Travel Agencies Aren't Dying. They're Thriving -- Thanks in Part to Military Veterans.
For as long as he could remember, Nick Moyneur had fantasized about launching a company. But by 2014, at the age of 31, he saw no clear way to do it. Moyneur had just concluded six years in the Navy, and he felt disoriented without the regimented military direction he’d been used to. He was also now married, with two young children to care for, and betting the house on an unproven business idea was a nonstarter. “I was going over ideas for a couple of years, and my wife kept shooting them down,” he says. “It was too much risk for her.” And, he admits, she was right.
At a loss for what to do next, Moyneur took to Google. He began searching terms like “business opportunities for veterans,” which eventually led him to VetFran, an organization that ranks veteran-friendly franchise companies. One of those companies, Dream Vacations, was running a contest called Operation Vetrepreneur, exclusively for U.S. military veterans: Moyneur could present a résumé, a business plan and a video application. If he won, he’d receive one of five free franchise agreements along with training, corporate support and marketing materials -- which is to say, a debt-free ticket to owning a travel agency.
But wait -- weren’t travel agencies left for dead, no longer needed once people could book flights and hotels and tours online themselves? Was this actually a viable business? Moyneur wasn’t sure, but he at least knew something about the industry. His wife had worked for travel agencies for years, and much of their lives had already been centered around traveling.
Years earlier, he’d taken a scuba-diving instructor’s certification course while an undergrad at the University of Missouri. After graduating, he decamped to an island off the coast of Honduras to spend three months as a dive instructor. Afterward he took a bus to Costa Rica, met up with a pal from dive school and drove a Toyota Tacoma up through Central America and all 1,400 miles of Mexico. Once back home in St. Louis, Moyneur launched into a full year of intense, rigid training to become a U.S. Navy diver. “I’d wake up at 4:30 am every morning to work out,” he says. “I wanted to do diving the right way.”
Just before joining the Navy, he married his wife, Julie, in 2008. His first post after training was in Hawaii, where he was assigned to Pearl Harbor’s Mobile Diving and Salvage Unit One. Julie took work as a travel agent while he deployed to Vietnam, Singapore, Japan, South Korea and the Philippines, carrying out underseas government missions.
Julie liked her job as a travel agent and knew there was opportunity there. So when Moyneur told her about the contest to win a Dream Vacations franchise, she finally saw a business that didn’t terrify her.
With his wife’s blessing, Moyneur applied for the contest. Everything has led to this moment, he thought. This is my future.
If you thought travel agents were obsolete, you were right, to an extent. When sites like Travelocity and Expedia arrived in the mid-’90s, customers no longer needed their local brick-and-mortar agencies. And once airlines had a direct line to consumers, they stopped offering the commissions agents had long relied on. “The internet killed the old-fashioned travel agent,” says Dave Hershberger, chair of the American Society of Travel Advisors (ASTA). “It just took them all out of business.”
Of the agents that survived, many found refuge in the exploding cruise industry. While customers approached airline tickets as a basic commodity, they looked at ship travel as an experience, and first-time cruise-goers needed all the help they could get sorting through itineraries, dining options and room choices. To win those customers, companies like Carnival and Royal Caribbean continued offering agent incentives. All of this functionally reshaped the travel agency industry as a whole. The old-time role of “agent” began to morph into “adviser.” And once that happened, the industry learned how to adapt and rebuild.
Among the most critical changes that followed: Agencies stopped operating out of storefronts, and they very frequently stopped having employees. Businesses became solely owner-operated, run out of people’s homes. Between 1997 and 2013, the number of agencies with multiple employees fell from nearly 23,000 to fewer than 10,000, according to Skift, a travel-industry research firm. But the number of independent agents actually crept upward, showing a 7 percent gain over roughly the same period. Storefronts are now landing pages, and agents rely on laptops and smartphones to connect clients to large networks of travel suppliers.
