Reinvented retail operation sees a renaissance

The story of Anderson Travel in San Diego could be the story of a number of U.S. travel agencies. Founded by Pat and Pal Anderson, the company was a mom-and-pop operation that grew through the 1970s, 80s and early 90s to a peak of 10 locations and $50 million in gross annual sales.

But the retailer was jolted in the late 1990s by commission cuts and the rise of the Internet. Then came 9/11. The owners, co-president Brad Anderson, his brother Van and father Pal, who at age 84 still participates in the running of the company, wanted to come up with a new strategy. This is where the story of Anderson Travel veers off the standard course.

It had become apparent to us that we could no longer do business the same way, operating from a brick-and-mortar location selling airline tickets, Brad Anderson said.

The strategy was to start a host agency specifically for veteran, home-based agents selling leisure. The Andersons chose a name, Americas Vacation Center, that connotes a national presence.

We wanted to think big, and we werent afraid to change, Anderson said. We were looking for people who were caught in the same place we were, trying to be all things to all people. And that doesnt work in todays more savvy consumer environment.

A key component is to link home-based agents to AVC through a custom-built, Web-based technology platform. The company invested millions of dollars, Anderson said, in that platform, Agent Power, which agents use for vendor information, live product availability, customer relationship management, lead and commission tracking and marketing and sales aids.

A third-generation Anderson   --   Vans son David, a young software programmer   --   led a team of 12 programmers in creating the technology.

In three years, AVC attracted hundreds (Anderson would not disclose the exact number) of home-based agents.

Our model is to throw life rings out to people whose business model has sunk or is sinking, he said. Weve been able to help agents to have the lifestyles, incomes and prestige they havent had in the past.

Meanwhile, Anderson Travel, which had a strong dependence on airline and corporate travel and has been an American Express representative for 20 years, has been pared down to three locations. The Andersons sold off the corporate side of the business. Today, the main business is AVC, where the percentage of airline tickets sold is 1%, Anderson said proudly. The company forecasts sales of $100 million (including Anderson Travel) in 2006.

Americas Vacation Center offers two levels of participation: Gold, with a $99 start-up fee, and Platinum, with a $495 start-up fee. Agents pay no other fees. Platinum level agents can get leads from AVC and must produce at least $1,000 in commissions a month.

AVCs commission split is 80% to the agent, 20% to AVC for the agents own book of business; 70% to AVC and 30% to the agent on bookings from leads provided from AVC.

In July, the companys average agent earned $60,000 in commissions, he said.

AVC employs 45 staff in accounting, sales, technology and customer service departments. The latest addition to Agent Power is AVC Buddy, an instant-messaging system that agents use to communicate with other AVC representatives and set up a buddy system for back-up help. The company is also rolling out a private-label version of the AVC Web platform that enables its agents to create their own Web sites.

But technology isnt the answer to everything, Anderson said. People want to talk to people. Our telephone lines are open 24/7 for customers, and we have a hotline for our travel agents 6 a.m. to 9 p.m., seven days a week to give them support. They always get a live person.

With confidence that sales will grow, the company has blocked more than 15,000 cruise ship cabins on American Express-preferred vendors.

AVC is promoted through direct mail, print and Internet advertising and public relations. Press releases on the companys developments are regularly sent to media by an on-staff PR manager.

Is the company turning its back on bricks-and-mortar in favor of the virtual home-based enterprise?

Were not going to get out of the brick-and-mortar business because its still a great business, Anderson said, but were going to keep growing the home-based affiliates and will reach several thousand, an army of specialists who are very good at what they do.

Im not trying to get 10 million people producing $2 a year, Anderson added. It comes down to productivity. Its not about how many home-based agents you have; its about how productive they are.

Think youre a good candidate for an upcoming Agent Life? Contact Laura Del Rosso, Agent Life editor, at [email protected]. Include your agency name, agency location, telephone number and e-mail address in the message and put Agent Life in the subject line.

