Hotel Blogs

The "long tail" is a buzzword that's gaining a lot of, well, buzz thanks to the bestselling book of the same name by Chris Anderson.

But what is it and how does it apply to the travel distribution business?

The long tail is another way of envisioning the 80/20 Rule. You know, 80 percent of your business will come from 20 percent of your customers. 80 percent of the work done in an office is done by 20 percent of the employees. That sort of thing. It's not an exact rule but it works 80 percent of the time and the other 20 percent, it doesn't work, which just tends to prove the rule.

Now if you plot this phenomenon on a graph, you will wind up with something that looks like this:

That section trailing off to the right, representing the 80 percent, looks like a "long tail" and is the source of the term.

The 80/20 rule is useful because it tells a business to concentrate its efforts on the 20 percent of whatever that is producing the results. For a travel agent, that would mean spending more time cultivating the 20 percent of your client list that produces the most income. For a travel supplier, it would mean paying attention to the 20 percent of travel agencies that produce the most bookings.

The downside of this approach is that it completely ignores the source of 80 percent of your business, the long tail. But that was okay because that 80 percent came in dribs and drabs from many, many different sources. The cost of addressing this large group was cost-prohibitive. Put another way, it would cost more to market to that 80 percent than you'd make back in additional income.

The Internet changed that. Now it is increasingly easy and relatively inexpensive to reach the long tail. The classic example cited is Amazon.com, which derives a huge percentage of its income from onesy-twosy sales of obscure books, not from the best-sellers that sell thousands of copies.

In the travel distribution system, home-based travel agents (and other small storefront agencies) are the long tail. Each agent may make only a handful of bookings a year compared to the mega-agencies, but together they can account for a big chunk of travel booked.

And that is why travel suppliers should (and increasingly are) paying attention to home-based travel agents.

My personal feeling (based on fragmentary data, I'll admit) is that the home-based travel agent channel is under-appreciated by the supplier community, with some honorable exceptions. Much more can be done to unleash the potential of this large and growing reservoir of agents and I hope to have more to say on that score in the weeks to come.

That's the topic for a panel discussion I'll be joining at the Home-Based Travel Agent Show and Conference in Atlantic City, NJ, from October 29 to 31, at the Taj Mahal.

Also on the panel will be my old friend Peter Stilphen, President of PATH. The moderator will be Anita Pagliasso, OSSN's Western region coordinator.

The session will be on Monday, October 29th at 12:30 p.m. in Grand Ballroom A (where else?). Hope to see you there.

I'm looking forward to this. It should be a good discussion. There are good reasons for taking each route and my guess is that we won't be able to definitively answer the question for everybody, but that we'll be able to give participants plenty of ideas for them to sort through and come to the decision that's right for them.

(Photo: Festiva Sailing Vacations)

I had a great time last night interviewing Mike Pauer of Festiva Sailing Vacations. Festiva has what sounds like a terrific product: six-passenger, luxury yacht cruises to unspoiled and little-visited Caribbean isles aboard stable 44 foot catamarans, complete with captain and chef.

They are just now reaching out to the travel agent community and home-based travel agents have a great opportunity to take a leadership position in promoting this offering. What makes this especially attractive, IMHO, in addition to the destinations (which are mouth-watering) is the net pricing structure. I'm rounding amounts here for simplicity's sake, but it goes something like this:

You can get net rates of $3,000 per two-person cabin. During low seasons, those cabins retail for $4,000 and for $5,000 during high season.

Let's say you want to go yourself (I sure do!). You book a whole boat (there are plenty to choose from) for $9,000 for a high season cruise. Now you find two friends or good clients. If you sell two cabins for $5,000, you and your spouse sail free and put $1,000 in your pocket. If you offer an incredible discount of $1,000 (say as a 'thank you' for those valued clients), you, in effect, take a $5,000 trip for $1,000. Still a pretty good deal. If you offer a $500 discount, you break even, an even better deal.

With the first-hand experience and product knowledge you will gain on this first trip, you will (assuming you love the experience) be able to sell the product like hotcakes when you return.

Next time you book the whole boat, you can sell all three cabins for $5,000 each and earn $6,000!

You can listen to the complete teleseminar. You can also download it at that link to listen to on your iPod. And if you're excited by the possibilities, you can sign up for a working relationship with Festiva.

