Tip of the Month: It’s Crunch Time!

Isaac Cymrot

Isaac Cymrot

As we approach the heart of wave season in March 2009 we look at uneven reports showing the current strength and struggles of the travel industry. ARC reports show a 25% decrease in airline ticket sales. Yet cruise lines are reporting record sales. Do these disjointed results mean the industry is doing well or being hit hard by the recession? Based on my conversations with many of you, I believe there is a mixed answer.

Whether you find your bookings are busy or slow, there is one constant I hear from everyone: “I have to sell the tour supplier insurance this year. It is the right thing to do for my client.”

This attitude has me scratching my head for several reasons. Please answer this question: Have things really changed that much this year? I am well aware of two reasons for your current belief in supplier insurance:

  • Cancel for Any Reason
  • Price

Let us look first at Cancel for Any Reason coverage.  The point has been made many times why tour suppliers’ policies are not the best coverage for your client.  Most of you agree with the reasons our sales team have presented to you. With supplier policies now regaining popularity, I must repeat the question: What has dramatically changed in the past three months to make these policies a better option for your client?  When you step back and examine them, the honest answer must be: “Nothing!”

Some of them have added job loss coverage, but we have also made those changes.  In case you missed the announcement, our Cancel for Work Reasons option now covers for job loss after the insured has served one year of continuous employment with the same company where the job is lost. Our regular job loss coverage without the Cancel for Work Reasons option has always been, and remains, three years of continuous employment.
Price is the reason given for selecting supplier insurance that most alarms me. It should also alarm you. These supplier policy prices have not changed.  Many of the tour supplier policy premiums, in fact, have increased!  Customers are now forced to pay extra premium to receive cash back and other “premium” packages.

When you are booking trips for your clients at a lower travel price per person due to the deep market discounts being offered, then insurance pricing should never be an issue.  For example, when you book a trip costing $1,001 to $1,500 per person, our Worldwide Trip Protector insurance premium ranges from $53 to $117 for your clients depending on their age between 0 and 75.  When you sell a discounted cruise at $799 the premium is $41 to $89.
I would understand a priority for insurance price savings if there was a difference of $250 or more for supplier insurance when covering more expensive trips. Based on my conversations with many agents, however, expensive trips are not the norm right now. This is primarily a discounted, thrift-minded travel market in 2009.

For many of you sales are at a premium this year. This is because either your overall volume is down, or because you are selling much lower-cost trips that earn you less travel commission per sale.  Either way you need to maximize your return on sales and bring cash in your door sooner, not later.  Third-party travel insurance is the only product you can sell that pays you cash immediately, and in the process protects your travel commissions over $100.

Ask yourself these key questions: When your booked client does not travel until 2010, when do you earn that travel commission?  When you sell your client the tour supplier’s insurance, and they do not pay in full at the time of booking, when will you get paid the insurance commission?

Sales are at a premium this year, whether your volume is down or you are selling trips at much lower price points earning less commission per sale.  Either way you need to maximize your return and get cash in the door now.  Third-party travel insurance is the only product you sell that pays you cash immediately and protects your commission over $100.

Now more then ever you need to be a consultant to your clients.  Do not fall into the trap that you cannot offer the third party insurance if it is more expensive.  If you do not ask you are guaranteed not to get the sale.  You may be surprised at the response you will get even if the premium is $250 more than the tour supplier’s plan.

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