Your Travel Dollars Could Be At Risk!
It was with mixed feeling that I heard the news recently that a major travel company serving the lifestyles community had turned off its website and shut its doors. I have mixed feelings because on the one hand when a competitor goes out of business it helps us as we may pick up some of their business. On the other hand, when a number of companies go out of business in an industry, it can be a forewarning of trouble and change in that industry. All things considered, I would prefer that all of my competitors were doing well, because when my competitors are doing well, we’re doing great!
The sad part is that this company was not a startup or a fledgling enterprise. They had been in business for approximately 25 years. Many of you may also recall that another leading travel company serving the lifestyles community went into bankruptcy a year or two ago, after an equally long run in business. What’s happening? The market is changing at the same time that the industry is experiencing a slow down brought on by the high cost of travel, in particular airfare, and the general slowing of the US economy which has consumers postponing travel, or choosing less expensive travel options. In due course the economy will rebound, and air travel to exotic and erotic destinations will again be on the increase.
But why have two well established travel companies floundered? Wouldn’t you expect those companies to be able to weather a slight economic hiccup? You would, except that the travel industry is also changing. A major change is happening that could have significant ramifications for travelers.
The barriers to entry in the travel business are falling. Anyone can now open a travel website and be up and running in the travel business for a few thousand dollars. I know of two new “one man show” competitors who have entered the lifestyle travel industry in the past few months. Now don’t get me wrong. I’m a staunch free market supporter and welcome competition. But there are two consequences to these new competitors. First, with the lifestyles market there is a very finite number of resorts and room nights, so these new competitors take business away from other companies in the business. Second, the companies in the business must spend more of their revenue marketing their services. This means there is downward pressure on revenues and increasing costs. The result—some of the companies with high overhead or a limited capital base (including these new companies) don’t survive.
So what you say. Why is this important? It’s important because your money may be at risk. At a recent show I was talking with a vacationer who arrived at a very popular resort after having paid for his vacation in full with a travel agent, only to find that the money had not been paid by the travel agent to the resort (you would recognize the name of this travel agent if I told you). Unfortunately this traveler had to pay the resort, and ended up paying twice for his vacation. Now how pissed off would you be if this happened to you?
For the struggling travel agent it is very tempting to use customer deposits for operations and I have seen companies do just that, thinking that they will make enough money off of future sales to cover the money they “borrowed” from the customer. The problem is, very often they don’t and it ends up in a vicious cycle of borrowing from Peter to pay Paul.
What should you do? Make sure that your travel agent puts your money into a trust account and doesn’t use that money to pay operating expenses. At Dream Pleasure Tours every dollar paid to us by a customer goes into a trust account, and from the trust account the money is paid directly to the resort. It’s as simple as that. We operate our company off of our profits, and keep the customer’s money safe in a trust account, just like an attorney’s office.
We’d obviously like you to do business with us and we’ll do everything we can to get your business. But we know we won’t get every customer, so if you don’t book with Dream Pleasure Tours, ask the question. “Is my money being held in a trust account?” If the answer is yes, ask for proof. If the answer is no, hang up and book with someone else, or you too may find yourself paying twice for your vacation.
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