As CEO and founder of your travel company you are going to be making tough choices in the face of adversity. These decisions will impact the short-term bottom line and have consequences for years to come.
The travel business is fluid, always changing. Your customers are traveling, coming and going from homes to a destination and back. Natural catastrophes, personal customer tragedies and travel supplier partner financial insolvency are a few unfortunate scenarios you are going to run into over the lifespan of your leadership at the helm of your travel company.
What you decide and how you act in the face of a high-risk situation ultimately will determine the fate of your business.
I experienced two possible fatal business situations while running our ski travel OTA. The first was in the early travel startup years when we took college students to Vermont ski resorts via buses. A bus loaded with students, slid off the road, starting to flip over. The bus never ended up flipping over, everyone got out and no one was hurt. We ultimately were just lucky. I remember the experience like it was yesterday. I was in the front seat of the 2nd bus behind the first and watched the whole thing unfold.
The second situation involved a natural catastrophe that had potential to cause a severe strain on our company financials. 700 skiers were going on a 5 night, 4-day ski trip when an ice storm hit New England, 2-days prior to our customer’s check-in. The Vermont ski resorts were shutting down. Our customers were traveling to a ski resort in Quebec, Canada, further north and the Canadian resort was still open but we didn’t know what was going to happen in the following 24-72 hours. The phone started ringing, customers were calling. Our customer support staff was asking me what to say.
I went into action and my wife and I made the following decisions quickly, trying to think about our customer first, the travel supplier partners second and then our business third.
I called the GM of the Canadian ski resort and all the hotel partners. I said, due to the ice storm our customers will most likely not want to risk traveling to the resort due to the closure of roads and the possible danger involved in traveling. We sold U-drive ski packages where the customers drive to the resort. After the bus flip incident, we moved away from running bus tours.
I told our travel supplier partners that our company was going to give every customer the option of canceling or going on the ski trip. I told our supplier partners that I thought some people would not cancel so they were going to get some business from us and not loose everything. I also needed our suppliers to agree that our company would not get charged for lift tickets and hotel rooms that we had reserved and had deposit payments. I told the suppliers they could keep the payments we had already made and requested that the payments be used as future credit towards any reservations in the future. Every supplier agreed to my terms because they were not refunding the money and they could keep it on their books.
We told each customer that if you want to cancel, ok, we would refund you 100% of the money you paid. If you want to go on the trip and you check into the hotel at the resort then there would be no refund and if you decided once there that you wanted to cancel and or shorten the trip that you would not get your money back either, you couldn’t cancel after checking in, the offer was an all or nothing proposition.
When a disastrous situation strikes your company think and act on behalf of your customer first, travel suppliers second and your business third.
By giving our customers the choice to decide we removed almost any liability we could have encountered by totally cancelling the trip. Had they gone on the trip and gotten hurt we could have said, we offered you the chance to cancel and instead you chose to go. By enabling our customer to choose we removed any possibility of pissing them off. We didn’t tell them they couldn’t go. We emailed each customer that decided to go on the trip an addendum to our reservation contract stating the new terms enacted due to the storm and that they were choosing to go on the trip versus being 100% totally refunded.
Travel Supplier Partners Second:
Our travel supplier partners were business people, in the hospitality business so they knew what we proposed was the right thing to do for both the customer and their business. Suppliers don’t want upset travelers on their property. Giving the customer the option to travel or not was a new twist for some of the hotels and they agreed that by us not totally cancelling the trip, some travelers would come, so the hotels would be earning some money from us and not totally loosing out. The suppliers agreed not to charge us for the people that cancelled. We created a win-win with our suppliers if there ever was such a thing in this circumstance.
We thought about the situation and how our decisions would effect us financially, legally and brand. We realized financially we were going to get hit. There was no way around. Refunding up to 700 travelers is a tough pill to swallow. Our company was not going to shut down but profit for the year was going to be hit. Legally we realized that we had to refund the customers that did not want to go on the trip. Had we said no refunds, I am 100% certain that our company would have not lasted more than a year after due to the onslaught of lawsuits that would have prevailed. Our brand name was golden on hundreds of campuses and universities throughout the East Coast and New England and we did not want 700 travelers bad mouthing our company. This was my biggest concern.
What happened after we implemented our plan was a real surprise. Actually we were shocked. 60% of our customers decided to go on the trip, only 40% cancelled. In the end we actually made a profit on the entire 5 night, 4-day ski trip. We even received a few letters from our clients telling us that even though the snow was bad, the roads a challenge, that it was a true adventure to get to the resort and they were glad we gave them the choice.
If you want to be a strong leader, make good decisions and work towards building a great travel company you are going to go through these types of intense decision-making processes and experiences. On the surface all you will see is doom and gloom. The key is to make decisions that always favor your customer first, the travel suppliers second and your company third. Make your decisions in that order, then take action, hold steady and push through the pain. The outcome will be much brighter on the other side.
If your ever under distress and need someone to talk to, pick up the phone and call me. I’ll help you think through the decision-making process and give you the support you need. Seriously, just call me. 207-460-0740