Monday, October 18, 2004

The Travel Agent From Hell

You’re stuck in Orlando as yet another hurricane takes aim at Florida. The airport is closed and the best advice you can get is to sit tight and hang with the locals because you can’t extend your hotel reservation.

Not that it matters. Your “garden view” room actually looks out on a concrete pad that holds the dumpsters.

Congratulations. You may have the travel agent from hell.

Let me be perfectly clear about this: If you handle your own travel arrangements then you have only yourself to blame when something goes wrong. But if you put your itinerary in the hands of a professional, there’s no excuse.

I wrote about the client from a hell a few weeks ago, and I got plenty of “attaboys” from my agency colleagues. But the pendulum swings both ways, my friends.

If you are using a professional, you are paying for, well, professionalism. And the $25, $30, $40, $50, or $100 or more you do pay should be worth it. If it is not, you need to reevaluate the relationship you have with your agent.

How do you know if you’ve got an incompetent agent?

They leave you to fend for yourself. That’s what happened in Central Florida recently, when a series of hurricanes bore down on the region. One client I knew of was left in the lurch - no hotel room, no flight out - by an agent. Sure, it would have taken a little extra work to get the traveler into a hotel and rebooked on a flight. Instead, the agent pocketed the commission or fee and moved on to the next sale.

They don’t act as your advocate. When one cruise passenger inadvertently got stuck with extra luggage after a vacation - and was accused of theft - one travel agent I know let the client work it out alone. Worse, the agent called the cruise line and they said that he might be an accessory to theft. The traveler had to drive three hours to return the luggage. Thanks for nothing.

They don’t pay attention to the details. True story: One traveler I know of saved up for a once-in-a-lifetime trip to Jamaica and even splurged on the upgraded room with a fantastic view. But the hotel was oversold and when the agent found out, he did nothing - leaving the hotel guest with substandard accommodations with a stunning view of … a dumpster. Some special vacation that turned out to be.

In this day of book-it-yourself Web sites, travel agents have to set themselves apart from the competition with their service.

There are years of contacts and connections at an agent’s disposal. Even the greenest agent has colleagues; and from my experience, most agents are willing to share their connections for the mutual benefit of the client. I can’t fathom that some still believe they will survive simply because they’re already here.

A travel agent’s fee or commission is worth every penny - provided he or she is working for you. If not, then it’s time to look for someone who will.

Monday, October 4, 2004

Who's Next? A Chapter 7 Oddsmaker

Which airline is going out of business first?

No network carrier is immune to a bankruptcy filing - or a liquidation - but some are less immune than others. (And if they don’t go out of business, then they’ll at least get an extreme makeover.)

Conventional wisdom says US Airways will be toast soon. Some of the travel trade bulletin boards look like Vegas odds sheets predicting the day it stops flying. But I don’t think that calendar is in print yet.

US Airways is in a really bad situation which was brought on by a set of rose-colored glasses during their first emergence from bankruptcy. A lot has changed and I think that US Airways is not only on the right track, but it is on a strong track for survival. But the US Airways you know today will probably not exist in the post emergence world.

I see the airline emerging from bankruptcy as a solvent carrier with a low-cost model operating on the east coast and the Caribbean. It may even have a low cost - or full-service - transatlantic presence.

How many markets have their new GO Fares? More are being added almost daily. US Airways is boosting its presence in Fort Lauderdale and scaling back its Pittsburgh operations. The federal government has almost a billion of our dollars on the line and this administration does not want to shoulder that burden.

I imagine that US Airways will get a lot of help from the bankruptcy courts this time around in renegotiating its contracts. Perhaps even more encouraging is that the unions representing the various sectors finally realize that this situation is dire. For the most part, they are willing to honorably negotiate in order to save the ailing carrier.

And from personal experience, the morale of their employees is remarkably high given the situation.

So, no, I don’t think US Airways is about to fold. Who will it be?

American is a diversified monster and it still holds very profitable routes in the Caribbean and South America. United is making headway in their reorganization, but there are still some hurdles to clear. The unions do not believe in management and I believe you will see a regime change before they emerge from bankruptcy protection.

Continental and Northwest are so tight and seem fairly stable. Northwest has considerable real estate holdings in Japan. These two, considering their closeness, are also likely partners for a merger and I believe they will lead the charge to find new and unique revenue streams similar to the recent fee for phone bookings.

Could it be -- Delta?

Why yes, it could. While Delta is a relative newcomer in the “Hey-I-want-to-file-for-bankruptcy-too” club, I feel that it is in a lot worse shape than they let on. If you look at some recent Delta events, you will probably reach the same conclusion:

Its CEO abruptly resigns and parachutes into semi-retirement.

Its COO abruptly resigns to head Virgin’s effort to launch a low-cost carrier in the US.

Its CFO bailed to work outside the industry.

Its chief of customer service just bailed out for “personal” reasons.

It has lost more than $5.6 Billion since 2001.

Its low-fare spinoff, Song is not singing. Its CEO “retired” just last week.

American is also singing in Dallas, now that Delta has reduced their flights from more than 250 to less than 25 per day.

Management is betting that in one year 50 percent of its booking will come from its Web site - currently it is less than 20 percent. No odds sheets on that just yet.

Gate Gourmet abruptly stopped providing food to Delta last week but was court ordered to resume service.

Its Unions are still trying to strong-arm management and are not aware of the dire situation.

Delta, US Airways and Continental are not “known” for anything other than being domestic carriers. United has a solid transatlantic market, Northwest has a solid transpacific market, American has a solid Caribbean and South American market.

The domestic carriers are now Air Tran, Jet Blue, and Southwest - and the big boys need to realize this.

What does the future hold? I think the domestic landscape will be controlled by the low-cost carriers and the current legacy carriers will hold only a small portion of that market to support their profitable international markets. Five years from now, along with the low-cost carriers who make it (and I think some of them may fail as well) we will have United (having merged with a surviving US Airways), Continental (having merged with Northwest), and American - each with their own niche, operating their own profitable routes.

Of course, that’s just my opinion.