On Stupid Rules

Blitz Magazine, June 2008

stupid1The other day, I was sitting on the patio of a Vancouver restaurant and a pair of Mexican tourists sat down across from me. After their drinks arrived, they asked if I minded if they smoked. I said no. I almost said: “Uh, it’s against the law to smoke on a restaurant patio in Vancouver,” but I didn’t. Because it would have sounded unfriendly. And stupid.

It is stupid. In Vancouver, smokers can no longer smoke near the entrances of buildings. So they go into the lanes and walk around on the sidewalks. Since there are no ash trays anywhere, they drop their butts wherever they happen to be. So the streets and sidewalks are heavily-littered with cigarette butts. This mess is the basis for the latest move on the part of the anti-smoking Nazis, who want to ban smoking on beaches.

If they succeed, you will be able to drive an exhaust-spewing vehicle, be morbidly obese, raise diabetic children, live on food from McDonald’s and furnish your home with lead-laced, Chinese-made junk from Wal-Mart, but you won’t be able to sit on a beach and watch the sun go down while enjoying a cigar. While I’m sure that special-interest groups will soon form to lobby against all of the former, the latter remains strange but true.

The West End of Vancouver is home to one of the largest gay communities in North America. It’s a place where people can be proud of their sexuality. In the heart of the West End is the ironically-named Olympic restaurant. Its owner recently refused service to a heterosexual couple. Why? They were kissing. The owner, while refusing to make eye contact with the woman, told the man: “We don’t tolerate that kind of thing in here.”

I recently pulled into a parking lot, just a few blocks from that restaurant, and was in the process of straightening out the car when an officious little man walked up to my window. He informed me that there is a law against idling one’s car and that if I didn’t turn the car off, he’d call the police.

stupidA couple of months ago, I went into a downtown hotel in search of lunch. Only the hotel’s lounge was open (the ‘lounge’ being an empty room separated from the restaurant by a movable screen). I was refused service, because I had a friend’s son with me—a minor. I told Mr. Rules that he could hardly expect the Liquor Control Board to pull the hotel’s license, pointing out that the minor in question was 53 weeks old and firmly teetotal. We got the boot anyway.

Ahhhh Vancouver. One of the most beautiful cities in the world. Where a West Side housewife waged a two-year campaign to bring down the tree house of the little kids next door. Where, while community festivals shut down for lack of funding, millions are spent on ‘traffic-calming devices’ (piles of cement that jut out into the road and cause accidents and vehicle damage). Where there is a sign at Third Beach reading ‘No Ball Playing’.

Tourism Vancouver has a $14 million budget to market its city as a travel destination. It does a terrific job; 9 million people visited the city last year. Marketing materials show dazzling images and speak of all of the things there are to do here. And now millions more will be spent on bringing people here for the 2010 Olympics. I’m thinking, though, that its executives are going to have to lean on the plods at City Hall. Because if you’re spending millions of dollars communicating to the world that your product is the best choice and it turns out that it is not, why bother? If you tell people that Vancouver is the best place for their honeymoon, but public displays of affection are punished, why bother? If you tell people that Vancouver is kid-friendly and families are refused service in hotels, why bother? And who gets to tell South American, Asian and European tourists that they can’t smoke while standing on the street?

The last word goes to a British tourist who was brought here by successful marketing. Last week, the man told a friend: “This is a fabulous city, but I could never live here. You people are just too up-tight.”


All Aboard: Tourists Flock to BC for Rocky Mountaineer Railtours


British Columbians are spoiled. Most of us live with mountains, spend our days unavoidably looking at mountains. Mountains and lakes, mountains and rivers, mountains and mountains. We’re used to seeing wildlife, and a trip to Calgary is no big deal.

But for people from Kansas City or Manhattan, Liverpool or Cairo, a trip through the Canadian Rockies is an awe-inspiring, once-in-a-lifetime experience. And this is why Rocky Mountaineer Railtours is one of the world’s most coveted of train trips.

