Now is not the time to rest on your laurels
Wow, where has summer gone! We are already halfway through July and many of you are using this time to see the world, experience new products, or visit old friends. July and August is typically when booking activity is at its lowest point of the year. This is a great opportunity take a deep breath and recharge a bit. You should be reaping the harvest (and a bump in cash flow) from the work you did in late 2015 and early 2016.
Enjoy the next few weeks as starting in early September, the most lucrative booking period of the year will begin. Are you prepared for it? But you are probably asking “Dan, isn’t wave season, the 6-8 weeks after New Year’s, the busiest time of the year?” As those of us who have been selling travel for a while can attest, wave season is a very busy activity period, especially for lower-yield, warm weather destinations. The real money is earned in the fourth quarter with Alaska, Europe, and other exotic destinations.
Think about it: when are suppliers putting on their biggest promotional efforts for destinations such as Alaska, Europe, and Asia? Answer: September-November. When do you have the hardest time getting the attention of your local business development managers? September-November. The BDMs are working nights and weekends to promote and sell their product.
They are a lot like you. You are paid a commission on sales. They receive a bonus based on target achievement and percentage of sales. They know if they are below a certain percentage of business booked by January 1, they will have a very hard time achieving that bonus – that’s not good for anyone.
If it is important for suppliers to have a certain percentage of backlog by the end of the year, should it be of equal importance to you? In my opinion, the booking year should be tracked from September to August. This is the most strategic approach to business. Most of what you book in this time frame will travel in the next year. Suppliers base commission rates, co-op, and other support on traveled revenue for a calendar year, not when it is booked. Since booking windows tend to be 6-8 months or more for longer and higher priced destinations, it makes sense to focus on selling those products in the fall and building a big backlog going into the new year. This is exactly what they (suppliers) do.
If you want to be competitive, now is the time to block group space with cruise and tour providers. Any promotional activity, i.e. product and destination presentations or sales and marketing campaigns should be scheduled by mid-August. Be ready; October could be the biggest booking month of your year.
Is there a “magic backlog number”, the amount of sales you should have on the books by Jan 1? It depends on your business model. If you focus on contemporary, warm weather destinations with shorter booking windows, the number is probably around 50%. If you want your business to come from longer, more exotic and expensive destinations, the number is probably closer to 65-70%.
Set your booking targets to a sales year from September to August, and you will be light-years ahead of most of your competitors. There will have much less pressure to sell low yield, last-minute, discounted products, and you will be able to accurately predict cash flow for the coming year based on travel date of your bookings.
While everyone else is scrambling from commission check to commission check, you will be focused on what’s important to your job or business.
Dan Chappelle is President of WealthyTravelAgent.com where he develops sales leaders for the travel & tourism industry. He assists sales professionals achieve their full potential by expanding their vision, shifting their mindset, and transforming their businesses to produce tangible results. An internationally known travel industry expert, sales executive, and speaker, Dan has earned an enthusiastic following among travel agents and industry leaders worldwide. He has been featured in numerous trade and consumer publications and is an instructor for the Travel Institutes’ Professional Educators Program, providing insight for travel professionals. You can contact Dan by email at Dan@WealthyTravelAgent.com.