Travel Research Online has sent out an email with its reaction to the RCL announcement.

It is time for the associations of the industry to begin to consider a very serious effort to self-police the definition, training and ongoing education of travel agents. Two very good reasons for undertaking these efforts immediately are evident:

The latest spate of card mill type operations will go away, only to be replaced by some other aberration that will manage to sidestep the emerging attitude by suppliers. Further, not all suppliers will deem it in their best interests not to deal with card mills. Until a clear, enforceable definition of "travel agent" exists nationally, some new permutation of the card mill will emerge on a regular basis.

If the trade does not take up the cause, it will come from some other direction. Eventually some consumer group will insist on standards and the legislation will happen without the type of initial input that will best serve the travel agency community. Standards will affect everyone in the industry and will not be without burdens of their own, such as continuing commitments to education and training. In the past, legislation developed without agent input has focused on the wrong issues, requiring agents to post bonds rather than to enhance professionalism. Most card mills could more easily post bonds than the average travel agency or agent. The trade needs to take the initiative to control its own destiny.

A few observations:

First of all, the travel industry has been attempting to "self-police" this area for over a decade! All too often, these efforts have devolved into shouting matches between agents over who's more "real" than the other. Basta! Let's not encourage more of that, please.

Organizations like OSSN have done an excellent job of raising and defining standards, as well as providing support and educational opportunities for the home-based travel agent community. Indeed, the RCL statement specifically mentions OSSN's accreditation as a marker of agent professionalism!

The spectre of legislation is abhorrent. Existing legislation has done nothing -- zero, zilch, nada -- to either promote professionalism or protect the consumer. The typical model for legislation is the California Sellers of Travel law which levies a tax (although it's not called that) on travel agencies and uses the proceeds to reimburse victims of fraud. In essence, honest travel agents are penalized while the state lets the criminals go free, because after all the consumer has been reimbursed. Meanwhile, the politicians can brag to their constituents that they're "protecting" them. Again, OSSN has done immensely more to enhance professionalism in this sector than any politician ever will. I'd also like to think I've made my own modest contribution by teaching new agents how the industry really works.

And asking legislatures to ban card mills is a fool's errand. It's been tried and failed for the simple reason that (apparently) what card mills do is perfectly legal. Just like pornography. Offensive to some, unethical perhaps, but legal.

Asking suppliers to follow RCL's lead may be laudable, but it is not in and of itself a solution. As TRO notes, not all suppliers will rebuke so-called card mills. Why? Because they can produce significant volume. Most holders of these cards book their travel at going rates and the suppliers pay the normal commissions. It's a booking just like any other.

As to the "travel agent rates" these card holder get, in most cases they are getting the same discounts with their $495 ID card that they could have received by joining a $50 travel club. My observation has been that the super-duper "agent-only" rates touted by card mill agencies are the result of group discounts negotiated based on their volume with the cruise line. The suppliers know this, even if the ID card holders (and many industry observers, it seems) don't seem to get it.

And even if the holder of a "phony" ID card gets on a "real" fam cruise, they are paying something for a cabin that otherwise would have sailed empty. And they drink and gamble and shop while aboard and buy shore excursions. I know, because I've watched them do it! So the cruise lines are making money on the deal at a minuscule increase in marginal cost.

And while it may happen, I doubt that there are many "true" fam trips (which I define as those that are either free to the agent or at a truly minimal cost) that are offered to agents who are not producing volume.

The only sure-fire way to end card mills once and for is for the accrediting agencies like ARC, IATA, and IATAN to stop accrediting them. It would seem to be a simple matter for them to establish additional requirements (like ARC's now quaint requirement that a travel agency have a safe of such-and-such a level of security) in order to be accredited. Those additional requirements could include not operating a card mill or providing ticketing to a non-travel-agency company that does. End of problem.

But these agencies have, for reasons that remain obscure, decided not to do that. Unless and until they do, suggesting that travel agents continue to wage internecine warfare on one another is, in my opinion, not productive. Let us not forget that mnay people who sign on with card mills do so with a sincere interest in becoming travel agents, albeit with a misguided understanding that this is the way to go aboiut it.