The Rocky Mountaineer story goes back to 1988, when VIA Rail, Canada’s national passenger train, started running a service called ‘Canadian Rockies by Daylight’. The service was heavily subsidized and, after two years without profit, the federal government put it up for auction. Twenty bids were received; the rights were awarded to Vancouver’s Great Canadian Railtour Company (GCRC), a team of former railroad executives led by one-time Gray Line Tours president Peter Armstrong. Rail is no longer a cheap, efficient way of transporting people over long distances, but the GCRC people knew that if the trip became an experience, it could be successfully marketed.

They were right. This was long before terrorism hit the travel industry but, even then, North Americans were looking for different types of vacations, especially those that didn’t involve leaving the continent. And tourists from all points of the globe want experiences—not just a couple of weeks sitting on a beach. They want an understanding of the places they visit; to experience the culture, history and geography of unique places.

GCRC purchased the VIA routes and equipment, bought and refurbished the old VIA coaches and, in April 1990, began operating a 500-passenger train service between Vancouver and Jasper, and Vancouver and Banff/Calgary. By the following May, capacity had increased to 600 passengers and departures were up by 50%. GCRC employed 50 people and received 11,000 guests.

Today, Rocky Mountaineer Railtours (RMR) is the largest private passenger rail operator in North America. It employs 350 people, owns 65 pieces of rolling stock and, in 2001, welcomed 73,000 guests. And the whole success story boils down to terrific service, excellent guest relations and targeted marketing.

rocky8The Rocky Mountaineer experience is a two-day, all-daylight journey that follows the historic train route constructed over 100 years ago through BC and the Canadian Rockies. (The high season is April to October, but there are also winter tours.) It’s not just a trip from Vancouver to Calgary; from Calgary, guests can do the return trip, drive out of Calgary, fly out of Calgary, or keep heading east on VIA. If they return to Vancouver, they can hook up with a cruise to Alaska, head to Whistler, Seattle, home, whatever. There’s a Calgary Stampede Tour, a Christmas in Victoria tour, various wildlife tours, skiing tours—RMR markets 40 different packages.

For the rail portion, guests choose from two levels of service: Gold Leaf, which is first class, and Red Leaf, which is first class-ish. Red Leaf is classic rail travel on 50 year-old reconditioned Pullman coaches. There are reclining seats, large picture windows, open-air vestibules and in-seat dining. Gold Leaf coaches are $3.5 million, state-of-the-art, two-tier cars with glass ceilings, observation platforms and dining rooms.

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Either way, guests are wined and dined with BC Salmon, Alberta beef and BC wines accompanied by white linen and fresh flowers. On-board attendants speak English, French, German, Japanese and Mandarin, and give passengers plenty of notice when the train is about to slow for key photo ops. Guests carry detailed maps and follow the line’s history with the Rocky Mountaineer newspaper.

The two-day journey travels 918 miles through the UNESCO Rocky Mountain World Heritage Site, which is Mount Revelstoke National Park, Glacier National Park, Yoho National Park, then Banff and Jasper. The average pace is 75 k/hr and passengers do not disembark, but they can gape away at bears, bighorn sheep, moose, deer and elk. Along the way, they take in seven mountain ranges, plus tons of bridges, tunnels, waterfalls, canyons, lakes and rivers. And in the middle, they spend the night in Kamloops, where they have the option of attending the RMR-owned Two River Junction Dinner & Musical Review.

The cost of the trip depends on passenger choices. The minimum is $499 for Red Leaf, $999 for Gold Leaf (the split of choice is 50/50). When people order and book directly from the RMR brochure, they can spend up to $6000 per person; the average is $1300. But if they want to rent a car and drive back from Calgary, or head back to Vancouver via limousine, then stay at the Four Seasons before spending a week at Whistler, it can all be booked as an RMR custom tour and the sky’s the limit.

rocky6RMR houses a group travel department that arranges customized itineraries for groups—in the incentive and leisure travel sectors, plus the pre- and post-conference sector (many companies have their conferences right on the train).

