When It All Goes Wrong

My wife’s aunt was in Thailand on Dec. 26, 2004, the day a massive tsunami killed over 5,000 people throughout Asia. When we first heard about the disaster there, we were only mildly concerned about her. As time went on, however, and we hadn’t heard from her or anyone else on her trip, we began to worry. We didn’t have a copy of her itinerary, or any way to get in touch with her. Nobody even knew the tour operator she was traveling with.

As it turned out, she was fine she had left the coast the day before. The tour operator had indeed tried to contact her daughter (the only contact number they had for her), but her daughter was traveling too and didn’t get the messages.

Even though everything worked out for the best, it made us all realize that any trip, to any place, can suddenly become more complicated than one could ever imagine. Just taking a look at today’s headlines confirms this: Sometimes things go very wrong.

This year alone saw terrorist bombings in London and Cairo, devastating hurricanes in the Caribbean, Mexico and the southern U.S. and a catastrophic tsunami in Asia. Along with these global events, the health issues and situational circumstances of individual clients routinely cancel or alter trips, leading to potentially disappointed customers.

In light of the increasingly uncertain nature of travel, all agents should be familiar with basic crisis management tools in order to better serve their clients, as well as manage their agencies. Understanding topics like travel insurance, medical evacuation services and disaster planning are no longer a luxury to agents, they are essential to operating a successful travel business.

Travel Insurance Boot Camp

It’s 9 a.m. on a Saturday morning in June, and over 30 agents are gathered in a conference room in a Southern California hotel. What sexy topic would get a classroom full of agents to show up early on a weekend morning? Nothing less than an ASTA-sponsored seminar titled “Understanding Travel Insurance.”

Perhaps it’s less surprising that the agents have given up a weekend morning when you consider the growing popularity of travel insurance. According to the U.S. Travel Insurance Association (USTIA), Americans spent over $1 billion on travel insurance last year. The USTIA estimates that 30 percent of leisure travelers purchased insurance last year, up from about 10 percent before Sept. 11.

The USTIA also estimates that travel agencies sell about 35 percent of all travel insurance policies, with tour operators and cruise lines selling 40 percent. So it’s certainly in the companies’ best interest to educate the travel industry about their products, and at an average of 20 percent commission on the policies, agents have plenty of reason to learn more too.

“When I first became an agent, I found talking about travel insurance to be a little uncomfortable,” said Stu Rutkin, an agent at Away to Travel in Marina del Rey, Calif., and the seminar’s moderator. “Why is it uncomfortable? Well because you’re talking to clients about things that can go wrong. And here you are planning a great vacation, but first we have to talk about things that can go wrong. Yet it’s real important to do that because there are certain problems and liabilities that can come up if we don’t.”

Present at the ASTA seminar are representatives from four major insurance companies, and from the outset, it is clear that they have their work cut out for them.

“There are a lot of key terms, key concepts and a lot to know about this product,” said Suzanne Lustig of Access America. “You can’t know everything about it, nor should you. You are a travel agent, not an insurance agent.”

Rutkin and the panelists offer four main reasons for agents to sell insurance: for the client’s peace of mind; to help the client protect their investment; because agents can potentially be found liable if they don’t offer it; and finally, because it’s a way to increase an agency’s profits.

“In terms of liability, it is almost essential that every travel agent at least offer insurance to their clients,” said Mark Torpey of M.H. Ross Travel Insurance. “Because if you don’t tell your client that something could go wrong, and they don’t buy insurance because you didn’t offer it to them, and they realize a loss because of that, they can potentially come back and sue you.”

Torpey went on to say that every agent should at least make it standard practice to have clients fill out a waiver form indicating that they are denying insurance as a way to protect them from liability.

Lustig then spoke about the difference between supplier waivers sometimes called “bad hair day” policies (allowing clients to cancel for any reason whatsoever) which generally offer credit back to the client, and insurance policies that usually offer the client money back.

“Credit back was acceptable for the first few years after 9/11, but it’s not so good these days. Your clients want their money back,” she said. “That’s something to keep in mind as you compare policies.”

Naturally, one of the most asked about features of travel insurance was trip cancellation and trip interruption. The panel agreed that most cancellations are due to medical conditions either those of the traveler or someone in their family.