Here's a free idea: Why don't the cruise lines institute a special seminar for card mill card holders who go on their fams? "Oh, you're with Agency X? Then you'll be very interested in the exclusive seminar we have for you! We'll be serving shrimp!"

In these educational sessions, the cruise lines sales reps can show these people what a rotten commission deal they are getting from their current agency and how easy it is to earn real commissions. They could offer them a commission incentive if they put down a binder on group space -- that'll separate the wheat from the chaff! Perhaps they could do so in concert with PATH host agencies, who ideally would make it very economical for these agents to make the switch.

That's the word from Forrester, a high-falutin' research outfit.

The whole report costs a whopping $279 (although you do get instant access), but here's the Executive Summary (emphasis added):

The number of US leisure travel Bookers — online travelers who use the Internet to both research and buy travel — fell 9% from 2005 to 2007. Fortunately, thanks to the overall growth of the online population and the increase in the number of trips that the remaining Bookers take, as well as the amount of money they spend on travel, online leisure travel spending has increased 41% in three years. What we're seeing is an early warning signal: Fix the problem, or else. To keep online consumers interested in online booking, travel companies need to overhaul their systems to sell the way people want to buy. They must proactively destroy — and then rebuild — their products to be more practical to sell online and humanize the digital experience that they offer on their Web sites.

So much for all that talk about how the Internet is going to put travel agents out of business!

This doesn't surprise me because I've been predicting something similar for a while now. The example I like to use is a doctor friend who made an extremely good living and yet he'd spend hours online trying to shave five bucks off an airfare. Why? Well, perhaps because the Internet is a novelty and there is something fun about the process of trying to "game the system."

I then like to point to a PBS documentary about the first transcontinental auto trip in 1903. The guy who did it suffered an unbelievable number of hassles and whenever the car broke down (which it did frequently and often far from anything resembling a garage), he had to crawl under the vehicle in the mud and fix it himself. He was a doctor, too! And the automobile was the must-have, gee-whiz gizmo of its day. Can you imagine any doctor today repairing his own car?

So it's not surprising that, as the novelty wears off, more and more people who can afford to travel (which almost by definition means people who are relatively well off) are finding better uses for their time.

I'd also like to mention that "humanize the digital experience" is an oxymoron.

You can make a digital experience flashier, easier, or quicker, but you can't make it "human." There's only one way to humanize an experience and that's with a human being. And I can't help pointing out that home-based travel agents are human.

(Although there was one agent I bumped into at the seafood buffet on that last cruise . . .)

Here's an excerpt from an interesting (to say the least!) letter that Royal Caribbean Cruise Lines is sending to its travel partners.

We are writing to provide you with important information regarding the new manner in which we will be dealing with certain travel-related business practices.

Royal Caribbean International®, Celebrity Cruises® and Azamara CruisesSM have begun terminating our business relationships with certain travel-related companies that we have concluded are in the "card-mill" business (selling ordinary consumers access to benefits designed for actual travel agents). We have a fundamental concern with the business practices of these companies.

I have been writing about this practice for well over ten years and devote considerable attention to the issue in my travel agent course.

While the traditional travel agent community has been vocal in opposing the practice of issuing ID cards to anyone willing to pay for them, other segments of the industry, such as ARC, IATA and IATAN which could effectively put so-called card mills out of business should they wish to do so, have not taken action.

The fact that these companies have not been prohibited by the authorities, despite lawsuits and other attempts to shut them down, leads me to the conclusion that, whatever you may think of so-called card mills, they are legal.

The key to ending card mills rests with the suppliers. But have suppliers been not particularly keen on policing their own fam and discount policies. Yes, airlines will not "honor" such cards for upgrades and such, but airlines don't honor much of anything these days. RCL's initiative could change that.

It will be interesting to see how this plays out in the travel trade press over the coming weeks and whether or not RCL's stance will "go viral" within the ranks of travel suppliers. If it does, the business of model of more than a few host agencies will become effectively obsolete, although I suspect they will not immediately fold their tents and slink off. Most agencies that use the referral agent model (a nicer way of saying "card mill") have long had fine print that counsels their agents that industry benefits are at the discretion of the supplier and instructs their agents not to complain if their request for a discount is denied.

It would also be interesting to know exactly which companies RCL has in mind (the letter doesn't say). I suspect that they will not take action against all the host agencies that critics label as card mills. Some of them produce significant volume for the cruise lines, even if most of the bookings are for their own agents.