Outside North America, RMR has sales reps in 18 countries, plus five sales managers who work out of the Vancouver office but travel the world making sure that tour operators, travel wholesalers and travel agencies are aware of the company’s offerings. The company supports the European market through a London office, PR firms are active in Los Angeles and London, and the company works very hard at maintaining a positive relationship with the international media.

As RMR’s VP Marketing, Graham Gilley, explains: “Our PR people pitch the international media with many different editorial angles. In 2001, we hosted 75 groups of media—we want those photographers and cameramen on board. We’ve been on Chef at Large, on the BCC, on CNN’s Hot Spots. And we work very closely with Tourism BC, Tourism Vancouver and Travel Alberta to get the most out of the media and make sure that Rocky Mountaineer is part of the story.”

This coverage not only helps sales, but it has helped the company build an excellent reputation. Its trade-marked slogan ‘The Most Spectacular Train Trip in the World’ was actually a comment made by former Canadian Prime Minister Joe Clark. Rocky Mountaineer is only one of seven rail journeys to twice make the 20 Best Rail Experiences list issued by the prestigious International Railway Traveler magazine. In 1998, it was voted Best Attraction by the North American Association of Travel Writers. Fodor’s listed RMR’s winter tours on its list of Top-Ten Most Overlooked & Under-Rated Winter Tours.

This sort of thing goes over very well with the RMR market, which is people 55+, mostly couples and empty-nesters who can afford to be discriminating. About 40% come from the US; 25% from Britain, 20% from other parts of Canada, the rest from Europe, Asia and Australia.

rocky1“People come to Canada because they want to see its natural beauty,” says Gilley. “We’re the centrepiece of that Canadian vacation and a big draw to Western Canada. For train buffs, the fact that passengers have their own train [no cargo attached] is a big deal, but only about 15% of our guests have a real interest in trains.”

There are two groups of customers: tour operators and FITs, or Fully Independent Travelers, who either call to book directly, or ask their travel agents to book.

The Internet is a big part of the marketing effort. RMR has three sites: rockymountaineer.com, which has been up for four years; winterrailtours.com and spectacularmeetings.com have been up for two years. Gilley notes that rockymountaineer.com receives 2,500 unique visits every day, making it one of the most visited of Canadian travel sites. The sites are extremely thorough, offering detailed information packages, streamed video and 360-degree Ipix tours, plus scheduling and pricing information. But you can’t book on-line. You have to call.

When someone has chosen his trip from the website, he calls the 800 number; in Vancouver, there there’s a 24/7, 24-operator call centre that fields 1000 calls a day. The call is answered by a well-trained RMR salesperson, who starts with the caller’s immediate choice, then helps with the ‘vacation design’, then books it all. RMR has strategic alliances with Hertz, Laidlaw Motor Coaches and Fairmont Hotels, so the up-sell angle is very important. But it’s a win-win situation. With one phone call, RMR makes a profit, the consumer gets a fabulous, custom-designed vacation. And the one-stop-shop approach makes life easier, and costs lower, for travel agents.

There’s another, equally important kind of caller. Those are people who want the all-important, 56-page RMR brochure, 800,000 of which are distributed every year. The brochure is an even more important planning tool than the Internet information and is most likely to lead to the booking.

While the sales managers and overseas agents take care of their areas, in North America, advertising encourages people to make that call. A print campaign targets the FITs from January to June, with ads in Readers Digest, Canadian Living, Conde Nast Traveler, Smithsonian and regional lifestyle magazines. Gilley says that newspaper and radio ads do not work for RMR. “We’ve tested radio; we went heavily into newspaper three years ago, but we weren’t pleased about getting stuck in the clutter of seat-sale ads. We don’t sell on price point—we’re an experience and that’s difficult to communicate with newspaper and radio. We’re a very visual product and need to be seen in full-colour.”

rocky4Gilley’s print advertising budget is around $850,000. Aside from bringing in those phone calls, the advertising provides very strong brand awareness. The ads tell people to call their travel agents, or the 800 number. This helps to drive business to the travel agents, who are also very important to RMR’s success.

