Mid-Sized Agencies Fight the Squeeze

In a recent article Travel Market Report analyzed ASTA’s latest Agency Profile report, revealing that mid-sized agencies are being squeezed on either end – by smaller, often home-based, agencies with little overhead on one side and by larger agencies with more capital and clout on the other.

TMR asked three mid-sized agencies what strategies they are employing to navigate the crunch. Cost cutting, finding inexpensive ways to market methods, and focusing their time on their best customers are among the successful methods they’ve adopted.

Using the Internet

Pete Fanizzi

When friends ask Pete Fanizzi, owner of Going Places Travel in Staten Island, NY, how he’s doing with all the Internet travel, he said, he tells them: “25,000 people get my e-mail every week, so I’m doing great!”

Fanizzi is no stranger to the Internet. He blogs every week. “I get 100 to 200 hits a day and don’t spend anything to do it.” He said he gets five to 15 requests a day of which two or three might buy, bringing in bookings of $4,000 to $10,000 per day.

“Online is a mixed bag but it accounts for about 20 to 25% of my agency’s bookings. I’m an Internet agency but there is a person behind the Web site.”

To cut down on the cost of marketing, Stephanie Turner, CTC, president and CEO of Brentwood Travel, said her agency is looking more to e-marketing.

In addition, the agency relies on its consortium to do some of its marketing for it.

“They do lots of mailings for us which would take us even more time and money to do on our own and we like our clients to be receiving lots of info from us of all types,” she said.

Old-Fashioned Out-Reach

AZ Trails Travel president Roxanne Boryczki told Travel Market Report that is expanding its marketing efforts with grass roots marketing campaigns.

“I have found in our market, the biggest part of growing the customer base, comes not so much from advertising, as it does from building relationships, working the existing client base, meeting new people and making direct contacts with prospective clients,” she said.

“Grass roots,” as Boryczki terms it, involves lots of networking, socializing and being a part of the local community to build name recognition and awareness. As part of this she has been very active with her local chamber of commerce and has worked with local charity groups to support their auctions and functions.

Additionally, she said she is trying to expand her agency’s geographical area by networking in surrounding communities with the help of some existing clients.

Spending Time Wisely

Boryczki also is reviewing her agency’s marketing database and making adjustments as needed.

“We are weeding out old clients we have not heard from in several years and adding in new clients and prospects who we feel will yield us increased revenues.”

Where you spend your time is important, stressed Fanizzi. Online Q&As help prep clients to buy. “Many people will fill out our form, or e-mail the answers. Then, when they do call, it’s to buy and we know what they want.”

Cutting Expenses

“We have had to make major cuts in expenditure,” Turner said.

Some ways in which Brentwood has cut its expenditures has been to revise the employee payroll structure – all agents are now on a base plus commissions system. All support staff have been eliminated.

“For the first time in 30-plus years I have no assistant, so am doing major multi-tasking,” she added. 

This is both good and bad for Turner. It’s good, she said, because she is back to doing individual bookings, which she had gotten away from. But it’s also bad, because too much multi-tasking risks something being forgotten, plus Turner doesn’t have much time to think creatively anymore, which she said is essential to success.

Fanizzi too has reorganized his staffing. “I run the business with six commission-only independents. It’s a sales business. Do I teach them and give them ideas? And I’m doing as much as when I had six full time agents. But if I have a bad time, it’s on me.”

“I have to generate sales and it works for the agents. Two people have been with me for 14 years. One came back after 10 years and may generate six figures this year,” he said.

For AZ Trails Travel, one major cost cutting tactic was to downsize the agency’s office space, and negotiate “a much more favorable lease in a higher visibility, higher traffic area,” said Boryczki.

Location is important to Fanizzi as well. Being in an office building with financial companies, attorneys and business enhances his crediblity. “In this market, I don’t need to be a top-selling agent; I need to be reputable. People 40+ are still not going to pay $5,000 on line; they want someone they trust.”

Working with Suppliers

AZ Trails Travel has expanded its product range and services, as well as sales for ancillary products.

Fanizzi said that he’s although not a giant, some supplier reps do more than ask for his business. “I ask ‘How much will you give me to promote you? Globus stepped up and I now do six figures with them. When reps ask me ‘What makes me want to promote you over anyone else?’ I respond: Why do I want to sell you?”

Fanizzi said he negotiates with suppliers when he sees their pricing undercut online. “The typical agent takes the price offered. I make it clear that “Expedia has this price, I need it too,” he said.

Most important, emphasized Fanizzi, “I’ve realized that the most important person in my business has nothing to do with the supplier. It is each person who books a trip with me.”