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Here’s what’s driving operators crazy

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postedApril 11, 2022
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When National Tour Association members gathered recently in Anchorage, Alaska, for Contact, NTA’s annual tour operator retreat, they laid it all out—their gratitude to be traveling again, but also the post-pandemic frustrations that are driving them crazy.

It starts with higher costs.

Michelle Pino speaks to Contact attendees in Anchorage. (Photo by Normand Huberdeau)
Michelle Pino speaks to colleagues
during the Buyer Network forum
at Contact '22. 

“Hotels are quoting prices that are out of this world,” said Michelle Pino, co-owner of Northeast Unlimited Tours in Sandwich, Massachusetts. “Transient business has increased so much in New England, hotels are telling us they don’t need group business. And if they will take us, they’re charging so much more.”

Fortunately for NTA operators, there were DMOs and suppliers who attended Contact as sponsors, and throughout the three-day event, buyers and sellers shared ideas and floated solutions during structured sessions as well as at meals and networking events.

Those DMOs and suppliers verified that Pino’s cost concerns are a national trend. Leisure travel didn’t stop during COVID, they said, and with independent travelers and families paying top dollar for rooms, hotels are not inclined to extend the traditional discount to groups—let alone comp operators a room.

And hotels aren’t the only type of cost hikes, said Brittany Dykla of Michigan-based Brilliant Edventures (pictured above with Pino). “Gas prices are driving me crazy. We have received some truly ridiculous fuel surcharges.”

During NTA webinars held last year, motorcoach company representatives said that fuel surcharges can be dropped if prices drop, but during the bidding process, those companies must protect themselves. This forces operators to pass along the higher fees for fuel—as well as for hotels—to clients.

“If these costs keep going up, people will just stop traveling,” Pino said.

Some of the higher hotel costs can be attributed to worker shortages, as understaffed hotels can’t operate at full capacity. The reduced supply of rooms converges with higher domestic demand to boost rates. And with international travelers expected to resume visits in the summer and fall, U.S. DMOs fear that hotels in their areas will fall even further behind in meeting demand.

Inbound specialists like Misha Jovanovic welcome the influx of international business. The owner of San Diego-based Misha Tours saw his business dry up when the pandemic struck. “2020 was promising until March, and then … nothing,” he said. “I know business will be back, though. I see a slow recovery for this year, but 2023 will be good.”

For now, there’s another key tour component that’s a source of frustration for operators. “Restaurants are our biggest challenge,” Pino said. “They’re saying, ‘We don’t have the staff, so we can’t take your group.’ That might change in two months, but we’ll be operating tours by then.”

The clock is ticking for other tour operators planning itineraries, as they struggle to nail down suppliers.  

“I’m constantly chasing our suppliers,” Dykla said. “We have to call them, call back and remind them that we called, and sometimes beg for them to take our groups or give us a contract or the information we need.”


Jay Smith talking to attendees at Contact
Jay Smith speaks at Contact during BizNet, an all-attendee strategy-sharing session.

And getting the contract right is often difficult, said Jay Smith, owner of Sports Travel and Tours in Hatfield, Massachusetts.

“We’re getting hotel contracts that aren’t properly proofed,” he said. “We get back contracts with incorrect dates, and sometimes the conditions we agreed to in emails are not in the contract. So we’re proofing other people’s work, and then we have to reproof it when we ask for edits a second time. We have to work three times as hard to get the end result. 

Off

 

Operators are also plagued by a change in client behavior that isn’t being reflected in suppliers’ conditions.

“Travelers are still trending toward signing up for a tour closer to the departure date,” Dykla said. “We’re struggling with hotels not understanding this and giving us more than 30-day cancellation periods, when our passenger lists aren’t complete by then.”

Tour operators who specialize in student groups have these same challenges … plus more.

“Everything you do, you have to redo … and then do it again,” says Julie Kozikowski, president of Connecticut-based Destinations Unlimited. “Protocols change and we keep informing teachers, only to have to update them again and again.”

And because parents add another layer of client interaction, an unsettled protocol environment makes doing business more difficult.  “Vaccine mandates led some parents to cancel, and although the mandate changed, the parents didn’t come back,” Kozikowski said. “Also, parents might see something on TV, but it’s not fully accurate. For example, D.C. removed vaccine mandates, but the Kennedy Center still required it. Parents see one news item but not the other.”

To add to her headaches, Kozikowski is seeing more and more teachers retiring, and the teachers who replace them are not stepping up to lead their students on trips. “So we’re losing schools that might not come back,” she said.

Operators proved to be resourceful during the pandemic, and their pivots to other revenue generators include adding medical travel programs and creating gift boxes that offer a flavor of their destination. One operator, Sheli Armstrong, manager of Destination Southwest in Albuquerque, New Mexico, added a new credential to her portfolio.

“I got ordained so I could perform weddings and be a more complete event planner,” she told Contact attendees during a closing session.

The DMOs and tour suppliers who partner with operators also pitched solutions at Contact, including taking groups to food halls and housing workers in hotels that are understaffed and unable to open fully. And Greg Eckhart of Visit Oregon shared the advice he’s been giving.  

“I’m telling tour operators they need to switch the order when arranging tours,” he said. “Instead of starting with a hotel and going from there, they should first firm up restaurants and motorcoaches.”

While there are no easy solutions to today’s price surges, worker shortages, and COVID uncertainties, NTA members in Anchorage agreed that their best path to recovery relies on sharing solutions and looking to each other for ideas, assistance—and business. Michelle Pino articulated what many of her colleagues have also concluded.

“We’re in a new tourism world,” she said, “and we’re going to have to work together to figure out challenges we never thought we’d see.”

For information about NTA (the National Tour Association), go to NTAonline.com.

 

Photos by Normand Huberdeau