“We support travel agents very strongly,” says Gilley. “It’s important that people deal with travel specialists. We’re happy to take bookings over the phone, but we don’t want to cut off the travel companies—about 60% of our business comes from travel agents. And unlike other travel-industry companies, we have not cut or capped commission rates.

“This business is similar to any manufacturing business. We design and manufacture the product. We sell it to the wholesaler, who sells to the retailer, who sells to the consumer. And then we have to secure distribution to get our product on the shelf. We have to build relationships, maintain them, and build new ones.

rocky7“That’s how we get listings and co-op deals for promotions and marketing. We forge relationships by having a unique product which complements what those in the travel business are trying to do with their companies. It has to be worth their while. We’ve made it worth their while by gaining the reputation of providing a superior product—whether it’s the end product or part of a package. We have excellent worldwide distribution—since September, we’ve gained 10 new American tour operators who previously weren’t selling Canada. We already deal with most of the large operators, but we like to have distributors of all sizes.”

Gilley joined RMR in 1997. At that time, the company’s marketing was very much grass-roots. There was no database, no print advertising. And the marketing budget was only 2%.Well, now the marketing budget is only 4%.

“It’s not a large budget, but that’s the nature of this business,” explains Gilley. This is a very labour- and capital-intensive business. To make a train move 10 feet, it takes literally every employee we have—350 people in sales, operations, reservations, guest services, maintenance. That’s why there’s a tremendous reliance on the travel and tourism network.”

RMR has come a long way, however. Its marketing strategy was set up in four stages, with each stage taking one year to implement and all four eventually running concurrently. The four stages are Response, Anticipation, Experience and Referral.

Gilley explains: “Response involved retaining an advertising agency [Vancouver’s Bryant Fulton & Shee], then ensuring that our brand was in place, and that our ads were ready to go, so we had a way of generating response from potential guests. And we provided our PR people with the messages required to generate exposure for the brand.

“Phase two was Anticipation. The best part of any trip is the anticipation of it—the ability to say ‘I’m going on this vacation and this is what I’m going to do’. If we wanted people to say ‘I’m going on an incredible rail tour in an awesome part of the world’, we needed to capture those elements in our materials. So we re-did our letterhead, our corporate identity, our brochures, vouchers, itineraries, travel guides—everything down to the travel wallets. We built a presence in the hotels and started to get into response marketing.

“The Experience component begins when you arrive at the train station to board. We created a product department which is a group of people dedicated to designing itineraries and improving the on-board experience. We own 28 motor coaches, so we branded those and changed the colour of our trains—to red, white, blue and gold. And we looked at all our souvenirs, to make sure that there was consistent branding and delivery throughout.

rocky3“That leads to the Referral stage. This is very important, as 26% of our guests are referred by friends and relatives. This is why service is such an important element in the branding of Rocky Mountaineer. It has always worked without prompting, but we decided to formalize that relationship and make our clients our ambassadors. So if they want to refer a friend or relative, we’ll send personalized referral materials. And this year, we gave all of our guests a three-minute commemorative video to take home and show their friends and relatives.”

RMR also sells full-length souvenir videos for $18.95. Gilley wouldn’t give any precise figures relating to profits, but did note that annual souvenir sales are well over $1 million.

In 1999, RMR started conducting direct response campaigns, all of which have been very successful. Last fall, it spent $37,000 on mailing a win-a-trip package to 20,000 people who had previously requested brochures. The result was 203 bookings, 511 guests and $1 million in sales. Another campaign was simply a questionnaire sent to 20,000 US households; it received 13% response.

The company does some market research, though not much. Focus groups are the communication check for creative and there has been telephone research. But the best research is done on the trains. Four hours before the end of each trip, guests are given reply cards. They have the time and the motivation to fill them out, and about 32,000 cards are received each year. The cards are checked every two weeks; if adjustments are indicated, they are immediately made.

