HOMEWOOD, Ill. -- Is this any time to open a travel agency? Art
Stark, owner of Homewood (Ill.) Travel and The Cruise Corner and
Vacation Center in Wilmette, Ill., with combined volume in the
neighborhood of $8 million, thinks so, but not just a typical
full-service agency. Instead, Stark said he is planning to open a
"vacation store" next year, although he declined, for competitive
reasons, to specify the location. Unlike his two other agencies,
the new one will not be appointed by the Airlines Reporting Corp.,
and it will sell only cruises and tour packages, not air
Stark, speaking from his Homewood office, said he is not daunted
by competition from other agencies. "You can walk to 14 agencies
from our front door. We will focus on that segment of the industry
that is most profitable. We think there is still a viable business
opportunity out there, but certainly not in airline tickets," Stark
He said his view could change if net air fares become the
industry norm, but for now he is continuing with a program he
launched three years ago to reduce his reliance on air sales. Where
air tickets once accounted for 85% of sales volume, they now make
up only about 45%, Stark said. The agency actually is selling more
air tickets than it did three years ago, but as total sales volume
has increased with more cruise and tour bookings, the percentage of
air has gone down. "If we had to stop selling air today, we could
survive," Stark said.
He cautioned other agencies that might just now be preparing to
focus more heavily on nonair products that the shift cannot be
accomplished overnight. "It's not just 'add water and mix.' It
takes a huge effort and a lot of patience," he said.
Stark said his agencies have a whole range of service fees for
air ticket handling, including a basic $15 per ticket charge. He
advised other agency owners and mangers to keep in mind that even
with service fees, they save clients "a ton of money." "It costs
$32 to produce an air ticket in our office. If my average
commission is $18, I'm not going to make it up in volume," he said.
"Agents have been imbued with the idea of giving away their
service. When the [commission] revenue stream stops, it's got to
come from somewhere else. Nobody likes to lose a client [but] there
are a lot of clients out there that are not profitable."
When asked if his neighbor agencies charge fees, Stark said he
did not know. "I don't really care. It's enough to run our business
without worrying about them."