“It’s an incredible model,” says Michelle Fee, a survivor from the industry’s older days. “People are making great money doing business out of a bedroom at home. You just don’t need that overhead.” In the early ’90s, she ran a brick-and-mortar agency in Coral Springs, Fla. But when she saw how the internet was changing the industry, she closed her storefront and pivoted to a model that would empower independent agents to run their own online businesses from their homes. Today, with more than 2,500 franchisees, her company, Cruise Planners, is the industry’s biggest travel agency franchise.
Only 11 percent of today’s travelers use agents to book their trips, according to a recent report from ASTA, but the industry sees many reasons for optimism. For complicated bookings like cruises and tour packages, agents still control roughly two-thirds of the business, according to the research firm Phocuswright. And the travel industry is ever-growing; according to analysis from the World Travel and Tourism Council, travel now accounts for 10.4 percent of the global GDP. American baby boomers currently take three trips per year, and millennials take nearly five. “The economy has been strong for eight years,” Hershberger says. “And traveling has become less expensive.”
Perhaps the industry’s most encouraging stat, however, hints at the growth potential. Of those who use agents today, 85 percent claim to be satisfied or somewhat satisfied with the service. “People are coming back,” says Fee. “We have the tools and vendors to get you dropped in at a rate you couldn’t find yourself, so our business has never been better.”
As it regains strength, the industry has also relied more and more upon the promise of convenience. “A travel agent is going to save you time, energy, and money,” says Drew Daly, who oversees recruitment for Dream Vacations. “That’s probably our biggest headwind: making sure the public is aware that we’re still around and that we have tremendous value.” Agents pledge to be on hand to handle midtrip emergencies by booking flights, cars and hotels when necessary. An agent can make sure a traveler’s transportation transfers link up properly, and that their hotels are close to the landmarks they want to visit. And for the most part, commissions still come from the suppliers, so it’s essentially a free service to customers -- one industry survey even found that agents actually save travelers an average of $452 per trip.
But that promise of convenience is realized only if the industry recruits passionate, motivated agents who can build large networks of customers and deliver service that warrants repeat business. “I can’t make more money if I don’t have people selling travel,” says Hershberger. “So anything we can do to attract quality people who are disciplined, we need to do it.”
That’s why Dream Vacations and its competitors actively recruit veterans as franchisees.
After the Moyneurs put all their chips on Operation Vetrepreneur, Nick found a mentor at the Veterans Business Resource Center to help him draft a business plan. They cut a three-minute video with a photo montage -- Nick riding an elephant in Thailand, the family and kids meeting Mickey at Disney World and so on -- with a voice-over declaring their passion for travel and boasting that the Moyneurs had collectively visited 24 countries. “We poured our souls into the contest,” he says.
They shot off their application in July 2017. In a typical year, Dream Vacations receives up to 300 submissions, so it was a few weeks before the Moyneurs learned they were finalists. They called in for a phone interview, went back to waiting and at the end of September were told they’d won -- and that they were due for training in Fort Lauderdale.
The Moyneurs dropped the kids off with their grandparents, and over six days, they met with travel vendors, toured cruise ships, set up the online profiles they’d use to recruit business and learned how to use My Cruise Control, Dream Vacations’ booking system. They also met other franchisees, whom they leaned on for help. “We’re still in contact with them today,” Moyneur says. The Moyneurs’ franchise was one of 219 that Dream Vacations added to its network last year.
This year, to cap off a 61 percent growth spurt that began four years ago, the company is on track to sign 300 more.
With this kind of growth, franchises are constantly searching for qualified new franchisees -- and that’s the reason VetFran, the organization that led Moyneur to Dream Vacations’ contest, was originally built. The program was created in 1991 as the International Franchise Association sought ways to attract soldiers who were coming home from the Gulf War. “We had all these examples of veterans being leading employees and franchisees,” says Jeff Bevis, chair of the Educational Foundation committee at VetFran. “They’re systematic, process-oriented and disciplined.” They’re also considered excellent at working within systems and staying focused on execution, and they appreciate the value of ongoing training. For all these reasons, franchises had sought out vets. VetFran finally made it easier for vets to find franchises.
