Travel agents earn commissions helping Americans book domestic travel

Charlie Kao and Richard Earls of TRO-Travelmole sat down with Nick Hentschel, COO, and Jenny Tecklenburg, Vice President of Sales with American Tours International (ATI).

Charlie Kao: Nick, How are things in California?

Nick Hentschel:  Charlie, things are getting back to normal here in California. We have done very well with the vaccine efforts and the removal of mass mandates outside.  We are reopening restaurants at a 50% capacity here in Los Angeles County and other shops and stores, so things feel like a comeback from a pretty tough December or January timeframe to some ‘new normal’ that feels pretty good.

Charlie Kao: In the last few days, TripAdvisor came out with a survey that said two-thirds of American’s are planning summer vacations, and of those, 74% will take a domestic trip, and 13% and are planning international travel. What are the trends ATI is seeing?

Nick Hentschel: The trend that we are seeing is in line with what travel advisors hear from their customers. Destinations like Hawaii are hot, Las Vegas huge right now, and the Florida coast, especially Orlando, because the parks are now reopened and are booking exceptionally well. The coastal areas of Florida did quite well even throughout the winter because it was one of the few places where people could go.  But what we also see now is the resurgence of the national parks and surrounding areas. Interestingly, this summer’s issues will be about availability because there is always limited hotel inventory in the national parks.

Richard Earls: It’s indicated that about 37 million people will travel over the Memorial Day holiday, and you are talking about the possibility of availability being tight at the national parks, how far in advance do travelers have to book to find accommodations?

Nick Hentschel: I would say book now, just as soon as possible! Jenny can comment on what we see from the bookings from our agency partners, but it is essential to book early. We hold inventory in the National Park areas, but that inventory varies from park to park, and some are going to be more constrained than others.

Jenny Tecklenburg: My team and I speak with travel professionals every day, and interest in the National Parks is tremendous. As Nick said, it is all about availability and booking early.  It is nice to see! We hold allotments, so we will often show availability when the hotel’s website will show the rooms as sold out. In addition, we pay a commission, and some of the park hotels don’t, so that is a real bonus of our programs.

 Charlie Kao: Let’s talk about the extended-stay accommodations. Is there a significant demand and an adequate supply of long-stay hotels, lodges, and apartments?

Nick Hentschel: This has been a focus of ours regarding contracting inventory, whether it’s lodges that have hundreds of unique experiences right in the national parks or lodging adjacent to parks in other areas. We maintain alternative properties as well, not so far from a park area, but that offer in some ways a better experience. In terms of extended stay vacation rentals, that’s something we’ve also invested in, bringing onboard vacation rentals, and we have seen more demand, especially on the Florida Gulf Coast area and also in the California coastal regions.

Jenny Tecklenburg: We have seen more demand for vacation home accommodations, especially from families wanting a private pool and a greater variety of dining choices.  The demand for vacation homes also reflects the fact that extended families may not have seen each other for a while, and the setting gives them an opportunity for a closer, more intimate setting without crowds. We help a lot of travel professionals with these bookings daily. Many times these are really nice bookings. For example, we recently did a vacation rental in Myrtle Beach that was a $15,000 booking.  For any booking of more than $5,000, we provide our Concierge Service to assist with additional add-ons like van rentals or private tours. 

Richard Earls: That’s interesting. It probably isn’t challenging to exceed $5,000 for a multi-night stay at a private home with a pool.

Jenny Tecklenburg: That’s right, a vacation home rental for an extended family for a week will quickly put you into range for our Concierge Service, or it could be a more extended drive tour with several stops along the way. Right now, everyone wants to be outdoors. They have been locked up in the house for a long time!

 Charlie Kao: Nick, can you give us a bit of background on ATI?

Nick Hentschel:  ATI was founded in 1977 as a group tour operator primarily inbound from Europe and Australia. We started to create our own set departures and escorted tours that were feeding in from all over the world in various languages. Then we next branched out into FIT travel and developed our own system focused on packaging for individuals. Immediately after 9/11, international travel came to a standstill for a period of time, so we adopted a domestic strategy and partnered with AAA, and the Canadian Automobile Association to develop our Drive America programs. The technology behind that started back in the early 2000’s creating packages that we could market to travel agents to inspire them to book road trip packages by allowing travel advisors to fully customize a tour. We also have a groups team that can handle any group requests that a travel professional may with an expert staff. We are headquartered in Los Angeles have offices in Orlando and New York, and Hawaii.

Charlie Kao:  I understand pre-Covid 19 that you handled over a million visitors to the USA from abroad in fiscal 2019, which stayed an average of 10 nights which accounts for the incredible buying power you bring to the table to negotiate your rates.

Nick Hentschel: Yes, international is different from the domestic business, but it does have a longer length of stay and enhances the buying power that we bring to hotels and attractions for our domestic clientele.

Jenny Tecklenburg: It is essential to know we don’t compete with travel professionals. We are B2B only. We love working with travel professionals and helping them customize the perfect vacations for their clients.

Richard Earls: It strikes me that this is such an untapped market for the US travel professional who has often ceded the road trip to the big OTAs. This looks like a tremendous opportunity and maybe a market that has been under-appreciated by the travel agency community as a whole.

Nick Hentschel:  I think that’s right, Richard, that’s what we targeted early on in the pandemic, knowing that travel agents would not be able to book cruises or international and would have to re-focus their energy on domestic. Consumers in the US are very comfortable with just booking a single hotel and driving to it, but for the more complex itineraries with multiple stops, tours, and attractions, we are inspiring by showing them what the possibilities are, what the itinerary can look like, what the recommended route is and curating the experience. That is very different from what the OTA office can do for a client. We also work closely with multiple destinations together, to develop an exciting travel experience beyond what the client might think of independently. 

Charlie Kao: What about the matter of pricing? Is it more expensive for the consumer to book through a travel professional using ATI as opposed to booking on their own?

Nick Hentschel: I think that’s a significant point. Because we are using package rates, the prices will be better than what you will typically see with an OTA or dealing with the hotel directly. We are using deeply discounted rates, not individual pricing available direct from the hotel or online.  There are times when an OTA may fall into a special program or rate, but we will have other properties available to offer a better rate and the travel professional’s commission and with the support of our customer service team.

Richard Earls: I want to return to your Concierge Services. Those appear to be a tremendous value because those are the additional factors consumers and the OTA’s will miss. Do those additional services become a real value-add for the travel professional?

Nick Hentschel:  Yes, it is a tremendous value-add. For example, it isn’t easy to book a private guide in all destinations. You need to have those contacts; you need to work with them, and on really an ad-hoc individual basis to find the private tour or gain access to a place that doesn’t do publicly available tours.  We have experience across the US, so whatever destination the travel agent is looking for, we will provide the expertise they might not have.

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