alexcr

I'm working towards launching a side project business in the adventure travel tour operator space later this year. Without boring folks with too many of the details, our offering will be membership-based and seasonal, with our itinerary essentially decided on-the-go; each week during the season, based on various factors, we decide on that week's destination for our members, giving us just a few days to take care of the travel arrangements for our members, including flight bookings. A few other relevant details...

• Our members will almost entirely be based in the western United States - in particular, cities like LA, SF, Seattle, Dallas, and Minneapolis.
• Our weekly destinations will be in states and provinces such as Colorado, Utah, Wyoming, Montana, British Columbia, Alberta, etc..
• While we will provide flight booking services, members will ultimate be responsible for the cost of their own flights.

I'm trying to figure out the best way to go about providing these flight booking services for our members, keeping in mind that these flights will generally be booked just a few days out from departure. Early on, when our season-long membership could be as few as 20 clients, I may very well provide these services myself, e.g. by leveraging tools like Google Flights, Skiplagged, and ITA. But as we hopefully grow, it won't be practical for me to provide these services on my own anymore, so I may very well look to retain the services of an outside flight booking agency.

I'm curious to get folks' advice on how they'd potentially approach this if they were in my shoes. Are there any strategies/services you would use to minimize the financial hit of purchasing these tickets at the last minute? Are there any agencies they'd recommend outsourcing this work to, especially as the business grows in size? Thanks in advance for sharing your perspective! I'm sure it will be helpful.

BearX220

1. What is your target market? If like many adventure travelers they are not yet retired, how responsive can they be to your just-in-time, go-next-week offerings?
2. If you want your customers to "ultimately be responsible for the cost of their own flights," and they don't even find out about next Thursday's tour until today, how are you going to persuade them to pay close-in fares? It sounds like you want some secret work-around that lets you obtain advance-purchase air tickets at near-day-of-departure rates; those don't exist on a consistent basis.
2. What is your value proposition? What can you do for me that I cannot do myself with 30 minutes' surfing? You are not proposing to introduce people to Myanmar or Siberia; you want to send them to Colorado or Montana. Chances are your market knows those places already.

Look at the cruise industry. There are basically two tiers to it: long-lead purchases, where the itinerary is marketed, sold, and paid for by the customer 6 to 18 months in advance... and the short-lead, distressed-inventory, deep discount market, where the ship leaves in a week from Rotterdam or Papeete and empty cabins can be yours for 70% off if you're free and can find a way to get to the embarkation point on your own dime.

You will note that the distressed-inventory, close-in market rarely if ever includes free / discounted airfare.

The market has organized these models rationally. You want a difficult-to-execute hybrid of those two models: all the complexity and logistic effort of advance-planned trips, offered on a hey-let's-go-now basis, at high prices, to people who probably have jobs and busy schedules. I am not sure how you intend to thread the needle and pull this off.

alexcr

Thanks, but not really seeking feedback on the business model here. (I don't want to go into the details, but there are reasons why our approach works for the market I'm targeting, though I understand why it would be difficult to pull off more generally.) If you have advice as to my original inquiry about flight booking strategies, let me know.

NYC Flyer

I'd suggest using a travel agent. They might charge you a service fee, but can hold reservations at the quoted fare for at least 1 day for each traveler while other itinerary details are finalized and/or the final purchase decision is contemplated.

Last minute bookings for a group of varying size each week and originating in different cities is not the type of business airlines will provide discounts/special amenities to attract.

As far as specific agencies, I would suggest a local (to you) travel agency that is small enough for you to develop a relationship with the owner/manager, but large enough to have the economy of scale to enable the ($25-50) service fee charged to warrant the time it takes to handle your bookings (likely this is an agency with a strong corporate travel department). If the travel agency is handling hotel/tour operator bookings, you might be able to get the air service fees waived, but as there is generally little/no commission to be earned on the air routes you mentioned, you will probably have to pay for the agency's services.

Eventually, group bookings may make sense, but these necessitate a commitment of 10 travelers on the same itinerary.

Good luck with the business!

alexcr

Thanks! This is very helpful. Someone else I was speaking with also recommended going the corporate travel agent route, though in that case they mentioned looking into one of the big guys like American Express Corporate Business Travel, as opposed to working with someone smaller and local. To provide some context, we might not be this big off the bat, but our goal is to eventually grow to a size where we'd be booking close to $1mm annually in flight volume, though doing so across a variety of airlines, by necessity. A few questions...

