles of high quality host agencies at FindaHostTravelAgency.com.
Suppliers: All suppliers are faced with difficult challenges during the COVID-19 crisis. Those that are well capitalized and have an efficient operation will certainly survive and many will thrive. Those that are not may face failure. Operating costs, finance costs, the price of oil and currency fluctuation will have a dramatic impact on suppliers that face difficult times if not properly prepared for diminishing productivity. When times are tough, suppliers tend to discount prices to stimulate sales and revenue and this dilutes profitability. Here is what to look out for when choosing a supplier to sell.
If a supplier is a public company, check their financial statements to make sure that they are viable. That “buy one now and get one free later” promotion may not be all that it is cracked up to be if the supplier defaults. Make sure that the supplier is financially viable before booking with them.
If your client contacts you with an advertisement from a local paper that just “sounds too good to be true” it probably is. Steer them to a reputable company that offers a similar product and let them know that you have their best interest at heart. Offering deals that are “too good to be true” is a sure sign of financial weakness for small companies.
Always use your client’s credit card when making a booking. If the supplier fails, your client has a defense for non-performance by the supplier and will be able to recover their funds in most cases..
Always sell third party travel insurance that will protect your clients in case of the financial default of a supplier. If a supplier is specifically excluded by an insurance company, do not sell the supplier no matter how good the deal sounds.
Always use written disclosure agreements. In all cases, you should do your agency disclosure in writing along with your client’s acceptance or rejection of travel insurance covering the many potential claims a client may make should the supplier fail. Also, be sure to have your client sign that you have advised them of potential penalties, fees and cancellation policies of both the supplier and your agency.
One of the best reasons to use a travel agent in today’s economy is that they are insiders who possess knowledge to help consumers avoid scams, supplier defaults and other catastrophes that could ruin a vacation or trip. Shout the benefits of using your services and watch clients beat a pathway to your door.
The COVID-19 crisis saw clients that booked online were incapable of contacting the booking company for refunds, cancellations and everything else. Travel agents, on the other hand, were working on behalf of their clients to make sure everything was handled properly. This fact alone make travel agents an invaluable tool when booking travel.
Oh yes, don’t forget to load both barrels and come out shooting.