Before Bill Fischer became a celebrity travel agent selling to the rich and famous, he tried his hand at training. He once told me that he believed he understood, like no one before him, how to sell luxury travel, and his first attempt to monetize that knowledge was to set up travel agent seminars offering to teach agents how to sell to the uber-rich.
He had very few recruits and failed spectacularly, but he went on to prove the inverse of the axiom that "those that can't do, teach."
Fischer was far ahead of the curve for the luxury travel boom, and in retrospect, it's hard to believe that his message had so little resonance.
Why don't people recognize prophetic ideas when they're offered? Or, once an idea's merit is demonstrated, why don't people simply mimic those who practice it successfully? It would seem that a businessperson could move ever upward simply by testing ideas that work well for others and then adopting them if they prove to be superior to legacy practices.
There are, of course, several reasons why people don't do that. Many entrepreneurs are simply highly individualistic and take a lot of pride in blazing their own trails and following their own dreams.
Or, agency owners might worry that if they make dramatic changes, they'll alienate a portion of their clientele who likes them just the way they are.
Or, they might intellectually understand the value of constantly experimenting to make their businesses stronger but also recognize that it takes a lot of energy to change a business, and they're simply not that energetic.
In good times, these questions don't matter much. Once a business has reached a comfortable level of profitability, there's not a lot of incentive to change. When the economy is up, agency owners can become simultaneously lulled by inertia and carried by momentum along the path they first set for themselves, without dire consequence.
But in down times, that inertia/momentum mix can spell death for a business. The approximately 15,000 travel agencies that closed their doors since 9/11 could not adapt to the changed circumstances that followed the crisis.
Another 18,000, however, did survive. They're the ones who, rugged individualists or not, started charging service fees and focusing on selling tours, cruises and all-inclusives, en masse. Additionally, many reduced their costs significantly by moving their businesses into their homes. Almost everyone whose travel agency is still around today veered significantly off their pre-9/11 vector.
But now, the Black Swan has arrived again. Prepare for change.
The Black Swan is not an evil omen, but emblematic of a sudden, dramatic shift in our perception of reality. It's also the name of a book by Nassim Nicholas Taleb that succeeds in undermining a reader's belief in the value of expertise. He points out that in Europe, where all swans are white, leading swan experts never gave a thought to the possibility that there could be black swans. The eventual discovery of black swans in Australia could not have been anticipated by the most learned scholar.
Similarly, economists could not have anticipated that credit markets would dry up on a global basis, nor could individuals anticipate that their excellent personal credit history now means bupkis when they apply for a loan. This has never happened before.
So unless your model thrives on falling prices, your business is in significant peril. If you're feeling the pinch of selling $25-a-night cruise cabins or resent losing commissions when a resort gives away extra nights for free, welcome to 2009.
Taking into account the thinning that occurred after 9/11, one wonders who will still be here when the economy begins to recover. Given that another Black Swan might be just around the next bend, no one can know with certainty, but here are my guesses about who will survive:
• Large online agencies. They successfully offered distressed inventory after 9/11 and are preparing to do so again.
• Host agencies. Every agency will have to look hard at costs, and another wave of agents may move home.
• Certain niche players. Those who are skillful in identifying trips that can be positioned as money-saving -- for example, arranging travel to destinations where medical procedures are less expensive than back home -- are likely to grow.
• Volume players. Those large agencies that can exploit overcapacity in cruise lines and hotel inventory might have some advantages. But note: For those without adequate cash flow or access to credit, size may become a liability.
• Those who can reassure clients. Supplier bankruptcies are likely to become a growing concern with consumers, so agents will have to watch their suppliers' health like never before. Expertise in this area might become a marketable skill, and anyone who figures out a way to offer guarantees will have an advantage. Trip protection insurance will become more important than ever.
• Web-savvy agents. Those who understand how to exploit social networks and blogging will have an advantage over those who don't, though this can be a very labor-intensive form of marketing or lead-generation, best suited for very large or very small agencies.
Of course, given the nature of Black Swans, it's likely that I have completely missed the most significant megatrends about to occur. What will become the defining characteristics of agencies five years from now simply cannot be anticipated.
Even so, my guess is that there's probably someone out there right now -- the next Bill Fischer -- offering ideas that are exactly right for the future. And finding no takers.
During years of prosperity, we get out of the habit of listening to people, in part because we think we know what we're doing.
Taleb and his Black Swan suggest that our only certainty is that we never fully know what we're doing.
Still, one shouldn't draw the conclusion that it's futile to search for improvement. When the Black Swan appears and changes the landscape, staying the course is no longer an option. As 15,000 former travel agency owners will tell you.
Email Arnie Weissmann at [email protected].