USTOA Execs Discuss 'Worst Year Ever’

Tour companies show ability to withstand challenge

By: By Kenneth Shapiro

Tough Job in Tough Times

Charlie Ball, president of Princess Cruises & Tours, is the immediate past chairperson of USTOA. I asked Ball how he felt knowing he was chairperson during one of the most difficult years in the history of the USTOA, and what he learned from the experience.

“I was certainly distracted by my own business’ issues, so I came to appreciate the work that Bob and his staff does. I think I get some credit for being chair that I don’t deserve because Bob really runs a tight ship. I think he has been very organized and acts as a great gatekeeper for a lot of information we can use.

“Also, the members of the board have been stepping up in recent years and have done a great job as well. I think where we are today versus where we were maybe five years ago, it’s a much more dedicated and broad group of people. So as chair, I feel guilty taking too much credit because they do a lot of the work.

“My experience has been a good one. This job has been an honor, but it has also been very fulfilling just to see that the group has become a much more engaged group of people. I think it’s probably actually easier to have this job now than it was a few years ago. There was more work for the chairperson then and now it’s a very strong team.”

 

USTOA Execs Discuss 'Worst Year Ever’ // (c) 2009

From left to right: Bronwyn Wilson, Australian Pacific Touring; Bob Whitley, USTOA; Charlie
Ball, Princess Cruise & Tours; John Stachnik,
Mayflower Tours; John Hanratty, Travel
Impressions; Jerre Fuqua,
TUI Travel-Expeditions

Every year, during the United States Tour Operators Association (USTOA) Annual Conference & Marketplace, held this year at The Fairmont Banff Springs hotel, in Banff, Canada, the officers and board hold a press briefing. This year the mood in the interview room could best be described as “cautious relief.” Despite experiencing one of the worst years in the organization’s history, the executives clearly felt relieved that a larger calamity had been averted.

The Fairmont Banff Springs Hotel // (c) 2009

The Fairmont Banff Springs Hotel

“I am probably the most surprised at this conference that a USTOA tour operator did not go out of business this year because of the economic climate,” said Bob Whitley, USTOA president. “I admire the business acumen that has led companies to make the cuts they needed to make. Here we are in late December — and traditionally tour operators in financial difficulty go out of business in September and October — and our tour operator industry in America has survived this major, major downturn.”

Whitley said he was fully prepared for a major bankruptcy. Given the economic conditions of the past year, USTOA executives at the annual conference expressed surprise and relief that not a single member went out of business despite what they are calling the “worst year ever” for the travel industry.

“I’ve had so many sleepless nights this year, worrying about the status of our industry. I had all the paperwork ready in case a member went down, and fortunately we never had to use it,” he said.

He went on to say that many tour operators are reporting a surge in business that makes him even more optimistic.

“I truly now believe we are going to make it,” he added. “Our industry is resilient enough and Americans are going to take vacations.”

Other board members echoed Whitley’s remarks and reported positive signs for the coming year, with a few saying that 2010 could even rival the highs of 2008. Despite the general optimism, there was still plenty of caution.

“I think it’s going to take two to three years to see the highs we experienced in 2007,” said John Stachnik, president of Mayflower Tours and chairperson of the USOTA. “While we see the ship turning at sea, and we’re pretty excited about it, it’s still early.”

USTOA board members said a major challenge for 2010 will be pricing and yields. While traveler numbers are coming back, prices are still far below what they have been in past years, which means revenue is down and the industry remains distressed.

“The good news, however, is that with leisure moving ahead of business travel, from a negotiating standpoint, we’re in a better position to work with our partners to correct some of the pricing,” said Charlie Ball, president of Princess Cruises & Tours and immediate past chairperson of USTOA.

As more consumers start booking trips, tour operator executives expect to see greater air capacity and expanded tour itineraries, and travel agents will continue to be the main distribution channel for tour company productss.

“We still believe the travel agent distribution system is the way to go,” said Whitley. “I think all our members would agree that agents are a major source of income and that is the way to go.”

When asked if the board members viewed the extremely competitive pricing of cruises as a challenge, several responded that they saw positive results of the cruise lines’ strategy. Not only are prices keeping people traveling — and therefore purchasing pre- and post-cruise tours — but because prices are low, many travel agents have shown a renewed interest in selling packaged tours.

“The discounted prices of the cruise lines has also greatly increased the willingness on the part of travel agents to cross-sell from blue-water cruising to tours, because they also have to make a living and cruise commissions have been absolutely hammered,” said Richard Launder, a member of the USTOA board of directors and president of TravCorp USA.

“I look at that cruise pricing as a stimulus plan,” said Paula Twidale, a board member and executive vice president at Collette Vacations. “People weren’t traveling, and the purse strings were pulled tight, and it was a way to get people interested in traveling again. It can’t last forever. The good news is that people are traveling and we see prices going back to some form of normalcy.”

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