From left to right: Leora McClure; Andi McClure-Mysza; Joe McClure; Julie McClure; Joe McClure Sr. // © Crystal Dimond
Montrose Travel Reflects on the Industry
Andi McClure-Mysza and Joe McClure, co-owners of Montrose Travel, recently sat down with TravelAge West to not only discuss the factors that have made their travel agency successful for decades but also reflect on the current and future state of the travel industry.
In terms of industry trends, McClure said that clients are booking further out in advance.
“I don’t know if the trend will continue into 2011, but I think that there are a number of suppliers who saw weakness in early 2011 bookings and are already starting to lower pricing,” he said. “If the suppliers can give the message that prices will not increase, then I think advance bookings will continue.”
Vacations to Europe — despite this spring’s volcanic ash disruption in air travel throughout the continent — remain popular, according to McClure-Mysza.
“Now that the euro has stabilized a bit, it has helped bring Europe back,” she said. “Italy, especially, has continued to be a hot destination, and South America has been hot, too. Hawaii, however, is still a bit depressed versus where we usually are [with sales].”
At any rate, both co-owners agree that the travel industry is still very much alive if not thriving.
“It’s not necessarily that the economy has improved dramatically over the last year, but I think people have just gotten tired of sitting on the sidelines,” said McClure-Mysza. “They might have cut back a little by going on vacation for 10 days, instead of 14 days, or staying at a Marriott property versus one of The Ritz-Carlton’s properties, but people are still traveling.”
McClure added that, in his opinion, travel is going to be very profitable in the future.
“Travel is just a cool, sexy product. Therefore, the travel category will continue to grow,” said McClure. “Americans feel that they have an innate right to travel, and I don’t think the industry will fall apart any time soon.”
Relaxation doesn’t come easily to those who have an unwavering entrepreneurial spirit, which is exactly what business owners Joe McClure Sr. and his wife, Leora, discovered when they attempted retirement in 1972. In search of a pet project that would keep the boredom of retirement at bay, McClure Sr. drove around his Montrose, Calif., neighborhood until an unassuming travel agency, Montrose Travel, caught his eye. Despite the fact that the agency grossed a moderate $300,000 in sales and that the McClures knew little about the travel industry at the time, the former retirees had found their new “hobby” — owning a travel agency.
“It was a typical mom-and-pop operation back then as Joe, Leora and I were the only full-time employees,” said Nancy Bland, who celebrated her 35th anniversary with the company earlier this year. “We did it all — this was even before teleticketing, when we would issue paper tickets and stamp them with a rubber stamp.”
Within a decade, the McClures had transformed Montrose into a $5 million-a-year business. It was soon time to give retirement another shot and, in 1990, the second generation of McClures took over the family business.
“The deal that my sister Andi, my wife, Julie, and I made with my parents was a pretty good one,” said McClure Sr.’s son, Joe, the current president of Montrose Travel. “We all love my folks dearly, and we are a very close family, but we knew that we could never work [with our parents]. The arrangement was that we would give them money for the rest of their lives, as long as the business was doing well and that they would stay out of our hair. If the business were to fail, they would take it back, and we would go back to working in corporate America.”
Fortunately, for Montrose’s current 150 employees and 650 independent contractors, that never happened. In fact, the family-owned business has expanded exponentially by wholly owning four office buildings in Montrose, Calif., and generating $115 million in annual gross sales. And, in the past 20 years, Montrose has managed to keep a debt-free balance sheet as well as never having to lay off a single employee due to budgeting issues.
“My parents taught us to grow out of a positive cash flow and to never have debt,” Joe said. “If we can’t pay for it, we don’t buy it. We investment-spend to an extent with bringing in bodies, but we don’t run after the rainbow.”
Even during tough times, such as the airfare commission caps in the mid-90s and the post-Sept. 11 decline in travel sales, Montrose has maintained a business philosophy of “growing its way out” of challenging times.
“By cutting your way out of a problem, you mortgage your future and, when things change, you don’t have the infrastructure to grow with it,” he said.
While many agencies didn’t survive the most recent economic downturn, Montrose’s owners chose to address the challenge head on. They gathered their workforce to explain a radical recession strategy to them — in order to avoid layoffs, all three owners would give up 100 percent of their salaries and all Montrose employees would earn 10 percent less for 90 days. If certain metrics and goals were achieved, everyone would get their money back at the end of the three-month period. The proposition was so well received by the staff that they actually gave the owners a standing ovation.