Perfect Itinerary

A Mozart tour in the Czech Republic and Austria

Travelex International, a Chicago travel agency that organizes group tours through its Excapes division, put together a program to the Czech Republic and Austria in honor of Mozarts 250th birthday this year. The leader was Carl Grapentine, a radio personality at WFMT, an FM station in Chicago devoted to classical music. The agency has worked with other WFMT on-air personalities for other classical music and opera tours to domestic and international destinations. The following is a portion of the 12-day Mozart trip in the Czech Republic and Austria.

Day 1

Clients have the morning and afternoon free to explore Prague. In the evening, they meet at the groups hotel, Casa Marcello, for a talk by Grapentine on Mozart. A bus takes clients to Villa Bertramka, the beautiful mansion where Mozart stayed in 1787 and 1791. The mansion features a large exhibit of Mozart memorabilia. A welcome reception is held in the courtyard, followed by a concert and program, A Night With Mozart. Dinner is in the villas restaurant. Clients return to Casa Marcello following dinner.

Day 2

Clients depart Prague for Vienna by private motorcoach. The remainder of afternoon is free. In the evening, a talk on Mozart by Grapentine is followed by a walk to Musikverein/Grosser Saal (Great Hall) for a concert by the Vienna Philharmonic Orchestra. Following the concert, clients walk back to hotel.

Day 3

Clients take a half-day city tour of Vienna with a guide. The afternoon is free. For dinner, clients transfer from the hotel to Beethovenhaus, a former home to Beethoven that now is a tavern.

Day 4

A full day for individual exploration of Vienna.

Day 5

Clients transfer to Salzburg via Wachau Danube Valley. In Krems, Austria, they take a Danube River cruise to Melk, where a motorcoach takes the group to Salzburg. The remainder of the afternoon and evening is free.

Day 6

Clients meet in the hotel lobby for a half-day walking tour of Salzburg, including the Mozart family house and Old Town. In the evening, they meet for Grapentines talk on the Marriage of Figaro. Clients walk from the hotel to the Marionette Theatre for a performance of the opera.

The Perfect Itinerary is an example of an itinerary an agent crafted his or herself, not available anywhere else, but can be duplicated by other agents to sell to their clients. To send an example of an itinerary youve customized, e-mail to [email protected] with Perfect Itinerary in the subject line.

Hand In Hand

Agent, operator celebrate the ties that bind

A travel suppliers relationship with a retailer often lasts for years, and often it gets even stronger as an agent moves from one agency to another.

Such is the case with Dean Johnson, director of product development at Creative Leisure, the Petaluma, Calif.-based tour company, and Suzette Clayton, director of vacation travel for Casto Travel in San Francisco.

Clayton has long worked with Johnson and his local district sales managers to promote Creative Leisures products. That has not changed since her move from another agency to Casto Travel three months ago. It also helps that Casto, a member of Virtuoso, was already doing solid business with Creative Leisure, a Virtuoso preferred supplier.

Clayton plans to expand the business, however. Castos call center in Rapid City, S.D., last year opened a leisure outlet in the town as an experiment to draw local business. One of its first promotions was a fall and winter Creative Leisure package to Cancun geared to the South Dakota market.

In San Francisco, Clayton plans to promote Creative Leisures villa product line, which the company enhanced with its acquisition of Villas of Distinction. Clayton became a fan of villa vacations after she booked a Creative Leisure package for nine family members in Puerto Vallarta.

It was fabulous, like something out of Lifestyles of the Rich and Famous, she said. We had masseuses come in and had live music brought in. We had a maid and a cook who every evening would prepare margaritas for our cocktail hour. When we split the cost, it was an incredible value.

Now, Clayton is preparing a fall and winter Mexico villa promotion with Creative Leisure for Casto Travel clients. Creative Leisures Johnson said the companys promotions arranged by Clayton have been a success because Suzette understands marketing and leisure and works well with our regional manager and marketing team.

Hand in Hand highlights successful examples of agents and suppliers working together. Send suggestions to [email protected] with Hand in Hand in the subject line.

