This Is The Single Greatest Time To Start a Travel Business… Really!
by Jason Block, CEO of Travel Quest Network
Let’s get two things clear from the get-go.
1. That headline is not a joke. This is the single greatest time to start a travel business.
2. A great business is not built overnight, and a great travel business is no exception.
2019 was one of the most successful years for the travel industry on record. 2020, undoubtedly the worst. Reductions in travel demand are genuinely hurting the travel advisor community, and sadly many agencies may not be able to survive. Research suggests as many as 70% of agencies may close their doors, leaving thousands of great advisors unemployed and searching for what comes next. Many will leverage their skills and experience to become independent advisors, a trend we’re seeing unfold, while others will retire or look for employment in another industry.
There is a silver lining though if you are not yet in the travel industry but are thinking about joining what is without a doubt the most exciting and flat-out fun industry on the planet. There is a vacuum, an opening in the market for new entrants, the likes of which we’ve never seen.
Without getting into a lot of psychobabble, people’s decisions are impacted by something called recency bias, a cognitive bias that favors recent events over historic ones. Think, a lawyer's dramatic closing argument that sways the jury, despite all of the evidence presented in the trial.
The negative experience of the current COVID crisis is a bias steering people away from starting a travel business. On the surface, it makes perfect sense. There is much less travel happening right now and it isn’t even clear when there will be. So, why in the world would any sane person start a business in that kind of market environment?
I will tell you, but before I do, remember that when you start a business, any business, you must build it to operate in a future market, not the market that exists today. The gutters are littered with failed businesses that solved the problems of yesterday (or even today), not tomorrow. When you start a business, you need to build it with an eye to what the market will need and what the market will look like when your business is fully established, not what it is today.
Most industries are dynamic, always moving, and travel is definitely one of them. Customer needs, market players, and travel demand will not be the same tomorrow as it was yesterday. The world moves, so if we want to win, we aim for where the world will be, not where it is. I believe that by the time you lay the groundwork to establishing your new travel business, the worst will certainly be over, and we may already be experiencing what I believe will be a renaissance in travel.
You have time to get yourself established, but the biggest and best market entry window, maybe that we’ve ever seen, will start to close as more people realize what is happening.
Here are five factors that tell me this is the single greatest time to start a new travel business:
Travel Advisor Vacuum
Thousands of experienced advisors will ultimately exit the industry at the hands of the pandemic. This has been devastating to so many, but an objective viewer cannot ignore the fact that there will simply be far fewer advisors next year than last year. Worse, many that remain continue to be fearful of marketing, or even suggesting the notion of travel, for fear of alienating valued clients. I believe that this is the pandemic version of the cardinal sin of selling out of your own pocketbook. In effect, many advisors are themselves fearful of travel and aren’t willing (or able) to open their minds to the possibility that many people are not afraid, but that’s another story entirely! I believe those that have never stopped being a travel advisor, those that continue to talk about travel, even amidst the heights of the fear, will emerge stronger and more successful. Sadly, this is a small minority of advisors today.
Shhh, People Are, In Fact, Still Traveling
It is often reported and widely believed that the travel industry has ground to an absolute halt. I believe this is largely due to media reports, which tend to have an emphasis on corporate travel and the almost salacious quality of the reporting on the cruise industry. Make no mistake, volumes are down in a BIG way, however, the sharp decline is most acute in corporate travel, cruise travel, and in Europe after the closure of Europe to most visitors.
Despite all of the travel bans, CDC guidance, and State Department warnings, people are traveling. You can argue that they shouldn’t, that traveling is only perpetuating our inability to contain the virus, but the facts are the facts. People are traveling. Analyzing TSA air passenger data, we’ve been steadily climbing since the low point in April (where passenger counts totaled 4% of 2019 volumes) to now well over 30% of 2019 (remember too, 2019 was a record year). This data doesn’t even factor for a large increase in non-air travel in recent months. Shhh, people are traveling.
Many destinations that are open are reporting hitting occupancy limits, and those limits are steadily being raised, albeit slowly. Over the last two months, we have seen booking activity increases week over week in our businesses, including increases for departures still this year! Shhh, people are traveling.
When the cruise industry is allowed to re-open, that will be the real beginning to the road back. Corporate travel, on the other hand, will have a much, much slower path to recovery. Corporations are using the pandemic as cover to slash expenses and boost profits. Understandable. Once companies start losing sales to competitors who are willing to call on clients in person, we’ll begin to see large increases in corporate travel, but that is likely to take several years to fully play out.
Corporate travel is indeed ground to a near-absolute halt. Cruises are not departing. People are traveling, when, and where they can. As more destinations slowly open, people will travel.
Pent Up Demand Is Off The Charts
When the floodgates open, and they will open, many customers will find their long-time local agency and their favorite advisor just aren’t around anymore. Others will discover that their favorite advisor has gone into business for themselves as an independent agent, but they don’t know how to contact them. This spells big opportunities for new client relationships.
There are lots of statistics and surveys to suggest that pent up vacation travel demand is massive, but I’ll just suggest that you talk to people you know. Who hasn’t had a conversation with a friend or loved one that has complained that they “cannot wait” to go somewhere… anywhere! Case closed. Some things don’t require science, just knowing people, and I can promise you that the level of pent-up travel demand is bigger today than at any point in modern history.
Use this window to establish your travel business and get in on the coming gold rush.
Virtual Working Is Here To Stay
This is a two-part special bonus.
1. Most office workers are working virtually today. Many of them will continue to do so in the future. You may even be working for a company currently that has, or will, adopt a permanent or semi-permanent virtual work policy. If so, congratulations, you’ve just received an amazing gift. There is simply no better time and no better way to start a business than to do so while someone else is paying you to do it, sorry boss. Do your job and do it well. But look, we all know that working virtually offers huge opportunities to carve out time to start something new.
2. The corporate motive for profit-seeking is impacting our industry here too. As companies salivate over cutting massive real estate costs, virtual jobs will become far more commonplace even after the pandemic is long behind us. We are on the eve of an explosion of a relatively new phenomenon. Pre-COVID there was a small, but growing movement of workers that I call Nomadic Workers, or Professional Travelers.
While traditional business trips may be significantly curtailed for years to come, a new breed of highly paid virtual workers will emerge. They call the world their office and move from place to place, usually every 2-4 weeks. Working local US time and engaging in tours and local culture on their off-hours. If I were starting a new agency today, this would be my selected niche. Lay the foundation now. Build a program for people who want to travel as a lifestyle while working virtually from anywhere they choose. You won’t be the first into the space, but I don’t think it is too late to carve out a great niche for yourself. It’s definitely not the only attractive space for new entrants, just one of the best.
Terrible Customer Experiences Amidst The Pandemic
The terrible COVID-driven customer service levels experienced with online travel agencies (OTAs) and wholesale clubs will be a lasting memory in the mind of the traveling public. This will be compounded by traveler’s desires to understand the intricacies of travel insurance rules and supplier cancellation policies well after the pandemic is declared over. It will be very difficult for OTAs to clearly explain these insurance options and cancellation policies, and demand for advisor services will rise significantly compared to previous years. Advisors, new and experienced, are in a strong position to leverage this past pain and the future confusion over more complex options into new client relationships.
The Single Greatest Time To Start A Travel Business
Great businesses aren’t built overnight. You have time to build a fantastic travel business before the coming gold rush starts. Now is the time to lay the foundation, to become known in your network as a travel expert, to establish your client generation campaigns, and to start building those client relationships.
A final word: don’t waffle, the window will close soon and you’ll miss it.