One of the closely guarded secrets of the referral agencies is that the cruise "fams" they offer to their agents are often not especially good deals. Cheap, yes. But the cruise lines are often charging the agents in question the same price they'd give to virtually any group of that size. In other words, if all you're interested in is a bargain, with a little smart shopping you can get the same deal without shelling out money for an ID card.

Then, too, there will always be suppliers who will provide discounts, knowingly or otherwise. My guess is that people who acquire these cards will still get "travel agent rates" at hotels without ever knowing what the actual travel agent rate is or that they could have gotten exactly the same rate by flashing their AAA card. And, of course, there are still hotel desk clerks who cannot tell a real IATAN card from a lookalike.

I also think it's important to note that this action by RCL, even if copied by other cruise lines and tour operators, will not do anything to stem the growth of the home-based travel agent sector. If anything, it will help us grow both in numbers and professionalism.

It is astonishingly easy to meet the minimum requirements to be taken seriously by the travel industry. Not only that, but doing so often costs less than the price of those ID cards! It is only slightly more difficult to start earning significant income by producing actual bookings for suppliers, including RCL, who are more than happy to extend industry courtesies to their actual "partners." In fact, I will be going on an RCL fam cruise to Bermuda in a few short weeks!

If you are reading this because you are interested in becoming a home-based travel agent, I urge you to educate yourself by signing up for my free six-part mini-course for wannabe home-based travel agents (scroll down when you get there). And while you're there, sign up for my equally free bi-weekly newsletter.

There's a new cruise line going after the small ship luxury niche. Pearl Seas Cruises is a new CLIA member with a fleet consisting of a single, still-unbuilt ship and an ambitious schedule of 7 to 15-day cruises in the Canadian Maritimes and the Caribbean.

The first sailing is scheduled for August of 2008 and they are hoping to lure upscale cruises willing to take a chance on an unproved line with a discount of $600 off staterooms booked in October. The message I received was bit confusing on this point. The large type says they are offering the deal to "clients of CLIA travel agents that make reservations on October 17th, 2007," which coincides with CLIA's "World's Largest Cruise Night" promotion. But an asterisk directs your attention to a footnote that says, "This offer will be valid October 15 – October 30, 2007." Note that this offer is for CLIA agents only, apparently.

$600 seems like a nice sweetener until you notice that the least expensive cabin on the shortest itinerary goes for roughly $8,000. A couple booking the best cabin on the longest itinerary would be getting about 3% off. Seems to me like they could have dug a little deeper and at least come up with a nice round number like $1,000.

The quibbles of a cheapskate aside, this looks like a line with a good bit of upside potential. Here's what their press release (PDF) has to say:

[T]hese ships will offer the intimacy and service expected on a small deluxe cruise ship while also affording all of the modern amenities of a larger cruise ship. . . The ships have been designed with the most innovative advanced designs including state of the art technologies and modern amenities: including a spa, elevators to all six decks, Internet access throughout the ship, and oversized suites all with private verandas and large opening picture windows offering spectacular views. . . The ship is fully stabilized, and meets the newest and most stringent safety and environmental standards. The atmosphere is relaxing and inviting, much like that of a fine private club, offering “Luxury Adventure™” with every cruise experience.

If you have well-heeled clients who like to be the first to sample the "next big thing," you might want to take a look. The maiden voyage is to the Canadian Maritimes. Personally, I'd wait for the Caribbean cruises in the Fall, to give them a chance to work out the kinks. I've heard far too many first voyage horror stories. Still, that maiden voyage mystique has its adherents.

A recent study has shown that so-called rich media, like 360-degree views of hotel rooms, increases online bookings.

The results of the study confirm that viewing rich media significantly increases the likelihood of a booking. Overall, consumers who viewed an Omni hotel’s rich media were 67% more likely to book than those who did not. Importantly, the richer the media viewed by the consumer, the higher the impact on look-to-book conversion rates. The increase in conversion rate for consumers who viewed a hotel video was 2.9 times that for consumers who only viewed virtual tours. The increase was even greater (3.6 times) for consumers who viewed both virtual tours and video. Interestingly, there was no material difference in the effectiveness of full-motion videos and VFM’s more cost effective photomontage videos.