“This is the best way to know how we’re doing,” continues Gilley. “But it also allows us to build relationships with our customers. We employ three people who do nothing but look after responses to guest comments. If someone says his coffee was cold, we send him a letter. If someone says that he wanted to buy a sweatshirt and they were all gone, we’ll send him a letter. If there’s something a little more serious, we’ll send an appropriate refund. We send out 10,000 personal letters annually in response to comments. rocky2

“Our market is people who are older—they love to be communicated with. They’re not used to getting acknowledgements of their comments from travel companies. So this practice, in addition to creating referrals, creates lots of goodwill and improves their overall experience. We aim to please and the follow-up makes the entire Rocky Mountaineer experience that much more satisfying.”


Blitz Magazine, March 2002

Tripping: YVR Rides High as #1


You need to fly somewhere. You want to get there quickly, efficiently and in a cost-effective fashion. Upon arrival at your destination, you grab your luggage and get a cab. Do you care which airport you fly into?

And airports are essential. All air passengers have to use them, like it or not. So do airports need to market themselves?

The answer to both questions is yes. It’s not something most of us think about, but airports do need to market themselves—vigorously—and the Vancouver International Airport Authority is particularly good at.

The Vancouver International Airport Authority (VIAA) is a 230-employee, not-for-profit, locally-controlled corporation to which, in 1992, Transport Canada passed the Vancouver airport’s management and operation. While the VIAA has taken flack for being secretive, it has done a tremendous job of managing, and selling, the Vancouver International Airport (YVR).

When it took over, the VIAA’s first order of business was to position YVR as a gateway airport—not necessarily a destination terminal. It doesn’t appear so on a flat map, but Vancouver is the closest North American city to Asia. Travelers can save an hour by flying into Vancouver from, say, Beijing, to which it’s 800 miles closer than is Los Angeles. So YVR positioned itself as offering one-stop access to North America from Asia. It wants Asian travelers flying to the US, the rest of Canada, Latin America and Europe, to fly into, and transfer from, Vancouver.

The other target was, and remains, the cruise industry. One million cruise ship passengers pass through Vancouver every summer. And they have a choice—they can fly into Seattle and drive up.

YVR had to meet the arrival and departure requirements of all these international travelers, in addition to the needs of notoriously picky Canadians. The task was to create a facility that was efficient, comfortable and accommodating to everyone.

In 1996, the International Terminal Building opened as the first terminal of its kind in North America. It was designed especially for international connecting passengers, with state-of-the-art technology for ticketing, baggage handling and customs/immigration inspection.

By 1996, $250 million had been spent on constructing the International Terminal, installing a third runway, renovating the Domestic Terminal, adding a new parkade and creating 109,000 square feet of retail space. Work continues. In 1999, $90 million was invested in infrastructure, renovation and expansion of facilities. Also that year, work began on the $40 million Airport Connector Project, which involves road improvements and a new three-lane bridge. The YVR South Terminal, which services domestic commuter, small regional and charter airline traffic, was also upgraded. (The cost of all of this has been helped along by the much-loathed Airport Improvement Fee: $5, $10 or $15, depending on destination, payable by all departing passengers.)

yvr1 yvr6

YVR’s location is, for an airport, incongruous. It’s only 20 minutes from downtown Vancouver but it’s on Sea Island, which is an environmentally-sensitive area. And it’s beside Richmond, a heavily-populated bedroom community. The VIAA pays rent ($64 m/yr) to the federal government, which owns the land, but it’s the caretaker of Sea Island and has to try to keep both environmentalists and Richmond residents happy.

YVR was one of the first airports to introduce a de-icing system which eliminates the pollutant urea from its ice control program. It maintains water, air quality and noise monitoring systems. It uses electric vehicles. It has a mobile, 20-unit environmental emergency response team. Its waste management program annually handles 470 tons of paper and 127 tons of compostable food waste. Construction projects are monitored for environmental compliance. It uses dogs to prevent bird strikes and negate the need for pyrotechnics—although YVR is located in the avian Pacific Flyway, its bird strike rate is less than half of that at other Canadian airports. From the PR perspective, all of this works—a 1999 survey found that 75% of locals had a favourable impression of this corporate citizen.