“It can be something as simple as having a child with a cold and the doctor saying he or she can’t travel,” said Pam Ross of TravelGuard. “And that is an acceptable reason to cancel. You really have to look at the whole scope of factors.”

Not covered would be fear of flying, changed business plans and, in some cases, an elevated terrorist threat, among other things.

Another important concept and perhaps not surprisingly one of the most discussed at the seminar were the procedures surrounding pre-existing conditions. While this is a complicated issue, and something that each agent needs to research on his or her own, one company, CSA Travel Protection, offers a slightly different approach than the other companies in this regard.

Unlike most insurance companies, CSA allows for pre-existing conditions from the day final payment is made, meaning there is no waiting period for the consumer. This also means that the agent can complete the sale of the insurance at the same time as the sale of the trip, instead of having to go back to the client later and address their insurance needs.

Another innovation at CSA is the addition of identity theft protection as an automatic part of their policies. This coverage even extends beyond the client’s return home.

“My identity was stolen a year ago, on a trip to Scotland,” said Les Maine, president of CSA. “While the banks may take care of all the financial liability, in terms of inconvenience, let me tell you it’s a mess.”

Finally, all agents should seriously look into taking a seminar on insurance, whether it is sponsored by ASTA or another organization. Also there is an independent Web site (www.insuremytrip. com) that enables agents to do side-by-side comparisons between policies.

Medical Evacuation Services

While travel insurance should be a standard part of all trip planning, there is another type of service that offers additional protection for clients. Clients who want the added security of medical evacuation coverage have several companies to choose from (see sidebar), and one of the biggest is AirMed International.

“One of the things that separates us from a traditional travel insurance plan is that AirMed offers a membership program that protects the traveler for an entire year. It’s not centered around a particular trip,” said Captain Jeff Tolbert, founder and CEO of AirMed. “Also, we don’t have any financial limitations on the service we provide. It truly is ‘unlimited, worldwide.’ Whatever it takes.”

Tolbert explained that while many travel insurance policies will get clients to the “nearest appropriate facility,” AirMed flies clients to the medical facility of their choice, no matter where that is.

“If a West Coast traveler gets hit by a bus in the Caribbean, most insurance policies will only get that traveler to San Juan or Miami,” he said. “Our program will get that patient home. Or to the specialty hospital of their choosing.”

AirMed was started in 2003 by Tolbert, who was the founder of rival MedJetAssist in 1987 before leaving that company. According to Tolbert, he got into the business because he saw firsthand the personal repercussions caused by a medical emergency. A family friend had a son who was injured while working in Afghanistan, and the family had to spend nearly $150,000 to get him back home.

“So I went from feeling great about the medical evac, to talking to his dad who’ll now have to come out of retirement to pay for the service,” Tolbert said. “At that point, we said we really need to create something that can be available to people out there.”

AirMed’s services are used by major corporations, government agencies, institutions and over 1 million individual travelers. The company performs more than 400 evacuations a year, including many in exotic parts of the world where medical services are not readily available. (As of press time, AirMed was providing evacuations for survivors of Hurricane Katrina.)

“In the last 60 days we’ve done evacuations to or from Singapore, China, Saudi Arabia, Laos and more,” said Tolbert.

Because of the often complicated nature of medical transport, one of the major selling points to this type of insurance is the amount of savings it could potentially provide to clients.

“I had a client who went to South Africa and fell and broke his leg. It cost him close to $80,000 to be repatriated home!” said Kathy Sudeikis, ASTA president and a travel agent based in Mission, Kan. “When I learned about AirMed, I jumped at the chance to offer it to clients. Having that kind of protection for a year, with one payment, and including family members, is a great safety net.”

A membership in AirMed’s service is $250 for an individual and $350 to cover a family (two adults and up to five children under the age of 23).

“It’s just a tremendous value and peace of mind when you could be looking at putting down $50,000 or more out of pocket,” Tolbert said.

Another selling point is that AirMed owns its own fleet of specially equipped, custom-designed planes and, unlike some companies, they are used solely for medical evacuations and are at the ready 24 hours a day, seven days a week.

“The typical air ambulance in the U.S. is small. It doesn’t have a standup cabin and it is totally reliant on ground support while refueling. We use the Hawker, which provides a much better patient-care atmosphere,” Tolbert, a pilot himself, explained.