VFM is VFM Interactive, a company that specializes in producing rich media for hotels and which conducted the study. Given VFM's vested interests here, perhaps it is wise to take the results with a grain of salt. Yet, the results do make intuitive sense.

So what does this portend for home-based travel agents? Alarmists might think that all this means is more bookings slipping away to the dreaded Internet. But I see an opportunity as well.

Given the increased ease of "embedding" video in web sites (think YouTube) and the low cost of entry for home-based travel agents creating their own web sites, I see no reason why home-basers can't harness this new technology for thier own use.

For example, say you're promoting a cruise on Cruise Line X. Why not have a video tour of the ship on your site? Or a 360-degreee shot of the balcony suites you're pushing?

This video can come from two sources: you or the cruise line.

Cheap digital video technology and equally affordable video editing software has turned millions (or at least many thousands) of people into Steven Spielbergs). And it's easy to get your home-cooked video online. Again, think YouTube and similar services that are now mushrooming on the 'Net. And what a great reason to take another fam trip!

Video produced by the cruise line will have the advantage of being slicker. Creating those 360-degree views, for example.

I see no reason why a cruise line would not let one of its "partners" use this material. Talk to your RSM about how to make this happen.

The nifty little blog The Tourism and Hospitality Diaries has an extremely helpful rundown on the latest wrinkle in 'Web 2.0" as it applies to the travel industry.

With the discussion raging about Web 2.0 applications in the hospitality, travel & tourism industry (with hotels slowing catching on), the subject of much enthusiasm in the Travel 2.0 game now seems to be Video! Moving beyond the original Travel 2.0 phenomenon (e.g.TripAdvisor, which now features over 6 million user reviews on hotels, destinations and local attractions), new sites are now focusing on the logical next step...combining reviews & ratings with videos of the actual hotel product.

Here are some of the sites T&HD tracked down. (Quotes are from that blog):

Trivop. "One of the early pioneers of the hotel video review revolution."

TVTrip. "Tvtrip.com is based in Paris and Brussels, and claims to work with a wide range of travel experts world-wide and are developing new, advanced functions that will allow users to set their own preferences plus also share videos."

Travelistic. "The site hosts all kinds of travel videos, including user uploads, professional content, and tourist board videos. "

TravelerVideos. "Claims to be the internet’s largest human indexed traveler video directory."

Many more sites are linked from the original article, which is worth reading in full.

These sites and others like them are excellent research tools for the home-based travel agent. They will let you talk with a certain "been-there-done-that" assurance that you otherwise might not be able to summon up.

But be careful! The usual caveats about the reliability of what you read on the Internet apply. Glowing reviews can be posted by "sock puppets" for the property in questions. Likewise, slams can be the work of competitors.

Of course, video doesn't lie.

Or can it?

I am indebted to Joe Sharkey of the New York Times for this little statistic:

Business travel accounts for about $165 billion of the roughly $700 billion spent each year on domestic travel.

Now, if my math is correct, that means that $535 billion -- that's billion, with a "B" -- is spent each year on NON-business travel, a.k.a. leisure travel, the kind home-based travel agents sell. Remember, too, that we're talking domestic travel here. International travel is a whole other multi-billion-dollar ball of wax.

So what's the point?

Simply that people are always trying to "prove" that home-based travel agents can't make money. For a while it was the Internet that was going to kill us off. And yet the home-based sector is the most vibrant and fastest growing segment of the travel distribution system.

Now some people are pointing to the slide of the dollar against major currencies like the pound and the euro. (Heck, the slide of the dollar against all currencies.)

"Looks like people aren't going to be traveling as much," they'll tell you, perhaps with a self-satisfied smirk.

Rubbish! Sure, some people will look at the exchange rate and cross that European trip off their list. But many more will dig a little deeper to make that special trip happen. Then, too, foreign governments (unlike our own) recognize the value of foreign visitors and will take step to make trips more affordable for newly impoversished Americans.

And let us not forget that, for the top ten percent or so of the U.S. population, the recent decline of the dollar and the resulting rise in the cost of foreign travel represents the merest pin prick. And the top ten percent represents 35 million people! That's a pretty big market.

