Blue Sky Tours predicts sunny days in its 30th year

Blue Sky Tours is celebrating its 30th anniversary in 2011, and Travel Weekly's contributing editor for Hawaii, Shane Nelson, spoke recently with Kevin Wilmore, Blue Sky vice president and general manager, and Susan Kownacki, director of marketing, about the wholesaler's vital partnership with agents.

TW: What kind of tools does Blue Sky Tours offer travel agents? Does the Internet play an important role in your relationship with agents?

You can book us in a variety of ways. We have a very strong res agent department. We also have a booking engine on our website in addition to being available on VAX VacationAccess. We also offer an affiliate booking engine through a number of our agencies.

Blue Sky Tours focuses solely on Hawaii.We are online in so many respects. I would say a majority of our communications are available online to travel agents. We have hot deals that we do regularly that are posted on our website. We do emails twice weekly that share with our agent customer base different promotions that are going on at a particular time. We also have an online brochure.

TW: How long has the Blue Sky online engine been up and running?

Our website has been bookable for 15 years probably, so we've been bookable online for a long time. We've also been running the affiliate program where we can turn the agent site into a bookable site for Hawaii, so we're kind of the engine behind their bookable website. We've been running that program for probably four years now.

TW: Are fam trips an important part of your relationship with agents? Has the frequency of those offers changed because of the Internet, webinars, etc.?

We definitely do fam trips. Our numbers fluctuate a little bit up or down, but they seem to have been going up over the last three years. The more we do, the more opportunities we get from our supplier partners and the visitors bureau to participate in more fams. We'll have as many fams this year as we did last year, if not more, so we try to look for the opportunity to reward and educate some of our best customers.

Kownacki: And to augment those fam trips, we also offer webinar programs that really started to kick into pace this last year, and in 2011 we hope to do about one a month with our partners. We often partner either with the island chapters or a supplier partner, tell them a little bit about Blue Sky Tours, how we work and what's unique about us and then also incorporate those with our other partners.

TW: Are you doing more or less face-to-face marketing with agents than in the past?

It's been more of a focus for us over the last year or two. I think as the economy soured over the past few years, it's become more and more important over the last few years for me and my whole team to get out and be face to face with agents. We've expanded our sales team. We just added a sales rep in San Diego. We're adding a sales rep on the East Coast. We're enhancing our sales presence across the country. We're doing more trade shows.

We feel we have a good story to tell, and we feel that being Hawaii experts and selling only through travel agents plays very well to that audience. So we want to get out and be face to face with people.

TW: As Hawaii is Blue Sky's sole focus, how does the destination distinguish itself from the competition in terms of an agent's bottom line?

Hawaii is a unique destination. It's a dream vacation, and the farther east you go in the domestic U.S., the more that's true. You often have a higher average spend and a longer length of stay. The way we commission the product and commission the activities gives the agents really great commission potential, even compared to a cruise. So we feel like Hawaii is a great value, there are still great deals to be had in Hawaii, but the key is really the value of Hawaii as a destination and the perception of the quality of the vacation experience.

TW: How does Blue Sky distinguish itself from other wholesalers that offer Hawaii products?

We try to lean on a couple of core points. One is just our knowledge of Hawaii and the fact that that's all we sell. From the folks in our accounting department, to our marketing team, to our reservations team, everybody is all about Hawaii all day, every day, and so we really have a depth of knowledge about Hawaii that's hard to replicate, and we believe that we're better at it than everybody else. On top of that, we only sell to travel agents. We believe that the best way to give a customer the best experience on a Hawaiian vacation is through a knowledgeable travel agent who works with us because we can answer the questions they need answered and we're going to provide great value.

So we have the knowledge, we strive to provide the best service, we think we have the best product lineup in the industry. We have everything from ultraluxury to budget properties, so no matter what the travel agent's client is after, we can provide it.

TW: Hawaii is an excellent place for agents to earn extra commissions on various activities. Do you try to encourage and assist agents with the booking of activities that can increase their earnings?

We do. I try to sing this song every time I'm around agents. We want to sell activities up front. Obviously, there are a lot of providers on the ground, but the key really is locking in not just the revenue up front but it's more about the service to the customer and the experience they're going to have. What I tell agents is that somebody is going to recommend a whale-watching cruise to a couple or a family, and that person is going to be their hero. Let's be their hero and not let it be someone on the ground once they hit the Islands. There are a lot of opportunities and a lot of great activities, just spectacular opportunities to do things you can't do anywhere else on the planet. We push those and talk to agents about them when we try to train them here. I think we've seen some better success over the last year or two at selling activities, although it's still not as prominent as we'd like it to be.

TW: Did you see more business to the state in 2010 compared with 2009?

Our growth for 2010 far outpaced the destination as a whole. We're very pleased with our 2010 results on a passenger growth level. ... We saw growth really coast to coast. We had some markets that maybe were a little soft before that picked up, but that may have brought them into the normal range, so I really can't point to one region and say we did better there. It was pretty universal.

TW: Are you hopeful about that momentum continuing into 2011?
We are still seeing some positive momentum. We're very optimistic about the first quarter, and we're excited about what we're doing to drive business throughout the rest of the year. I don't think we'll see the same growth as a percentage, but I do think we'll see healthy growth this year.

Kownacki: I also think we'll be emphasizing activities more as we go into 2011, because they really do provide that island experience that everybody wants to have when they go to Hawaii. Whether that's ziplining in Kauai or going to look at the lava flow on the Big Island, that experience is a huge part of going to Hawaii.

TW: Visitor spending in Hawaii is up 16% year over year through November. Are you seeing an increase in what Blue Sky customers are willing to spend?

Our overall revenue per passenger is up. It was up over 2009, and if you look forward into 2011, it's up still over what it currently is, so that backs up that point to a certain extent. I still think people are looking for value. The consumer mindset has changed a little bit. As a whole, you had a period of time where maybe it was more affluent people making up a larger percentage of the overall travelers, so even though they were still looking for a good value, maybe their spend was a little higher.

TW: With the discounting and increased value that's been offered in Hawaii, are travelers now expecting better deals and offers on vacations moving forward?

We as an industry have trained consumers over the last couple of years to look for deals, so I do think people are conscious of that, and obviously we market and price to drive demand. We're not seeing the same sense of urgency or desperation that maybe you would have seen a year or a year and a half ago, when things were really kind of bad. I think the way promotions are handled and the pace at which they come out are returning to a more normal status. But that being said, the prices are still great. It's still a tremendous value.

TW: Hawaiian Airlines recently increased its transpacific rates by $10 in each direction due to the rising cost of fuel. Are you concerned about an increase in airfares to the Islands?

There's no question that fuel costs drive airfare costs, and airfare costs are a major driver as far as demand for the Hawaiian market, so we keep a pretty close eye on fuel costs and what they're doing to airfares. What I would say is that typically the Hawaiian network of suppliers adjusts, and when airfares go up because of fuel costs, you start seeing, collaboratively within the marketplace, new specials come out and extra values thrown in and things that offset that cost for the end consumers. The market is good about self-correcting to maintain demand.

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