Agent Laugh

Say hello to the double-decker commuter jet

In a desperate bid to close the gap with arch-rival Boeing and gain a toehold in the small-aircraft market, Airbus is experimenting with a double-decker commuter aircraft to serve airports that dont like to be called small.

According to grainy photographs taken by aviation buffs through a chain link fence surrounding an Airbus research facility, Airbus engineers have welded a second passenger compartment to the top of a 50-passenger regional jet aircraft, increasing capacity by 20 seats.

According to an anonymous item published on Aerononsense.com, a Web site for airplane fanatics, the aircraft has been seen taxiing but not flying.

According to a purported Airbus fact sheet circulating on Aerononsense.com and elsewhere, the fare for seats in the extra compartment will be discounted to reflect certain design compromises that could affect passenger comfort and convenience.

Seats in the extra pod   --   essentially the body of a 20-passenger turboprop that is welded to the top of regional jets fuselage   --   are accessible only by a rope ladder. One passenger in the pod must be delegated to retract the rope ladder before takeoff because the extra passenger compartment is inaccessible to the flight attendant during flight. Also, overhead storage space is said to be limited.

Analysts contacted by Travel Weekly confirmed that the additional 20 seats would produce a 40% gain in capacity.

Assuming an 80% load factor and taking account of the increased fuel consumption because the additional weight and drag, it is estimated that the extra compartment would enable airlines to achieve a 25% revenue gain per departure.

Airbus has been coy about details of the project, but spokesman Phlap De Ploi confirmed that Airbus has been involved in experimental design work on a unique commuter aircraft but declined to say whether a working prototype has been taxiing around.

He added that 25% would be a far greater increase in efficiency than what Boeing has been able to achieve with its new 787 Dreamliner.

Since its founding, Airbus has been focused on producing a family of jetliners for major airlines, ranging in size from the A319 and A320 twinjets to the giant 500-passenger A-380 now in production. That giant aircraft, however, is behind schedule and over budget. Also, Airbus answer to Boeings 787 Dreamliner, the proposed A-350, is several years away.

These market pressures have apparently given Airbus the impetus to expand into the smaller end of the market before Boeing does.

During a recent press conference on another subject, Boeing CEO Jim McNerney was asked about the Airbus rumor. He declined to comment on whether his company had any similar project on the drawing board, though he brightened when the words rope ladder were mentioned and paused to jot down a few notes.

This fictional news report was based on interviews and events that did not occur. The author has chosen to remain nameless, but you can contact him at [email protected].  

Five Things

How to market your agency with seminars

1. Know your audience. Americans have more access to information today than at any time in history, and they still crave more. Providing customers with tools to help them make smart decisions is a great way to build loyalty, attract new customers and promote your business as one that delivers added value, according to the National Federal of Independent Businesses, a Washington-based lobbying group for small businesses. The first step before you select a seminar topic at your business is to know your clientele. How old are they? What are they interested in? Match seminar topics to your customers.

2. Find good speakers. Build a file of experts that you can draw on. Look to local experts, such as professors at colleges and universities.

3. Spread the word. Dont go to the trouble of arranging a seminar and not making a splash with it. Make sure that your customers and others in the community show up by promoting the seminars with signs in your business, sending a notice to your local newspaper and mailing flyers and sending e-mails to your regular clientele.

4. Pick a partner. Joining with a supplier or another type of partner, such as a non-profit organization, gives the seminar more exposure and draws more attendees. For example, a shoe store in Seattle offered a foot-care workshop to walkers participating in the Susan G. Komen Breast Cancer Foundations three-day benefit walk. A seminar before, during and after the walk drew attendees who spent more than $3,000 in the store.

5. Be persistent. Dont give up if your first seminar only draws a few people. Schedule another one, and another, and another. Continuity is the key, and it builds awareness of your business. A health food store in Washington has a regular schedule of at least one workshop a week with speakers discussing benefits of holistic products sold at the store. Attendance ranges from as few as five to more than 100 people, but even though some seminars draw low attendance, all the events are considered a success because they have built the stores reputation as a local resource for all things having to do with good health.