1) What kind of percentage discount on flight fares do you think a corporate travel agent would be able to get us as compared to us booking flights on our own? As mentioned, we'd be passing the cost of flights along to our clients/members, and we're sensitive to the fact that they'd be paying a significant premium given the "week of" nature of these bookings. If going the corporate travel agent route would allow us to access significant flight fare discounts for our clients/members, that would be fantastic.

2) I imagine one of the disadvantages of going the smaller/local agent route versus working with one of the big guys would be the lack of 24-hour support?

3) Would the $25-50 fee per booking typically cover the cost of any rebookings, if necessary?

NYC Flyer

My pleasure--my travel agent and business backgrounds are intrigued! A locally-owned American Express affiliate might make sense (or Travel Leaders, ProTravel, etc...), but I think the corporate-owned Amex Corporate Travel subsidiary would think of this as doing you a favor, not the other way around.

Likely zero until you have built some volume and can negotiate a corporate contract with a preferred carrier or qualify as a tour operator with which an airline would look to negotiate bulk fares (at that point you'd be large enough to necessitate your own in-house air department of some type). However, there are agencies with access to small discounts on certain fares/routes/airlines. These offerings are not widely promoted (as no carrier wants to cannibalize their own sales channels) and generally require a relationship with an agency.

As an aside, keep in mind, if you are booking multiple passengers on last minute fares, each additional passenger (for instance on a connecting flight to Missoula) is going deplete seat inventory at lowest fare buckets, potentially impacting the airline's yield management algorithm for the flight and increasing the price for the next customer you book. Booking each individual will be a dymamic activity.

Most agencies that have a meaningful corporate business have after-hours support.

I am a one-man shop and am contemplating adding this offering in the next six months.

Everything's negotiable, but likely a per-call and/or per ticket charge would apply, with an additional fee for after-hours support most likely.

alexcr

Thanks again! Regarding fare discounts, I was under the impression that corporate agencies - or at least the big corporate agencies, like American Express Corporate Business Travel - typically have access to tickets at significantly reduced pricing. Is this not the case? And, if so, I guess the main reason to use an agency in a situation like this is to outsource the administrative work?

What's the name of your agency, by the way?

NYC Flyer

Other than the small discounts I referenced, there are programs like Travel Leaders/AMEX "Travel Collection", Mastercard WordElite, and AMEX IAP. I am sure there are a host of other "afffiliate" programs as well across various airlines/groups that provide limited discounts.

More substantial corporate discounts are negotiated between the purchaser/client and the airlines. AMEX may have a consulting group that assists large corporations in the negotiating process with airlines, but ultimately the price and volume commitments are contracted between the end-user and the airline. AMEX or another travel management company just books the travel on behalf of the client, enforces policy, etc.

The main benefits of using an agency are abililty to hold unticketed reservations for one business day, schedule change monitoring/assistance with irrops and perhaps most importantly, outsourcing/organizing non-core aspects of your business. (You could certainly become a travel agency as well, and bring these functions in house. Much of the licensing/insurance/infrastructure you will need for your business will be duplicative with that of a travel agency.)

I am an independent agent affiliated with Nexion/Travel Leaders...link in my signature for more background.

alexcr

Thanks. Yeah, I think the challenge would be that we'll inevitably need to use multiple carriers to accommodate our client's schedules, so our spend will be spread across airlines. Just out of curiosity, at what level of annual booking volume do carriers start being open to negotiating discounts with a company?

I checked out your profile. Looks like you're also based in LA? One thing I'm confused about is that your signature says "specializing in discounted int'l and domestic fares," but you're saying here that there are next to no discounts available. Am I missing something?

NYC Flyer

I split time between LA and NY. Travel Leaders does have access to discounts (which I'd put in the category of the affiliate-type discounts I mentioned) on some airlines/routes. Details of these programs are not something the airlines permit to be broadly dissimnated--feel free to reach out if you'd like to discuss offline. I'd put most of these programs across the industy in the category of "I'm going to buy anyway, so the discount is a nice perk, rather than "I'll buy at that price".