But more to the point, the statistic cited above refers to purely domestic travel, where the dollar's weakness simply doesn't apply. Just because some people may decide that Europe's too expensive doesn't mean they're going to deny themselves or their family a vacation this year. They just become part of that $535 billion chunk of the the domestic leisure travel market. How big a slice of a $535 billion market would you need to be happy? I'll save you from doing the math by simply pointing out that, in percentage terms, it's teensy-weensy, itty-bitty.

Finally, what goes up must come down. Eventually, our free-spending, fiscally irresponsible government, which seems to have abandoned all the laws of financial physics that apply to real people, will come to its senses. Or the people will come to theirs and "throw the bums out." When fiscal sanity once again reigns in the land, the dollar will become the strong currency it once was.

So, please, no griping and no whining. And when "well-meaning" friends try to commiserate with you about how impossible it's going to be for you to make a buck, just remind yourself that some people, who will never have the guts to create their own business, try to make themselves feel better by trying to tear down those who do.

A while back, I wrote about a web site that serves as a clearing house for brochures from a variety of travel suppliers. I said, I'd test out the service.

Well today I came home to find a hefty parcel sitting on my doorstep, just ten days after ordering. Not too shabby. I'm kicking off my shoes and settling in for a good read.

For more information or to order your own set of brochures, from Travelpromotionsclick here. Seems like it's a service home-based travel agents should know about.

If you are a home-based travel agent with an interest in ecotourism, you might want to take a look at the (mercifully short) Statement on Ecotourism released by The International Ecotourism Society (TIES).

The global ecotourism community has experienced significant growth since 2002, and is continuously evolving. In light of the various changes in the tourism industry in recent years, ecotourism today faces many new opportunities and challenges.

Ecotourism is, indeed, a rapidly expanding niche and overlaps with a number of other tourism specialties including soft adventure travel, cultural tourism, and nature travel. While ecotoruism emphasizes low impact on the environment, travel agents who seek to capitalize on this trend can see significant impact on their bottom lines.

(Image Travelpromotions.com)

There's a site that lets you order supplier brochures by the dozen.

It offers a grab bag of suppliers, pretty much covering the globe, some well known, others less so. You can browse the available brochures by destination and order single copies or small quantities, which vary by supplier. There are two "Easy-Order" options that let you get a single copy of every brochure (30 total) or a box with the maximum number of each brochure.

I'm not sure how useful this service is, other than to give the participating suppliers the feeling that their message is getting out there. I suspect the system results in a lot of wasted brochures going out to the travel agent version of tirekickers.

Still, if they have what you're looking for or need, it might be something worth looking at. It's also, I suppose, one way to do some scatter shot research into what's available if you're a beginning home-based travel agent.

As far as I could tell, there are no strings attached and the service is free. I placed an order to test it out and will report back

As cell phone technology becomes ever more ubiquitous and more travelers are seeking the convenience of ready communication even when far from home, home-based travel agents should try to get a little more conversant with the technology.

For the technically impaired (myself included!) this online cell phone glossary should prove helpful.

It is also possible to sell telecommunications services for zero investment, something home-based agents should consider as an easy way to increase sales profits.

(Photo:: Turtle Island)

I try to remind would-be home-based travel agents that getting into the business doesn't mean your whole life is going to be just like those pretty pictures in the brochures. And yet . . .

The simple fact of the matter is that, when I am giving seminars and I ask how many people got into the business because they love to travel, every hand in the room shoots up. And when you look at pictures like the one above, is it any wonder?

This lovely little bit of paradise comes to us courtesy of Turtle Island a luxury resort in Fiji. They contacted me to remind me that a 7-day booking there can put $1,200 to $1,900 commission dollars in my pocket. Yours, too, for that matter, if you book luxury resorts.

Needless to say, I immediately wasted invested a half hour clicking around their web site.

It's nicely done. There's a great photo gallery and the resort has an intriguing history. All in all, it looks like the kind of place I'd love to visit. And if I have to send a few of my clients before I can afford to go myself, well that's just how the business works.

The point of this little digression is to point out that it doesn't hurt to dream. My guess is that for most of us, the list of "places to see before I die" is longer than the time alloted to us and the old bank account will allow us to experience. No matter. The striving is all. If sites like Turtle Island fuel your desire to sell more travel, there's no real harm in goofing off a bit.