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The money the agency makes might not rival the
multibillion-dollar gross sales of behemoth online travel companies
such as Navigant International and others in the West, but Russo
believes that’s not all that counts.
“We don’t have to be an $80 million agency or have 50,000
clients to be successful,” he says. “Maybe in the public’s eye much
of the idea of success is money. But for me, personally, success is
working in this industry for another 20 years because I love
Success has always meant many things to many people, reflecting
differing objectives, goals and interests. From high gross sales or
fat profit margins to the personal satisfaction of doing a job
well, standards and measures of success are subjective.
While the more traditional financial measures of success will
remain, business experts say that in today’s challenging travel
market other measures such as those noted by Russo are increasingly
“Success in today’s world tends to be equated with how much
money you have, but that’s really not it at all,” says Bob
Stalbaum, president of Havertown, Pa.-based consulting firm
Strategies for Success.
“My definition really broadens the horizon for a lot of people
to be successful: Success is the progressive and timely achievement
of your goals,” he says.
Stalbaum, who has consulted with hundreds of agencies over the
past eight years, said many get caught up in the grind of daily
operations and lose sight of the real goals of success. “If we
spend all our time doing the little things, then the big things
never get done,” he says. “And those are the things that will help
you achieve success.”
Stalbaum and others note that gross sales typically what many
agencies divulge because they are privately held and not required
to reveal financial data also need to be understood in context.
“The number that matters is what you bring home not gross
sales,” says Bruce Tepper, vice president of Joselyn, Tepper &
Associates Inc. A lot of agencies have low gross sales but are
financially successful because their profit margins are relatively
high, he says.
Tepper notes many agencies’ profit margins are a slim 1 percent
to 2 percent, but specializing in an area can yield higher
“Specialization is the key because you’re never going to beat an
Expedia on price,” he says. “Let them have low profit-margin sales.
Find areas where you have an interest and where there’s a market.
And there are thousands of opportunities out there.”
Adds Stalbaum: “There are one-person enterprises, and 2-, 3-,
4-person boutique-type agencies that are doing $2 million to $5
million in business, but are working on 30 percent margins because
the products they’re developing and the markets that they’re going
after don’t have heavy competition.”
Tepper also notes that agencies are adopting new business models
that are helping drive success.
As the traditional model of commission- and fee-driven agencies
slowly fades, along with many commissions, some travel companies
are choosing “merchant models.”
This strategy essentially turns an agency into a retailer,
negotiating with suppliers for the best possible price, setting
margins and markups, and selling on price and volume.
“You don’t have big margins and you do a fair amount of
marketing,” he says. “It puts you in the same league as a
Another emerging strategy is the consultant model. “In a sense
you’re no longer in the travel business, you’re in the travel
advice business and get paid a fee for your expertise,” he says.
“You pass through all discounts, etcetera, to clients, but in turn
charge them a fee for your services.”
Stalbaum and Tepper note that as a growing number of agencies
change business models, they also are factoring additional and
broader measures into the concept of success, including customer
“Are your customers happy, satisfied and coming back?” asks
Stalbaum. “That’s a real indicator of success.”
Ultimately, Stalbaum says, “There are two ways to ensure your
success: Be brilliant at the basics and get the fundamentals for
running any business down pat.”
Once those fundamentals are in place, success then means
For Expedia, one of the largest online travel companies in the
West with gross sales of more than $5 billion last year, financial
success comes with an ongoing focus on continually meeting the
needs of suppliers and consumers.
Expedia last week reported second-quarter gross bookings of $2.6
billion, up 53 percent over the same time last year. Net income was
$41.3 million, up 106 percent over the same quarter last year.
Factors that have led to its sales success from marketing and
customer service, to suppliers and technology platforms are
continually adjusted to ensure the company is adding value to its
offerings and services.
“It goes back to a relentless focus on creating a great company
experience,” said Expedia spokeswoman Andrea Riggs. “I think that,
if you’re focusing on the customer and their needs, then you
realize what you need to develop to continue to meet their needs,
and that’s where you find your technology innovation and your
relationships with suppliers, and ultimately, your success.”
Riggs says Expedia also believes consumers will continue to need
travel agents, particularly in the luxury market where consumers
are seeking a special experience.
“We think that those travel agents empowered by technology are
going to have a real advantage and niche in the marketplace, and
there’s a real need for that,” she says.
For Russo at Travel Junction, competition from the large online
agencies has helped him crystalize his steps to success.
“It’s prompted us to become more creative,” he says. “We look
for every nook and cranny to do something value-added for our
customer. ... And creativity breeds success.”
Russo has worked hard to be successful at all components of his
business, building repeat clientele, using unique marketing
techniques, forming joint ventures and taking risks in an effort to
set his agency apart.
“Sometimes it works, sometimes it doesn’t. But that’s not
failure, it’s a learning experience,” says Russo. “Failure is
giving up; success is to keep on keeping on.”