ouse of Travel in Springfield, Mo.,
survived the post-Sept. 11 period by economizing, charging fees and
hustling for business, according to owner Linda Strait.
Sales last year dropped $600,000, from $6.1 million in 2000 to
$5.5 million, mostly due to the terrorist attacks and, to a lesser
degree, the sluggish economy, Strait said.
It was enough to force her to make personnel changes in the
company that she had taken over in 1986 from her parents, the
She laid off her full-time receptionist and made outside agents
of two of her inside staff.
The agency now has six full-time employees and five independent
contractors. Everyone is paid on a commission basis.
For now, the 32-year-old agency is relatively stable, a position
Strait attributes, in varying degrees, to the personnel changes,
the agency's location (in an upscale shopping center across from a
large mall) and her longtime practice of charging service fees.
"Our fees started with $10 per airline ticket for only those
airlines cutting commission," she recalled.
But over the years, the agency increased fees as commissions
decreased and caps tightened, she said.
Since last August, the agency has been charging service fees of
$20 per air ticket. However, whenever possible, consolidators are
used rather than individual carriers, Strait said.
Fees also apply for processing frequent flyer tickets and
airline discount coupons.
House of Travel charges a $50 service fee for FIT trip planning;
for last-minute FIT trips, the fee is $150.
"We also have a $50 per person fee on any packages canceled
after deposit," she said.
Strait said the agency is substituting quality and personal
service for quantity and that fee-paying clients are getting good
service for their money.
Good service, Strait said, can mean anything from inserting
personal tips in final documents to providing a currency exchange
service for clients going abroad.
And, in one of life's little ironies, fee-paying clients who
wander into her offices in the shopping center across from the mall
can expect to be distracted, and perhaps amused, during their
Strait recently enhanced her agency's decor with a display of
memorabilia she has collected over the years -- artifacts of
-- Henry Magenheim
inda Strait, owner of House of
Travel, Springfield, Mo., said her hustle for business since Sept.
11 is an extension of her efforts to derive income from clients she
might never meet face to face. That includes being nice to
"shoppers" and doing some "shopping" of her own.
She instructed her staff to take seriously first-time callers
asking for price quotes and to be sure to provide the quotes during
those initial contacts. She said she's found this practice to be
successful in closing sales right away.
The agency also uses its year-old Web site, at
www.house-of-travel.com, as a promotional tool and an informational
One recent feature on the site was a five-day spring break
cruise for students, departing March 25 on Carnival's Celebration
out of Galveston, Texas.
Another was an eight-day, Feb. 24 cruise on Carnival's
Inspiration out of New Orleans to aid the Children's Miracle
Network. A share of the proceeds will go to the charity. Credit
unions cooperated by encouraging their members to take the trip,
The staff contacts companies in the industrial region in and
around Springfield to suggest that they sponsor incentive trips for
their best employees.
The agents also call professional groups to propose a
tax-deductible seminar on a cruise ship. Potential clients for
cruise seminars are doctors and accountants who need to take
courses to update their certifications, Strait said.
So committed is she to this niche, that if she learns of a
group's interest in a seminar and finds none being offered, Strait
will determine the curriculum required and locate instructors to
Strait is big on educating potential agents, as well.
About a year ago, she founded the Travel Career Academy, which
recently won certification from the Missouri Board of Higher
Her timing was terrible, however.
The terrorist attacks diminished the desire to take a travel
career seriously, she said. The school is still operating, however,
serving students who see travel as a second job or one they can
build upon while continuing as independent contractors.
The Travel Career Academy expects to expand instruction with a
focus on cruise-only sales and tour escorts.
Strait, a certified travel consultant, also lends her expertise
to officials at the local airport.
In her advisory role, she recently was invited to write a
front-page Family Travel column for the airport's newsletter,
From Dan's desk
A taxing decision
When leasing equipment
with the option to buy, do I depreciate it?
The short answer is: Consult with a tax professional. The
difference between a lease and a purchase agreement can be a pretty
fine line, but one that can carry significant tax consequences.
Vendors selling equipment do not always have your interests in
mind when they draft agreements, so don't make assumptions and
don't take the salesman's assessment as valid.
evaluate your deduction, the Internal Revenue Service will first
determine whether it recognizes the agreement as a lease agreement
or a conditional sales contract.
Payments made under a conditional sales contract are handled
differently from a lease expense.
Instead of writing off the entire lease payment, you would
depreciate the equipment. The tax expense would be based on the
depreciation schedule and the interest paid, not on the monthly
Whether the agreement is a conditional sales contract depends on
the intent of the parties.
The IRS determines intent based on the facts and circumstances
that existed when you made the agreement.
In general, an agreement can be considered a conditional sales
contract rather than a lease if any of the following are true:
• The agreement applies part of each payment toward an equity
interest you will receive.
• You obtain title to the equipment upon payment of a stated
amount required under the contract.
• The amount you pay to use the equipment for a short time is a
large part of the amount you would pay to get title to the
• You pay much more than the fair rental value for the
• You have an option to buy the equipment at a nominal price
compared with the value of it when you can exercise the option.
Determine this value when you make the agreement.
• The lease designates some part of the payments as interest, or
a part of the payments is easy to recognize as interest.
Be sure to consult with your accountant or other financial
advisor before you enter into a lease contract because your tax
benefits can vary greatly.
Former agency owner Dan McManus is president of the McManus
Group publishers of business management advice. Contact him at [email protected].