July 14, 2008
Carlson Wagonlit Chief: Everybody Still Travels
By Rob Carson, The News Tribune, Tacoma, Wash.
Jul. 14--Airline fares are up, fuel prices are at a record high, the dollar is down. That's put the travel industry in the tank, right?
"With all the doom and gloom in the press, you'd think we're all losing our jobs," Trettin said last week. "Most of the people in the Puget Sound area are still working, still spending money and still traveling."
Trettin's travel agency employs 42 people, including nine agents. They sold $9 million worth of airline tickets last year, he said, and he's not at all worried about the future.
"When we pull out of this slowdown, people who put their dreams on hold, they're going to go," he said. "Those dreams don't die. People still want that status trip, that family experience."
We sat down with him in his office last week to get the whole story.
OK, first things first. How do you pronounce Wagonlit?
It's actually "Vaw-gun lee," but that's not even relevant. Carlson Wagonlit was a merger of two companies, Carlson Travel and a French company, Wagons-Lits. It's an international company now, based in Minneapolis.
More to the point: Gas prices are off the charts, the dollar is down, airline fares are way up. What's that doing to the travel industry?
Everybody still travels. Our business this year is flat. I'd rather see it up, but in a down-turned economy, flat is still pretty good.
So, no major drop then? That's hard to believe, given everything we're hearing.
Travel is down overall. The economy is down and when that happens, the easiest thing to do is not take a family vacation, or maybe not take a business trip that you didn't really have to do.
Still, we're not seeing anything dramatic, especially here in the Puget Sound region. Five Alaska cruise companies operate out of Seattle. Last time I checked, the only vacancy on any of them was five weeks away.
What we did see was, at the beginning of the year, people were putting off making reservations. Now we're getting a lot of last-minute travel.
No offense, but why does anybody use a travel agent anymore? When I want to fly somewhere I just go online and Google "cheap flights." What do you have that Internet sites like Expedia and Travelocity don't?
What cruise line is the best?
What? I don't know. I don't go on cruises.
OK, what's the best luxury resort on the Baja Peninsula?
I don't go to luxury resorts either.
What's the cruise line with the top-rated kids' program? Where can you go kayaking through a tidal mangrove forest?
My agents know all that information, all the different amenities, all the different costs. Our customers come in and basically, what we do is an interview. They say what they're looking for, and we match their needs with a specific vendor.
Right, or they could go online and find the same things for themselves.
Yes, and they'd get 1.7 million results. And they might find a vendor who uses their down payment to make a mortgage payment on his house instead of making a reservation.
The dollar is way down compared to the euro. Are fewer people from here going to Europe?
A lot more people are turning toward Hawaii and Mexico. Europe is a little more expensive, but, still, the planes are full. Travel from the U.S. to the rest of the world is down 8 to 10 percent. Travel from the U.S. to Europe is down about 12 percent.
Are there any bargains out there right now?
Hawaii has some awesome bargains. Some of the hotels are giving free room nights. What's happened is that the cost of airline tickets has gone up, but the cost of rooms has gone down. So it kind of balances out.
Did the Internet cause a big shakeout in the travel agency business?
Nothing happened to the travel agency business because of the Internet. The Internet is the best friend of the travel agent industry.
Really? That's hard to believe.
From 1960 to 1995, 90 percent of all airline tickets sold were from travel agents. That rate is still 55 percent.
How could that be possible? Are you including places like Expedia and Travelocity when you say travel agents?
Of course. That's what they are. We have an online site, too.
OK, then, what about places like this one? Where there's a sidewalk outside and people actually walk into an office and talk to a real person.
Brick-and-mortar agencies? Last year we sold $9 million worth of airline tickets out of this office. I'd say that's pretty good.
Airlines don't pay travel agents commissions anymore, right? How do you make money on those sales?
From 1960 to 1995, travel agencies received 10 percent in commission from the airlines. In 1995 the airlines capped commissions. I used to work for the airlines; now I work for the consumer who walks in the door.
So you charge fees to the customer instead of the airlines. How much do you charge?
From around $20 to $50 per ticket, depending on the complexity. Places like Expedia and Travelocity have charges, too. They just hide them.
Do you think, four or five generations from now, people might look back on this period in history as a vanished, golden age of travel? A time when just about anybody could hop in a car or on an airplane and travel just about anywhere on Earth?
(Laughs) No. Humans are migratory. They'll probably be able to travel even more in the future. Travel has always been part of the human genome.
I think technology will continue to change and apply itself to that desire. People are signing up for spaceflights already. Those are $2 million apiece. People want to walk on the Great Wall and stroll through the Taj Mahal. They aren't going to give that up.
With the energy crisis, global warming and more than 6 billion people on the planet, that seems like a very optimistic view.
I see challenges, yes. But when human beings were cold, they learned how to make fire. We'll figure out some other way to power airplanes. Solar-powered airplanes, electrically powered airplanes ... I don't know. I'm not an engineer. I'm a travel agent. I'll figure out how to get you there with the technology we have now.
Rob Carson 253-597-8693
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