Got ostrich?

From the Window Seat

By Arnie Weissmann

ArnieMy friend was explaining what he thought were the worst sort of new business ideas when he paused, trying to think of an example.

"Ostrich meat," he finally said. "Look, it's difficult enough to start a business that responds successfully to existing demands for beef, chicken, pork or fish. So why raise the bar for yourself by trying to market something you have to spend time convincing people to even try? Why add the burden of having to create demand?"

When I was first contacted by Bernie Kanstoroom about his business idea, I thought, "ostrich meat." Kanstoroom sent me a thick document making the case that travel agents ought to sell passage on luxury cruise ships as transportation to business travelers, who could then either expense the cost or take a tax deduction.

Passage on the Queen Mary 2 from New York to London, he pointed out, can be booked for no more than the cost of business-class airfare between those points. Further, because the cabin costs the same for two people as for one, a spouse could come along on what essentially becomes a "free" vacation.

This struck me as a difficult sell. First, it seemed too good to be true (would the IRS really allow this?). And even if it were true, travelers would have to convince their companies' accounting departments that luxury cruises should indeed be recognized as legitimate business expenses.

The fact that Kanstoroom said he was a lawyer lent some credibility to his assertions, and his website (www.businesstravelonly.com) appeared authoritative. So I phoned him to try to better understand the opportunity and the challenges.

Kanstoroom was refreshingly candid and not in the least discouraged about the difficulties he faced. "It's going slowly," he conceded. "It's not easy marketing a product that the consumer doesn't know exists."

But his challenge was mitigated somewhat by his attitude: "I do what I choose to do because it interests me. I'm 69 years old, I've been financially retired for more than a decade, and I love doing something that no one else is doing."

Kanstoroom's target market is the 10 million-plus travelers who take an average of 4.5 business trips per year. "If they took just one of those using a cruise ship as transportation, they could legitimately incorporate a vacation into a business trip. This is a terrific opportunity for travelers and travel agents."

He said he had been working on the idea for three-and-a-half years and had approached cruise lines first. "None had any idea about the potential for tax-deductible business travel by ship," he said. "Some thought it must be a scam."

But even after they were convinced it was legitimate, they said they wouldn't help promote it. "By and large, they don't pay U.S. taxes, and the last thing they want to do is draw the attention of the IRS by promoting something that has tax ramifications," he said.

Kanstoroom also came to understand that this was not necessarily an attractive proposition to typical brick-and-mortar agents, who would have to spend time learning to market a new concept. "They're busy enough," he concluded.

But slowly, he honed a strategy that he believes will work. "Lawyers have never met a travel deduction they didn't like," he said. "Continuing-education legal seminars are held in Vail in ski season, or Cancun or the Caribbean in winter. And they are legitimate business expenses."

So Kanstoroom added a component to his business that has pleasing symmetry. He produces legal seminars in attractive locations and then sells cruise transportation to get to them. On Dec. 3, he'll be holding a seminar in Fort Lauderdale. The next day attendees will board the Silver Shadow and cruise to Barbados, where they'll attend another seminar.

To sell the seminar, he has created a script so agents can leave a voice message for lawyers to promote a seminar on "the art of rainmaking -- how to be more profitable, more successful -- combined with the ability to travel on the world's most luxurious ships, tax-deductible." (Interestingly, seminars held on a cruise ship are not tax-deductible; Kanstoroom's business is called Seminars by Sea, not at Sea.)

By marketing to lawyers, Kanstoroom believes he gets around concerns about the validity of the program, because his potential clients will be sophisticated enough to understand it's a legitimate offer.

Kanstoroom is targeting home agents as his sales force, with the actual passage booked through a host agency. His plan sounds economically plausible: He assumes a 1% response rate, a 0.5% close rate and a 10% commission to agents. If each agent left 200 voice mail messages a week that produced one closed sale in the $5,000-to-$10,000 range, he or she could make $26,000 to $52,000 a year. (The average annual agent income is $28,785, according to ASTA.)

"There's not a lot of excitement making 200 phone calls or writing letters or sending out postcards," he said. "But it's a way for home agents to break into the luxury market. They could sell other luxury travel to that client."

Toward the end of our conversation, Kanstoroom said: "I never wanted to be a businessman. I saw myself as a consultant and an educator. It ultimately doesn't matter to me if there won't be a lot at the bottom line; I get a lot of satisfaction out of this. And I've met a lot of wonderful people in the travel industry."

In general, I subscribe to the belief that if you do what you love, the money will follow. I honestly don't know whether Bernie Kanstoroom is working to sell ostrich meat or is on the verge of introducing the travel equivalent of sushi. (Who would have thought Americans would become so enamored of raw fish wrapped in seaweed?)

Sushi or ostrich, ultimately the outcome will be determined by one thing: The number of hungry travel agents out there.

Email Arnie Weissmann at aweissmann@travelweekly.com.

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