Travel company avoids travails

By the end of 2008, Montrose Travel had a choice: Do nothing and let the recession destroy its bottom line, or take a proactive approach and begin to find ways to keep the company afloat.

“We as a company needed to decide whether to act rapidly and take action or to put our heads in the sand and see what was going to happen,” said Montrose Travel owner Julie McClure.

Montrose Travel’s upper management decided to enact a business survival plan drafted shortly after the Sept. 11, 2001, terrorist attacks — an event that all but crippled the travel industry, McClure said.

The recession was beginning to have the same effect.

Montrose Travel’s business survival plan set in motion at the beginning of 2009, when the recession was at its peak. The plan involved ramping up the company’s advertising campaigns, cutting costs, setting daily and weekly sales goals and cutting salaries by 10% for three months (with McClure and company co-owners, brother Joe McClure and sister-in-law Andi Mysza, receiving no pay).

An aggressive marketing campaign, dubbed “Operation Bunker Buster,” involved running 29 full-page newspaper ads, mailing 75,000 direct-mail pieces, issuing 17 press releases and sending more than 500,000 e-mails to former and prospective clients.

For their efforts, the company was recently awarded the industry trade TravelAge West’s Trendsetter Award for Best Recession Survival Story or Strategy during the magazine’s 2010 Wave Awards in Los Angeles.

The company won a similar award in 2002.

The good news was, because suppliers slashed fares — some from 40% to 50% — Montrose Travel was able to advertise prices not seen since the mid-1980s, said McClure, including fares for cruises and tours.

However, the company was now making less commission per transaction. A trip that would normally sell for $1,000, for example, would earn the company $100, based on 10% percent commission. If the price of that trip were cut 50%, the company would now have to sell two trip packages to generate the same amount of income.

“Doing more transactions isn’t bad,” Mysza said. “It’s just that we’re working that much harder to generate the same or more income; that’s the difference. All of our agents’ compensation is based on this [10%] commission figure. I think everybody had to work smarter.”

The company relied on an already conservative and diversified business model, McClure said. Because the company comprises six divisions, Montrose Travel can easily stay afloat even if one division is performing poorly, she added.

Associates were also instructed to reach out to potential and former clients, from making cold calls to approaching friends and acquaintances and explaining the value of a travel agent, said Montrose Travel General Manager Rhonda Holguin.

Although the company saw a 15% to 20% decline in business within the first 30 days of initiating its business plan, by the end of the three-month deadline, the company saw improvement. Sales have increased 10% in 2010, McClure said. Independent contractor sales volume grew by 53%, and the company hired 13 people.

“The sales teams are challenged to go out and capture more business,” Holguin said.

Agents were also encouraged to cross-sell between the company’s divisions.

“A lot of people were willing to work together in order to make sure that everyone retained their jobs,” McClure said. “Everybody shared a little bit of the pain, but then everybody who was doing their jobs also shared in the recovery at the time.”