Today, VetFran has more than 600 franchise members. A three-year hiring initiative that launched in 2011 resulted in more than 200,000 new jobs for veterans and veteran spouses, with 5,608 of those being franchise-ownership positions.
The Operation Vetrepreneur contest was Dream Vacations’ way of capturing the best of these potential veteran franchisees. In franchise terms, its units are already pretty affordable: Startup fees for Dream Vacations run a mere $12,700. But the opportunity to launch a business with zero debt is a huge boon for military families looking to launch a self-sustaining encore career without startup-level risk. And because its profit model is built on commissions, Dream Vacations is happy to eat the cost of a few franchise agreements if the overall effect brings more powerhouse agents to the company.
Since its launch in 2012, Operation Vetrepreneur has greatly increased the presence of veterans inside Dream Vacations. (It now counts 400 franchise-owning veterans among its ranks.) “We’ve seen ridiculous growth from our veterans,” says Dustin Jones, Dream Vacations’ vice president of engagement. “There just seems to be an extra passion in them.” This year, the company increased the size of its prize pool from five to seven free franchise agreements, and while Dream Vacations offers a year-round 20 percent franchise discount for veterans, it bumps up that savings to 40 percent for those who enter the contest but don’t win.
Dream Vacations is not alone -- several other major franchise travel agencies are trying to bring ex-military members into their ranks. Expedia CruiseShipCenters offers veterans a 15 percent discount. Travel Leaders Group offers free training for veterans looking to become independent travel consultants. Michelle Fee’s Cruise Planners, which counts veterans and their families as 18 percent of its franchisees, reduces its standard $10,995 agreement by 28 percent. These kinds of discounts really do make a difference, say vet franchisees. Charles Russell, 55, purchased his Cruise Planners franchise in 2013 after serving 22 years as an Air Force nurse. He’d considered a restaurant franchise first, but the startup investment was massive. “If it failed, it would have ruined me,” he says.
Armed with the franchise playbook, Russell built his operation quickly. He doubled his business in 2014, and then again in 2015. “We’re used to finding ways to work within a system,” he says. “And that’s all a franchise is: It’s a system.”
When the Moyneurs returned home from training in Fort Lauderdale, they quickly found a niche selling cruises and vacations at all-inclusive resorts. But their business is still in its infancy, and their clientele is too small to pay the bills alone. The Moyneurs essentially started from scratch, and first-year franchisees don’t usually turn profits. So while Julie handles the day-to-day booking, Nick works in the public research room at the National Archives at St. Louis. “It just takes time to build up the business,” he says.
To speed the process, he’s focused on customer acquisition. He joined his local Chamber of Commerce and attends networking events. At his monthly meet-ups at the Veterans Business Resource Center, he visits his mentor and kicks around ideas with other seasoned entrepreneurs.
But there’s reason to be optimistic. Dream Vacations assigns its new franchisees a business-development adviser, and for the first few months, the Moyneurs leaned heavily on theirs. “I was in contact with her all the time,” says Moyneur. When the couple hit their first-year revenue target three months ahead of schedule, the company assigned them to a new adviser, one who specializes in long-term growth.
From here, the couple plan to follow the Dream Vacations playbook as closely as possible as they build toward their five-year goal, and then their 10-year goal after that. “It’s all part of our business plan,” Moyneur says. “I’m in this for the long term. I’d like to pass this on to one of my kids one day.”
And perhaps he will. He has the attitude that his corporate advisers associate with long-term success. By leaning hard on the virtues of military training, Moyneur knows how to keep his head above water. “As a Navy diver, any time you get into the water, you follow procedures just to stay alive,” he says. “Similarly, with a franchise, they give you the system. If you follow it, you’re going to succeed. That’s how I see it.”