For agents, AirMed offers 20 percent commission. In addition, they will enable agents to link directly to their Web site and get credit for any sales that come as a result.

“We market to travel agents and even to tour operators. We also have a preferred supplier relationship with Travelsavers,” said Fred Filippi, senior vice president of marketing and a former president of Grand Expeditions’ luxury division.

“Agents can make substantial money on this and also provide their clients with the coverage they need,” Filippi said. “It’s unfortunate that the clients’ focus is often on ‘Hey, can I get my money back if necessary?’ They don’t even think about being half way around the world and asking, ‘Will I be able to get myself back if necessary?’”

Crisis Management Basics

Okay, so you’ve done your research and provided your clients with travel insurance and/or a medical evacuation service. But what do you do when you wake up one morning to find your clients stuck in a hot zone? Do you have a disaster contingency plan in place?

Across the industry, agents, wholesalers, CVBs and others have realized by hard experience that the time to plan for a tragedy is before it happens.

“We consider formalized crisis management to be a critical part of our operational planning, and we spend a significant amount of time and money supporting this effort,” said Keith Baron, vice president of worldwide operations for Tauck World Discovery.

Tauck spends about $100,000 a year on crisis preparation and training for its tour directors and staff.

“I think the agent community ... can take comfort in recognizing that so much of our planning is focused on crisis contingency,” Baron said. “It is something that is hard to put a price tag on, but it that pays off in multiples if it’s ever needed.”

When Hurricane Emily hit the Cancun area in July, it had the potential to throw the city into chaos. Instead, all reports praised the calm professionalism of the tourism industry during the crisis. Jorge Vignet, of the Cancun Convention and Visitors Bureau, credits the organization’s hurricane readiness plan for their success during the disaster.

“We worked for a long time getting everyone in the area to understand their part in the plan so we would be prepared,” Vignet said. “It was very gratifying to see it work when it had to.”

While you might think disaster plans are more appropriate for wholesalers and CVBs, Suraj Zutshi, a travel agent from Reno, Nev., might disagree. He was planning to lead a group of 23 clients to Sri Lanka and India just as the tsunami hit those countries. Zutshi was facing a huge financial loss for his business.

“One of the things I’ve learned in 32 years of experience is to never make rash decisions and judgments,” Zutshi said.

He started contacting people in the area to assess the situation, as well as calling his group and sending out a letter.

“I assured them that I was in constant touch with Sri Lanka and South India and that I would postpone the trip if need be,” he said. “I was up in the middle of the night constantly talking to Sri Lanka and South India and not just to people in the tourism business.”

Ultimately, only four clients decided to cancel, and all four have since signed up for his 2006 trip.

“I refunded all of them in full even though I could have charged them a penalty,” he said. “The PR gained is worth a whole lot more than the $500-per-person penalty.”

Now Zutshi finds himself in a familiar situation he has a group of 18 clients that were planning on visiting New Orleans in April. Fortunately, Zutshi has his earlier experience to fall back on.

“I took out the same letter and sent out a revised version,” he said. “Again we are looking at alternatives and not saying that we will cancel the trip ... Besides, I think going back to New Orleans with a group will probably be the best thing we can do for the Big Easy.”

In dealing with disasters, agents can also find a variety of helpful tools through organizations like ASTA. That group has disaster management materials, sample forms that promote travel insurance, updates from the Centers for Disease Control and up-to-date State Department warnings.

“If regional ‘trouble’ occurs, as with Hurricane Katrina, we will often consolidate information to help members communicate with affected customers,” said Kristina Rundquist, director of communications for ASTA.

Finally, agents should encourage clients themselves to take a few precautions before a trip. Some ideas for clients to consider:

-Leave a detailed itinerary with several family and friends back home.
-At the beginning of a trip, designate an emergency meeting place.
-Travelers should always have multiple copies of their passport, plane tickets and other important documents, including prescriptions.
-Keep important medications with you whenever possible.
-Rent or take a cell phone. (Although keep in mind, it might not work.)

Every agent wants their clients to have a successful trip, but the time to help that happen is before something goes wrong. As always, a bit of planning and education go a long way in preventing your clients’ dream trip from becoming a nightmare and helps you to provide the level of service that makes for return customers.