“To have that kind of positive reaction after telling our company that they will lose 10 percent of their pay made me feel incredible,” Joe said. “‘This is the army that I want to go into battle with,’ I thought.”
The well-received strategy resulted in increased Web traffic, call volume and transactions, which brought in more than $3.3 million in new business. And, not only did the agency avoid a round of layoffs, it was actually able to bring on new employees.
Montrose’s strengths, however, extend beyond bold strategies and a dedicated workforce. According to Joe, building a business that is as broad as possible, one that doesn’t rely on a single niche, has helped keep the company’s cash flow stable over the years. The agency’s eight operating divisions (Corporate Travel; Groups, Meetings and Incentives; Vacation Travel; Air, Car and Hotel; Romance Travel; Loyalty Rewards; Direct Access, an entertainment division; and the MTravel home-based agent division) have kept the company diverse and resilient over the years.
About one-third of the agency’s business comes from its Loyalty Rewards segment, which continues to grow as 23 million bank, credit union and association members use Montrose’s credit card rewards and private-labeled discount vacation programs. One of the reasons why its Loyalty Rewards division has been such a huge success is that its call center works to establish relationships with cardholders, giving clients a direct line and an e-mail address for future transactions. According to Joe, one in five of these customers calls Montrose for a traditional booking.
“With nobody out knocking on doors to develop new business, people are coming to us — we have more business than we can possibly handle right now,” he said.
Not only was 2009 a record-setting year in sales for Montrose, this year is proving to be even more profitable. As of July, sales were up 17 percent in comparison to the same time last year, amounting to roughly $75 million in gross sales through the end of July, Joe said.
Montrose’s home-based agent and independent contractor division, MTravel, is also reporting a remarkably successful year.
“MTravel has grown by light years. We grew our preferred supplier sales by 73 percent over last year,” said Andi McClure-Mysza, president of MTravel. “This was when everybody else was down by about 40 percent. Part of that growth was due to bringing in new agents, but it also means that people are still traveling.”
The agency tends to see little staff turnover as nearly 60 percent of its employees have been employed with Montrose for five years or longer, and 37 percent have been on staff for at least 10 years. On a recent office
visit, all of the employees that TravelAge West interviewed had nothing but praise for their workplace.
“I wouldn’t have stayed here for 15 years if this wasn’t a fantastic place to work,” said Maria Saenz, who works in the Romance Travel division. “As far as I’m concerned, I’ve found a recession-proof business that I can utilize my skills and talents in.”
Bland, Montrose’s longest-serving employee, agrees with Saenz.
“It’s the feeling of being part of a family that has made me want to stay with Montrose. For example, when it came time to adopt our daughter, it happened to fall during the prime season for everything at work,” said Bland, business development and key account manager of the Groups, Meetings and Incentives division. “They told me not to worry about anything at the office and that this would be the most important thing that would come into my life. With that kind of support over the past 35 years, I would never think of wanting to go anywhere else. I feel like an adopted child of the McClure family.”
The owners have even gone as far as giving their employees loans and helping their staff put down payments on their houses.
“We do whatever it takes to keep quality people because they are the ones who have really built this business,” said Joe.
The company continues to expand its workforce in several areas and is actively looking to hire leisure travel agents, corporate travel agents and a Loyalty Rewards relationship manager, among other positions.
“We ask for hard work in return, but we throw great parties, offer awards and give our employees lots of recognition. For example, in October, when the temperature in California might still be in the 70s or 80s, we import 5 tons of snow to our parking lot, and all of our staff and their families come in their snow gear for a company-wide family party we call, Snowpalooza.”
Also helping retain employees is the Presidents’ Club program for which agents who sell $1 million in travel in a single year qualify. Club members get a $2,500 bonus, an awards ceremony with a trophy and a weekend trip for them and their families. Past trips include cruises with Princess Cruises, Carnival Cruise Lines and Royal Caribbean Cruise Lines, as well as stays in Palm Springs and Huntington Beach, Calif. Sixty agents made the cut last year, which means that Presidents’ Club membership is at an all-time high.
“We have this burning desire to be the best — to win — which separates us from other guys,” said Joe. “We will continue to grow regardless of what happens. We won’t get complacent, and we won’t accept the status quo.”
This year, Montrose Travel won TravelAge West’s Trendsetters Award for having the Best Recession Survival Story or Strategy. The agency has been in Ensemble Travel Group’s Circle of Excellence since its inception in 2005.