Out with the old

Whereas most agency owners agree that to survive in the post-commission cap era they have had to make some changes, some have done more of an about-face than others.

Russ Constans, manager of TravelSmart in Kansas City, Mo., has made what he calls a 180-degree shift in virtually all aspects of his business procedures in the last few years for the simple reason that, to borrow an old adage, drastic times call for drastic measures.

Constans is the former owner of a Kansas City travel agency, Indian Creek Travel, which he sold to John and Teresa Ahrens in April 1998. They changed the name of the agency to TravelSmart in August 1998, then purchased two other agencies.

Describing the transition from owner to manager as "a relief" from the burden of worrying about payroll and accounting, Constans said: "As any small-business owner will tell you, a lot of nights you go to bed wondering if you are going to make it."

But not all of the pressure is off, he said, because the company has undertaken a "big turnaround" in its business procedures.

Step one involved decreasing the corporate client base from 50% to 25% in favor of upscale leisure travel.

"My goal is to get corporate bookings down between 15% and 20% by the end of the year -- not by diminishing that market but by increasing the other part of what we do," he said.

The company also instituted service charges of $10 per air ticket, Constans said, noting that "there is a price resistance on the part of the consumer to go much higher."

Anticipating a time when airlines will no longer offer any commissions, he said, "I figured out that it costs me $28 to break even when issuing a ticket. I think if you charge a $28 fee, most corporate clients will say 'goodbye' and go to the Internet."

While trying to develop "zero reliance" on airline commissions, Constans still makes money on air through contracts with consolidators and wholesalers.

The next step was to move from a nearly hidden, eighth-floor office space in a high-rise to a walk-in mall location.

"Now we have a neon sign, nice furniture and a big-screen TV in the window tuned to the Travel Channel," he said.

Noting that "change is never easy," Constans said, "It's been two years since the process started, and things have calmed down."

And in with the new

While Russ Constans of TravelSmart in Kansas City, Mo., is profiting from the new direction his agency is taking, not all of his staff made the transition along with him.

"We did lose some agents," he said, and those who stayed have had to accommodate a new location, a new client base and a new attitude.

One way Constans pumped up the morale of his current staff of 24 was to involve them in a client-based software marketing tool supplied by Virtuoso, a consortium formerly known as API.

The program enables individual agents to personalize mailings with their names on them, using their input to create the databases.

"Getting agents involved in that has been a big piece of the puzzle in terms of marketing, and it has been good for [staff] morale and for the bottom line," Constans said.

The company also has refined its menu of upscale niche offerings, again with the help of Virtuoso, which TravelSmart joined in December 1999.

"The vendors in the consortium are unique and upscale as well as off the beaten track," Constans said.

Although TravelSmart is the ninth-largest agency in Kansas City, Constans said he hasn't seen much in the way of marketing upscale leisure travel from his competitors.

"That leaves us the biggest player in town going after that market," he said.

Q:My husband insists on helping out at the agency after hours and on weekends. I'm not satisfied with his work, but how can I fire him?

A: Firing him might not be the best option. Before you hand him his pink slip, try to determine why his performance isn't up to your standards.

Do you ask him to do things he's just not trained well enough to accomplish? Something that might be simple to you might not be second nature to him.

Maybe he doesn't like the work. Have you asked him which tasks he would prefer to do? There are many areas in the agency where he would probably be more comfortable and confident and therefore do a better job.

Have you trained him as you would any other employee? It's easy to take for granted people who are close to us.

When you do give him instructions, are you absolutely clear on when, how and why you want the work accomplished? Maybe he would learn more easily from another employee.

If your husband insists on working in the agency, maybe he is really just looking for a way to spend more time with you.

Talk to him about why he decided to help out. If he wants to feel connected to the agency business, include him more by keeping him informed on decisions and asking his opinion.

Q:Are parking tickets for the agency's delivery vehicle tax deductible?

A: Unfortunately, no. If you allow that van to stay too long without feeding the meter and you're given a parking ticket, the fine is not deductible.

Likewise, if you run a red light in your delivery van and are given a ticket, you can't deduct that as a business loss either.

On the bright side, you can deduct money paid into meters or to a garage for parking fees. Every little bit helps!

Former agency owner Dan McManus is the publisher of the newsletter the Successful Worldspan Agent. Contact him at [email protected]