ATA Opens Old Play Book to Survive in Today’s Economic Downturn

Chairman David Parry and President Kate Simpson need two hands to count the number of world crises they have weathered together as leaders of Academic Travel Abroad, a 59-year-old educational travel company based in Washington, D.C.

The OPEC crisis, Chernobyl, Tiananmen Square, Desert Storm, 9/11, SARS, and other world events are the backdrop upon which ATA has designed and operated innovative travel and study abroad programs for decades. Throw in the normal boom and bust cycles of the U.S. economy and both Dave and Kate agree that they can’t imagine a more interesting and challenging business to manage!

While ATA has “been there and done that” during previous downturns, the current crisis is a “perfect storm” of factors that have deeply affected the older, educated, affluent Americans who form ATA’s customer base. However, while other travel companies have panicked and slashed prices to improve bookings in the short term, ATA has taken its usual, “no drama” approach and has applied a set of timeless management techniques that have steered the company out of choppy waters in the past.

Here are a few secrets from their survival play book:

  • A diversified product line that caters to travelers at several different “life stages”
  • A commitment to superior customer service and strong value-added components in all of its programs
  • A strong investment in marketing
  • An innovative product line that meets the traveler’s need for shorter programs that don’t skimp on education
  • A long term plan to be prepared when the market rebounds
  • A relentless focus on strong business principles, such as containing overhead costs and maintaining a strong cash flow

Academic TravelAbroad

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Academic Travel Abroad: The Outlook for Non-Profit Travel Programs During Economic Downturns

We all have a right to worry about the present state of the American economy and the potential for diminishing enrollments for our travel programs.  This clearly is a complicated and worrisome economic crisis that is both similar and different from past economic downturns.

In the more than 35 years that I have been active in educational and cultural travel, I have successfully weathered several recessions as well as more than enough international unrest.

  • 1973-75 OPEC Oil and Economic Crisis
  • 1980-82 Iranian Revolution and Oil Shock
  • 1990-91 Economic Slowdown
  • 2001-03 Dot.com Bubble (+9/11, Iraq War & SARS)
  • 2007-? Credit Market Crisis

What is similar is that the economy is slowing down with both personal consumption and manufacturing declining while unemployment is rising.

What is unusual this time is the credit crisis which has seriously undermined the world economic system.  While the underlying cause is the real estate bubble, it has seriously impacted all aspects of the economy.  Until the credit markets are stabilized there is little hope of a strong leisure travel sales market.

Here are a couple of things I have learned from the past.

  • Leisure travel sales are generally thought to be a lagging economic indicator where sales only begin to drop off after the overall economy begins to stall.  This helps to explain why 2008 has generally been a strong year for many organization’s travel programs.  And, why early 2009 sales are down.
  • Conversely, leisure travel sales lag as the economy recovers.  If, as is now suggested by many economic commentators, the US and world economies will not begin to recover until the second half of 2009, we may not see resurgence in leisure travel sales until later next year.
  • Keep marketing:  it is generally accepted that companies that continue to vigorously sell in downturns come out stronger and with improved market share than those companies that cut back on promotion and sales.

The current crisis has hit right in the heart of the prime Labor Day to Thanksgiving booking season.  Add to that the fact that some travel industry observers feel that travel sales usually decline during and election year.  We all have experienced the hiatus in strong bookings between Thanksgiving and Christmas.

Will 2009 be a good year for educational and cultural travel?  The answer will be in the December 2008 to February 2009 bookings.

David Parry

Chairman
Academic Travel Abroad

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Educational Travel is Still a Good Investment!

Why you should continue with your travel plans.

If you have been thinking about traveling on an educational tour in 2009, here are a few reasons to not change your plans.

1. Our all-inclusive tours are already priced. On our exciting land programs, there is never any inflation of currency or other costs between the time you commit and the time you travel. This is reassuring, as the value of the dollar has been unpredictable during the last several months.

2. Our educational tours represent great value. If you are a life long learner, you will delight in how intellectually stimulating our tours are. Our itineraries are focused and fun, and offer lots of behind-the-scenes extras that would be hard to set up on your own. We guarantee that you will learn more in less time than on many other tours.

3. We have anticipated the unexpected for you. Our tour staff takes care of all of the details of your vacation so you can focus on learning. Should the unexpected occur—delayed baggage, a lost passport, or a delayed flight—rest assured that your ATA tour manager will take over so that you can stay on schedule with the tour without interruption.

4. You will travel with like-minded people. Many of our travelers say that the people they meet on tour make the experience truly magical. We attract well-traveled men and women who savor the luxury of time to experience a new (or familiar!) destination in depth. They are interested, and interesting!

5. Some of your favorite spots in the world might be more accessible than ever.

It is inevitable that some travelers will defer their plans until a later date. This means that you might be able to avoid crowds at some of the world’s most famous sites.

Please call us at 800-556-7896 to speak to one of our knowledgeable staff about an upcoming tour or visit our website at: www.academic-travel.com!

Chase Poffenberger

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