Whatever happened to the Michigan agent
whose fee structure for air tickets was 10% of the ticket price?
The short answer:
His business, Horne Travel Consulting in Canton, Mich., is
thriving, and that service fee is now 12%.
Charging what is
effectively a commission might sound a little brash, but the agency
founder and owner, Chris Horne, was only 31 when he went to 10% in
and brash works. Horne said his agency, now at $25 million, grows
steadily each year, but not too fast -- just the way he wants it.
In 2003, when Horne described his business to Travel Weekly
("Legal-eagle sees agency take flight,"
March 3, 2003), it was at $18 million. He was CEO then; he is
now chairman, and Christie Mosher is president and CEO.
In 2003, Horne said
he would cap his business at $50 million, but now he amends that to
"possibly" $100 million. The issue is maintaining the personal
service that allows Horne Travel to implement its fee structure, he
The 12% fee covers
hotel and car components. If a client books hotel or car only,
there is a flat fee. Flat fees also apply to refunds and
When Horne pitches
service, he tells prospects his won't be the cheapest offer they'll
see, but he uses a hotel analogy: If you want Ritz-Carlton service,
you don't book a Red Roof. You pay more to get more.
Service is key to
winning and keeping clients, but there is more: The agency
handpicks its prospects. Horne said the agency looks for companies
that "are at the top of their game. They see service as a benefit
they are willing to pay for."
Horne's clients are
scattered around the globe (Dusseldorf, London, Milan, Munich,
Paris, Shanghai and Tokyo as well as Chicago, Dallas, Los Angeles,
New York and San Francisco).
His average client
spends about $3 million per year on travel, the size at which
companies no longer want to handle all their own travel purchasing
and a size at which a full-service agency is a good fit, Horne
said. Having numerous small customers also means the defection of
one cannot hurt the business much.
Horne said the
agency negotiates all the supplier deals for each client and, if
the client wishes, creates custom software so the client's data can
be dropped into its accounting system, avoiding the need for
include online booking, but travelers rarely use it, Horne said,
because they would rather talk to his staff. He said he has "a
great staff, which didn't happen overnight."
So how does Horne
find and keep his agents? He finds most via referrals from existing
staff, though he successfully trained a couple of career changers
with strong business backgrounds. Horne said he attracts and keeps
staff because of:Excellent
benefits. He provides medical, dental, eye and life
insurance coverage at no cost to staff plus 401K matches of 3%
regardless of staff contributions.High
salaries. "Some are at six figures. In fact, quite a few
are," he said.Steady
business growth, which means staffers see their own
full-time personal trainer on staff. The trainer, also a
nutritionist, helps in relieving stress, Horne said.An
attractive and accommodating setup: marble floors, cherry
wood furniture, private offices for everyone, two kitchen areas and
a workout room. (When the agency relocates to larger offices in
Livonia this spring, the workout space will include showers and
lockers, Horne said.)
Horne Travel, founded in 1996, now employs 22, and 96% of the
business is corporate. To grow leisure sales, the agency launched
HTC Vacations a year ago, headed by Lisa Prince,
For leisure, the
air ticket fee is 10%, capped at $50, except for existing corporate
customers, whose fee is capped at $35.
Also, to accelerate
HTC's growth, the agency launched a hosting program.
Horne is a little
miffed at a general perception there is no future in the travel
He is "seriously
considering" starting a travel school to show there is opportunity,
and because there are so few around nowadays.
Think you're a good candidate for an upcoming Agent Life?
Contact Nadine Godwin, Agent Life editor, at [email protected], and please include your
agency name, agency location, telephone number and e-mail address
in the message and put "Agent Life" in the subject
profitable independent tour
One of the most frequently sold
travel products is the independent tour. It's by far the most
popular form of packaged travel -- some estimate that 90% of all
multiday tours sold are independent.
Yet there's little
information out there on how to properly sell them. It's as if
we're supposed to just know how.
First, a few
definitions. An independent tour is a package with elements that
permit buyers to travel on their own. There's no tour manager
involved, no group to travel with. Clients are free to do what they
want within the package structure.
One variation is
the fly-drive, with only two product components. Another is the
increasingly popular hosted tour, which provides on-site
representatives of the tour operator, usually at a hotel lobby desk
during set hours, to assist and counsel clients.
the dynamic packages that online agencies produce, where the
computer assembles a cluster of travel components that the customer
How do independent tours benefit you?
They yield solid
They enable you
to access a huge inventory of products, often at competitive
They present many
opportunities to up-sell and cross-sell (special excursions, a
higher class of car rental, etc.).
They provide a
place to one-stop shop for the components clients
They're often the
best source of last-minute, well-priced products.
They appeal to an
array of customers.
How do independent tours benefit
considerable flexibility. Want to visit that little Austrian
village in the distance? No problem. Stop, go, linger, anywhere,
anytime, with no schedules to follow.
represent an outstanding value. The tour operator's size and
leverage generates great prices. According to many experts, an
independent package typically saves clients 20% to 30% over a trip
assembled piece by piece. It's not unusual for a hotel-car-air
package to cost less than the air alone.
They offer a wide
selection of properties. Be alert to a common consumer
misconception: that independent tour operators offer only
bargain-level lodging. That once was true. Today, some of the
world's finest hotels can be found in a tour operator's
include only the components that people want.
Who are prospects
for an independent tour? They tend to be somewhat adventurous, and
they like being in control. They often prefer to see a place by
traveling to places where an escorted tour doesn't make sense to
most people. Most tropical beach resorts qualify and, not
surprisingly, such destinations dominate the independent tour
Marc Mancini is an industry speaker and consultant who
teaches at West Los Angeles College.