HONOLULU -- Regal Travel, Hawaii's largest agency, viewed the
state's decline in Asian visitors as an opportunity. "It hit me
last March: There were empty seats. Carriers were hurting and were
ready to wheel and deal for the first time," said Herb Dockery,
The result was six escorted shopping tours to Bangkok between
September to year's end for Hawaii residents. All sold out, each
with 30 people. Monthly tours are scheduled this year, starting at
$799, with air on China Airlines and six nights' hotel
Ironically, the 10% decline in Hawaii's Asian visitors last year
helped Regal post a record gross sales figure. The Bangkok tours
were the latest move by the $40 million agency to increase revenue
since the first commission caps in February 1995.
"We in Hawaii probably took [the caps] on the chin more than
anybody. Regal lost a lot of money," he said.
The first caps also affected Regal's growth; the company had
just opened in Kona and was about to open at Honolulu's Ala Moana
Center. "We held off," said Dockery. The agency has not opened
another location since then.
The recent international caps, he said, had less than one-tenth
of the affect on the company than did the earlier caps and
Regal does little international business-travel ticketing. Most
of its 13 offices on four islands are at shopping centers, and more
than 80% of its business is leisure travel.
With the first caps, Regal searched for ways to make up for lost
revenue, including tightening up on credit. "We sold few cruises,
so we began to push these products and then created our own cruise
packages," he said.
Last year, it had 15 escorted-tour cruises; this year it will
have 20. Seven-day Alaska cruises are the most popular, followed by
cruises through the Panama Canal and Mexico. "Many, especially
retirees, would like to go on a cruise but [they] are only
comfortable going with a group."
The cruise tours served as a model for the Bangkok tours. Both
are sold only by Regal and not through other agents.
Dockery said the major selling points are the presence of an
escort, who travels with the group, and the fact that the tour is
almost guaranteed to operate. Tours get under way with a minimum of
four passengers (the lowest number they have had on a cruise was
10). Regal also has an advertising budget smaller agencies could
With the first caps, it began negotiating net rates with island
hotels for resident interisland travel. It is also moving more into
bulk air fares.
The agency is part of a large Honolulu-based company:
International Management & Services Group, owned by Ray
Miyashiro. Sister operations include Trans Hawaiian Services, one
of state's largest tour bus companies, and Rendezvous Tours, which
specializes in interisland and Nevada packages for residents.
Regal's 50,000-member Travel Club also helps.
Dockery joined Regal seven years ago to start the club, becoming
president three years ago. The cost for joining the club is $87 a
year. Members get a free Aloha Airlines roundtrip ticket at a
little lower price than Regal normally would sell it for, and a
newsletter four times a year.
"[The club] gives us a big database," said Dockery. "Our goal is
to make them permanent customers. We give them [better] deals and
promote them in the newsletters before we advertise them. He said
Regal is approached by an average of one agency a month that wants
In late 1997, Regal instituted a ticketing fee of $10 per ticket
(excluding interisland flights). Dockery knows of no other Hawaii
agency that does this, although some have various service fees.
Dockery said, "We decided [there would be] no exceptions. Our 85
agents just quote the price and the fee and do not discuss it
unless asked questioned."
Not quite paradise
You've got to be a different breed to survive in paradise,
according to Dockery. Mainland agents might want to consider the
following issues before setting up shop in Hawaii:The state's top product, Dockery noted, is interisland travel,
which results in a large volume of ticket sales, but profit is low
and business is competitive. Said Dockery, "Hawaii agencies do
thousands of small transactions each week to develop the dollar
volume that many mainland agencies can achieve with a few
transactions."Hawaii is the only state where airline ticket coupons are sold
through bank automated teller machines. Hawaiian Airlines started
selling interisland coupons (which are used as tickets) through
Bank of Hawaii's ATMs last spring. Regal filed suit with the state
Department of Commerce and Consumer Affairs, contending that the
bank, which is not registered as a travel agency under state law,
is acting illegally. Regal is awaiting a ruling. "We wish that
other agencies had joined us in this fight. If this scheme is
upheld, sooner or later mainland agencies are going to have to
fight this same battle," Dockery said.Hawaii is the only state that imposes a tax, 4%, on airline