Agency Owners…Now Is Your Time To Strike
On May 1st, Apple Leisure Group and The Mark Travel Organization finalized their merger. For owners and managers of travel agencies looking for an opportunity to take your business to the next level. Now is your time! Let me explain.
But before I continue let’s agree on one thing:
The travel agency space has fundamentally changed.
The fallout from this change is still coming but there’s no question — a major shift has occurred. If you are not buying into this premise, please go here and enjoy the insights. If you’re still with me, let me provide two options that can transform your business.
A.) The ALG Scenario:
In this scenario, I believe agencies can increase their financial compensation by moving more customers to ALG properties. Those “new” customers can be either Mark Travel clients or other “in house” clients such as cruise clients, etc…
Shifting business and putting more heads in ALG beds, of course, will require compensation to your agency. This could occur in the form of:
· Overrides
· Back end bonuses
· Exclusive discounts…
· And access to inventory
The more you can produce, the more of the aforementioned items you can demand.
By moving your business, you have the potential to increase your income with virtually NO outside expense and very little up-front work. Think about that!
Right now, you have the opportunity to pick up the phone and get a meeting with your regional BDM (Business Development Manager) and cut a deal. If you haven’t done this yet…why not?
Perhaps you are thinking of a different approach? And that leads us to option B — you start working with hotels.
B.) The Hotel Scenario:
I’m assuming you are an agency that has worked with brands such as Iberostar, Riu, Excellence, Karisma, etc… Most of the owners and managers I know working with these brands do not get much in co-op dollars — relative to the tour operators. But the game is changing. Agencies can cut deals to work with chains in a new way that could lead to more revenue and an increase in marketing dollars. Here’s why…
Now that this merger is completed, what are these chains going to do to ensure occupancy rates? Do they really think it will be business as usual going forward?
Maybe…in the short run. But in the long run…no way!
Smart operations, I’m sure, are already looking at different scenarios. They are already asking themselves: What if things don’t stay the same? What if the business starts to taper off? And what if something terrible happens and travel takes a big spin downwards…will ALG be looking to help me out or fill their own hotels first?
Hotels will need support filling their rooms. So, agencies should be reaching out to these chains to find out what they can get if they shift business their way. In exchange for sending more customers to them, travel agencies can ask for special deals, additional commissions, volume bonuses, access to inventory and preferred treatment to the clients they send to these properties.
With this option, hotels can keep occupancy rates where they need them to be. And agencies win because they can find new revenue sources without the need of any marketing and advertising dollars.
Now, there is one more scenario and this one combines both A and B. This is for the gangster agencies out there.
In this option an agency can shift business to ALG and can also work with hotel chains to get more marketing dollars that will deliver new customers they can then send back to their hotel partners. This scenario will require additional marketing investment to draw new customers in…but if that agency can minimize out of pocket costs by leveraging OPM (Other People’s Money) the numbers could definitely work in your favor.
Regardless of the scenario you elect to pursue, there has never ever been market conditions so favorable for agencies. I’ve been in the travel game a long time and have never seen anything like what is unfolding before us.
What should make this opportunity even more appealing is the level of risk involved with pursuing either option. With many high reward scenarios there is also an equal level of risk involved. However, in the options I just outlined for you, the level is so low it’s basically non-existent. And yet the upside could be a 5X multiple to your bottom line.
Again, how often do situations like this come along. Rarely.
But there is one concern and that is the window of opportunity.
How long will this be an opportunity. I’m not sure. At the writing of this post we are quickly approaching the month of June. Before too long it will be budgeting season and ALG and hotel suppliers are going to want to have an idea of your anticipated room nights. Additionally, they are going to want to lock in their co-op commitment to you well in advance of peak season 2019. Add to the mix the fact that some agencies may already be taking advantage of this situation and locking-up as much co-op dollars as possible.
Bottom line — if you don’t move on things soon… this opportunity could be gone. Agencies you have leverage right now. Your list of clients and book of business has never been worth more… Use it. The time to strike is now!
If you are an owner/manager reading this. I would love to hear your thoughts and comments on the current state of the business and the new opportunities the merger between ALG and The Mark Travel Corporation has created.
