Travel Agents Calculate ROI of Their Brick-and-Mortar Offices

by Cheryl Rosen
Travel Agents Calculate ROI of Their Brick-and-Mortar Offices

Photo: Shutterstock.com


Think brick-and-mortar travel agencies are dead? Nickell Beach would beg to differ. She opened her agency in Lehi, Utah on July 25. There’s also a new travel agency in Fort Hood, Texas; and one in Plano, Texas; and two new ones in Florida.

At the recent Nexion conference, president Jackie Friedman noted “a resurgence of brick-and-mortar agencies” as a trend for 2018.

It’s not for everyone, and it requires a combination of hard work, low rent, foot traffic, patience, and luck to succeed. But a recent panel of travel agents talked about how they are building their storefront businesses, brick by brick.

Mike Ziegenbalg of Dream Vacations, who last month was named the CruiseOne/Dream Vacations Agent of the Year, is not surprised. His three-year-old storefront in a Jasper, Georgia, strip mall, is “just 246 square feet, but it serves me well,” he said. In an industry where “it’s important to have a niche, I found a niche in my own neighborhood.”

Living in an adult community where people have the time and financial wherewithal to travel, he still was careful about how he grew his business. Rather than a hard sell, he offered to do an educational enrichment program for the community, positioning himself as an expert rather than a salesman. This year, for example, he wrapped up his winning season with a “huge Europe Night,” for which he invited in suppliers to talk about their destinations — and drew 150 existing and potential customers.

Then he tops off his expertise with a unique value-add. Rather than rebates or cash back or gifts for his customer base, he offers free rides to Atlanta airport, 40 miles away.

And Ziegenbalg is not alone. On a panel with three other agents at the CruiseOne/Dream Vacations/Cruises Inc. annual conference last month, he shared some pros and cons of the brick-and-mortar office experience.

Location, location, location. And a little luck.
In Northampton, Pennsylvania, Richard Butz has “a free-standing brick building with a nice parking lot,” where he books mostly groups and FIT bookings through his CruiseOne franchise. He is blessed with having a stoplight outside his office, where the cars back up “20 deep all day long,” forcing passersby to stare at his car wrap and billboard until the light turns green.

Karen Coleman Ostrov lives in Gilbert, Arizona, “the fastest-growing town in America,” where her office “is on the main drag.”

And Sharon Hunt, in Attleboro, Massachusetts, shares an office with a massage therapist, a real estate agent and an accountant, each of whom refers her to their respective clients, as she does hers to them.

“I got lucky. I kind of fell into my storefront, when an acquaintance said she had these extra offices and would I like to sublease one for $200 a month,” Hunt said. “Eventually I moved to a suite and now she leases from me.”

The four panelists all agreed that the main benefit of a physical office is legitimacy. Also a necessity is patience — or a really good deal on the rent.

“Legitimacy is a prime factor, but also I do a lot of higher-end luxury cruises, and when they are plopping down a few thousand dollars, people like to talk to you and see a brochure,” Gilbert said. Her office is also small, only 250 square feet, but rent is just $500 with utilities.

“I’d say it took two years for it to become self-sufficient,” Butz said. “It was the $499 and the $599, and I was getting very discouraged. They have to feel you out and see if you are going to last, if you build a reputation. But now I’m starting to get more people coming in, a few family reunions, and it’s starting to be a good idea.”

Hunt’s office, on a main street with plenty of parking, has a great conference space and kitchen area, so she can hold Cruise Nights to bring in returning and new customers, and street traffic as “people drive by and jog by.” An Enterprise car rental office down the block helps generate foot traffic, and she offsets her $1,150 a month rent by subletting space.

The wear and tear of the daily grind
Besides the rent, the four agreed that the biggest drawback is the requirement of being physically present for set hours every week. Hunt is in the office from 10 to 5 most days, until 7 on Wednesdays, and on Saturdays. Gilbert at first worked from 9 to 6, but has cut back to 10 to 4, when almost every customer would come by, and by appointment on weekends.

After trying to stagger her hours to have a morning off here and there, and many days of going without lunch because a customer unexpectedly walked in, Hunt just decided “it doesn’t look professional if you are closed,” and took on an associate to help with coverage.

Concerned about having to miss ship tours, FAM trips and educational programs to be in the office —and finding that even answering the phone when there was a customer in the office became an issue — Coleman Ostrov did the same.

Ziegenbalg, meanwhile, likes the discipline that daily hours require, as well as “the idea of having someone there to answer the phone when I’m away.”

ROI matters
Of course, the four agents would not have offices unless they found them to deliver positive financial returns.

Butz keeps a careful tally of the black and red ink, and finds that “some months we are way ahead; January and February, not so much.” For those considering a move to an office, he suggested putting a whole year’s worth of expenses aside in advance, as he did. “It’s a risk, but in business everything is a risk.” he said.

And then there was the time “a guy walks in and wants three cabins on a Regent cruise to Alaska, and I make a $48,000 sale in 30 minutes,” Butz said. For Coleman Ostrov, the best was an elderly gent who wanted an anniversary cruise for his wife and handed over a $12,000 cash. “I asked him to please go get a cashier check from the bank and he did,” Coleman Ostrov said.

She also said that when the opportunity came along to get the space at a great price, she took the money from her marketing budget.

For the audience at the CruiseOne/Dream Vacations/Cruises Inc. conference, the big question was what do agents do if the customer asks a question to which they do not know the answer. Just as you would with any phone call, pre-qualify customers that call for an appointment as much as possible, so you can prepare for them before they come into the office, the panel said. Then give them brochures and say you will research it and get back to them.

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