You can go home again.

My family moved from Greenville, SC between my junior and senior year in high school and I graduated with a bunch of really great people but they weren't the ones I grew up with. Sherrie and I went back to Greenville for the 50th reunion of the Greenville Senior High class of 1959. The organizing committee was kind enough to let us come even though I didn't graduate with them. And it was great! I hadn't seen my classmates for 51 years and surprisingly I recognized seven of them without looking at their name badges. Oh sure they had changed but I recognized them. One of the most interesting was a young lady I'll call Vanda 'cuz that's her name. Oh sure, the hair was a different color and the facial features were different, but as a bunch of us sat in a hospitality suite chatting she smiled and, like an electric shock, so help me it was like an electric shock, I saw the Vanda I knew 51 years ago.

And there were neat things like that all weekend.

The most interesting part was observing. The years had been good to most of us, not so good to some, and some of us had run across a world class surgeon or two. Others of us had run across surgeons of other types. One of my buddies, Howard, recollected for all of us having had open heart surgery and two cancer surgeries. He didn't tell the assembled class exactly what it was but did reveal that it involved 30 feet of garden hose with a television camera, a flashlight and a Swiss Army knife taped to it which the doctor put in a place no one ever thought it could go and God obviously never planned for it to go. Some of us laughed harder than others. Completely understanding humor will do that to you.

The neatest part though was discovering how much so many of us had in common. Many had traveled, had many interests in common, and really enjoyed good food and wines. I knew some of the guys really like PBR from the Clock Drive-In, courtesy of the carhop (cannot remember his name) who was everyone's best friend if they had a buck, but this was different.

Anyway, talking to a number of them led to discussions about a river cruise through Burgundy and Provence and it turns out there are a bunch of us that want to go. So I'm looking at a cruise with Avalon Waterways next May for a really great time.

Here's a link to a slideshow showing a bunch of us including my high school and my grammar school.

Sorry Thomas Wolfe, you got it wrong.

There's a light at the end of the tunnel

And it's not a train.

This has been a tough year for the travel industry, especially the retail distribution side. Even with doom and gloom economic forecasts, our agency started off with a bang this year and we had great booking activity in January and February. Then as suddenly the bookings turned on just after Christmas, they turned off in March and it seemed there was a race to the bottom to see which cruise line could cut prices the most. We wound up processing bookings four and five times, each time cutting our earnings as prices dropped. One need not be a business major to understand that's a process that can't go on too long.

Prices stayed down and even though volume was pretty good, earnings per booking have been well below the break even point for even the major Internet travel retailers. This has not been lost on travel suppliers, cruise lines in particular, because, contrary to popular belief, travel retailers still provide a most necessary service to their clients and their suppliers. After peaking at about 7%, online cruise bookings have fallen off and are now estimated to be a bit above 5% and even that is misleading. The company that publishes statistics on Internet vacation booking counts any reservation that starts on the Internet as an online booking even though the traveler may call a live travel consultant. I consider an online booking to be one that started on the Internet, finishes on the Internet and never involves a human. With that caveat, it is likely that online cruise bookings are substantially lower.

So where's the light? I think we have seen a firming up in cruise pricing in recent weeks at our agency, and maybe even some signs prices are increasing. Part of that stems from the reality that prices can't go down any further. Part of it is a growing sense of confidence among consumers. As a result, travel retailers who have the resources to hang on until next March will be able to survive practically anything. For them, there is a light at the end of the tunnel.

For others, the economy will claim them and they will merge, be bought, or go out of business. Either way, look for maybe a third of all travel agencies to be gone within two years, and maybe less.

Planning a vacation? Contact a local travel retailer and let them do the work for you.

Voice of reason or ?

Carnival Corp. announced they don't have plans to reinstate fuel supplement surcharges. Yay. Hooray for some common sense by at least one executive, Micky Arison, at Carnival Corporation. The cruise business is insane just now. We're selling BALCONY staterooms for the same price as INSIDE cabins less than five years ago. We are selling SUITES for what an inside cabin sold for fifteen years ago. We are processing 2 1/2 times as many transactions as we did fifteen years ago and earning the same amount. All that while labor costs and rent have doubled. We have seen some rough spots in this business before but nothing has threatened viability of the travel agent retail distribution system as much as this downturn.

In January I predicted that 1/3 of all agencies would be gone in two years. I now believe I was wrong. It will more than likely be half of them and in eighteen months or less. The worst part of this is that it is genuinely bad for the cruise lines for this to happen. One of the first things I learned in business school is to NEVER allow your product distribution be controlled by a handful of retailers or distributors. When that happens the tail starts wagging the dog and the supplier and the consumer both lose when a small handful of mega agencies control vacation travel sales.

Because I Could

We may not have all done it, but I guarantee that everyone reading this knows someone who, at some point in their lives, has done something just because they could. From putting a super-hero cape around our neck and jumping off the garage roof to see if we really could fly (might have been a towel now that I think about it) to standing sideways with one side of our body against a wall and trying to lift the opposite foot to see if it could be done (it can't), most of us have done something like that.

The speculative run-up in crude oil prices last year was probably the pin that finally popped the U.S. economic balloon. The combination of rising interest rates, gas prices going up $1600 a year per family on average and escalating prices on many other consumer goods was probably what squeezed a lot of families so hard that they began missing mortgage payments and when that happened it was a race to see who could hit bottom first.

Airlines and cruise lines jumped right in as well, adding relatively small fuel surcharges at first, ultimately reaching $11.00 per person per day. It was not until January that cruise lines removed these onerous charges, but did so by adding a qualifier to all bookings from which the surcharge was removed and inserting a provision in all new bookings that stated that if the price of light sweet crude oil on the New York Mercantile Exchange rose above $70.00 per barrel for some period of time (that varies by cruise line) that the cruise line reserved the right to add the fuel surcharge back to all bookings. As I write this, light sweet crude oil is bouncing around $68.00 a barrel as OPEC meets to discuss output and pricing. It is likely that oil will close above $70.00 per barrel in the next few days, or weeks at most.

Vacation travel has been surprisingly resilient this year with cruises especially in demand. Suites and deluxe staterooms have been the first to sell out, in great part because the cruise lines have reduced prices very substantially to stimulate demand (if you're a marketing/economics type, the cruise industry is the poster child for demonstrating price elasticity). As a result, mini-suites are selling for prices more typical of an inside stateroom of five years ago, and we may not have seen the bottom yet. The cruise industry is egg-shell fragile just now and so are many of the retail agencies and agents selling their product.

So what does this all have to do with anything? When oil does go back above $70.00 a barrel, I ask the cruise lines to think long and hard about adding back the surcharge to bookings just because they can. Like the boy jumping off the garage roof, the consequences of taking that step will be painful for the cruise lines and for their retail distribution system. This is really not the time to do something just because you can.

And here's another certainty - all you ladies have finished reading this and are off to other endeavors. The vast majority of the guys are still over at the wall trying to lift their opposite foot off the floor.