Hot dogs at Home Depot or breakfast at Tiffany’s? | TravelResearchOnline

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Hot dogs at Home Depot or breakfast at Tiffany’s?

What type of agency or agent are you and what type of client mix are you hunting for? Travel agents compare themselves to other industries; commonly it’s real estate agents, financial planners, attorneys or any other types of professions that require consulting and are paid a fee or commission.

If we look at the basics of what we do and how we are currently compensated we are more closely aligned with the retail industry. Our ultimate goal is to make money selling travel. From a retail perspective, I feel most agencies fall into one of the models below.  Which are you?.

The Home Depot – This agency is usually the MLM type. It caters to the self-booker. This agent is generally not very knowledgeable, but has a website where clients can arrange their own travel. This agent books mostly small-uncomplicated trips. The client for this type of agency is the DIY (do it yourself) person or someone who only does weekend getaways on a shoestring budget. This client always wants the deal and always feels he knows how to do everything better than the professionals. There are a few serious agents or clients in this group, but that number is really insignificant. This agent usually works part time, makes little money (or even loses it) selling travel and is out of the business within a year.

Wal Mart – This is the general agency that sells anything and everything. They are very focused on price and have a price conscious clientele. Generally, this agency markets to anyone and everyone and may or may not have a website with booking capabilities. This agency often spends time trying to price match quotes found on the web. A familiar phrase heard in this agency  might be “I found it on the web for less” or “Can’t you match such and such price from Costco, AAA, etc.” The agents are generally someone new to the travel industry trying to establish clientele. The agent will spend too much time focusing on price and often feels they are working too hard for too little. This can be profitable business model, but it relies on volume, so it can be hard work and very time consuming. Some of these agents are the survivors of the commission cuts who have not changed the focus of their business, but have been around long enough to have a loyal clientele. I foresee this agency not surviving many more years.

JC Penny / Sears / Kohl’s – This agency is similar to the agency above, but has  more focused marketing and does not compete often on price. They will sell more of the “off the shelf’ products such as escorted tours, cruises, vacation packages, etc. Generally, this agency has experienced agents who know the destinations, charges fees for some services and are customer focused. The agents typically have a loyal client following, get good referrals and makes a good living at selling travel. Clients for this group are price conscience, but not to the point of going somewhere else. They like working with an experienced agent.

Nordstrom – This is an agency with a highly focused marketing plan which does not cater to the masses and is usually looking for a more upscale client. These agencies charge fees for all services. This agency does more FIT’s or customized vacation packages and does add-ons to “off the shelf products”. They employ a very experienced staff, with good destination knowledge and probably some certifications such as CTA, CTC, ACC, DS, etc. These agents are true sales people. They are excellent sales closers and have outstandiong customer service skills. These agents get many referrals. Clients for this type of agency are more upscale and their priority is quality, service, and price in that order. This client wants to know the vacation they purchased will deliver for the price paid.


Saks / Tiffany’s / Rodeo Drive–
This is an agency with an elite client list. These customers expect and demand service and want only luxury vacations. Their marketing is either very narrowly focused or is word of mouth and they will limit self impose restrictions on new clients. Not everyone can do business with this agency. This is a highly profitable agency, but has a clientele that wants to be pampered and can be very demanding. 24-hour access and highly specialized concierge type services are the norm. This agency charges high fees for all their services, but clients pay it without reservation knowing their every whim will be satisfied.

Boutique –
This is the agency that specializes in one area of travel. It can be a destination such as London, or a type of travel such as musical theater or scuba diving. Quite often this agency books group travel. Since they are specialists in a focused niche they generally can charge fees for their services. They market only to people they feel are interested in this niche and rely heavily on referrals from their clients. Usually they have a very loyal clientele who can be price conscience, but are willing to pay for the expertise the agency offers. Agents at this agency are very experienced or have a passion for their niche and are quite knowledgeable about what they sell. Clients in this niche also tend to be more knowledgeable about their travels, but will be very loyal to an agent that knows their niche. Profitability in this agency is usually high. One advantage of this type of agency is that it can be effectively managed on a part time basis.

So…which are you?

Tim Richmond is a 20 year veteran of the industry and owner of Craig’s Travel in Southern California. The agency is affiliated with Nexion and TSI and specializes in customized vacation planning. The agency is 100% leisure. Email: tim@craigstravel.com Website:  www.craigstravel.com

  3 thoughts on “Hot dogs at Home Depot or breakfast at Tiffany’s?

  1. I love this analogy. I’m trying to decide if it would work on the “News to Know” page of my website. I think the public could benefit from this vantage point since so many folks appear to think that ALL travel agents do the same thing and not much better than the do-it-yourselfers. Many probably never heard or thought about niche travel or specialization and therefore are not educated enough to understand or respect agents’ expertise and experience. Please advise re: how and what permission I need to re-print the article for my site. It’s a great snapshot of the industry. Thanks for the perspective.
    BTW, my little one person operation is back and forth between Penney’s and Nordstrom with a smattering of (long-time, loyal) clients from Saks.

    Thanks,
    Barbara Stevens

    1. John Frenaye says:

      Barbara–
      You can repost it to your site, however, please be sure to give Tim Richmond proper credit and include a link back to the original source.

  2. Melissa Teates says:

    ASTA has an online course with Nolan Burris that walks agencies through considering a consultant-style business model at: http://www.asta.org/Education/content.cfm?ItemNumber=5235&navItemNumber=612

    The intro is available to non-members. Nolan has some great insights into updating your business model.

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