Most passengers don’t think about this sort of thing. They’re more likely to notice the airport’s amenities. Such as the 72 shops in the departure lounge. The concierge service, chapel, business centre, family rooms, nursery. The loads of inexpensive long-term parking and constant free connector shuttles. The art collection, natural light and mountain views. The dozens of multi-lingual volunteers. Cruise ship passengers have their own baggage belts and carousels. Fairmont Hotels attached a 392-room inn to the airport, which it bills as the world’s most luxurious airport accommodations. It offers day rooms, gym use, in-room airline check-in and satellite check-in. YVR’s positioning statement ‘Above & Beyond’ is something its management sticks to—and it’s true that a common reaction from arriving passengers is: “Whoa, nice airport.”

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Then there’s cargo. YVR has positioned itself as the global distribution centre for cargo between the world’s major trading blocs, particularly Asia-Pacific and North America. It’s a 30-minute drive from the US border, and from the Port of Vancouver, which is served by most international shipping lines, four railways and 400 motor carriers. The central Cargo Village houses 130 transportation companies, forwarders, brokers and other related businesses. The VIAA’s positive relationship with Canada Customs, and a pre-arrival review system, allow for international shipments to be released within 45 minutes. YVR also offers pre-clearance of US-destined cargo through Free Trade Zones (Export Distribution Centres), a 25% discount on landing fees for international all-cargo flights, a fuel tax exemption on international air cargo and 24-hour operations, all of which makes for a vast reduction in air cargo costs. Obviously, cost reductions make an airport attractive.

The pay-off of this investment and overlook-nothing organization is that, in 1999, 290,000 tons of cargo passed through YVR. That’s a 14% increase over 1998, far in excess of both forecasts and growth at other west coast airports. The International Terminal Building was meant to accommodate 8 million passengers; in 1999, 16 million passengers used YVR, allowing it to surpass San Francisco as the second-largest airport on the North American west coast. In 1994, airport revenue was $128 million, concession revenue $28 million. In 1999, airport revenue was $245 million, concession revenue $61 million. Today, YVR is one of BC’s most important economic engines, generating $4 billion in annual revenues. It supports 400 off-shoot businesses and 26,000 employees—more than the province’s mining and fishing industries combined.

In the International Air Transport Association survey of leading airports, YVR was ranked #1 in North America; #4 internationally (behind Singapore, Copenhagen and Helsinki). Business Traveler Asia-Pacific magazine named YVR its airport of choice, Conde Nast Traveler placed it among the world’s top ten. It has become a management model for airports around the world.

yvr5The VIAA subsidiary, Vancouver Airport Services (VAS), markets its expertise, operating philosophies and leading-edge systems to governments all over the world, which are rapidly dumping airport operation and financing on the private sector. VAS may take over whole airports, or perform specific services. It recently took over management of four airports in the Dominican Republic, as well as airports in Uruguay and Chile. It completed, for example, the business plan at St. Maartens, the reconstruction of the runway and apron at Moncton, the new retail plan at Wellington.

It’s easy to see that an efficient, beautiful, fully-outfitted airport is going to be attractive to those who have to use it. But VIAA has to work as hard to sell YVR to everyone who needs an airport.

Janice Antonson, the VIAA Manager of Aviation Marketing, explains: “A lot of people don’t think of airport management as a competitive business, but it is. Airlines and passengers have a choice of which airports to use. Back when Open Skies lifted restrictions on who could fly into Canada, we had a lot of new carriers flying into Vancouver and we had to compete with other west coast airports—LA, San Francisco and, to some extent, Portland. And we had to fill this new terminal.

“We work with the carriers that fly into Vancouver and are the liaison between the tourism industry and the aviation industry. Once a route is brought into Vancouver, we help market that route. Our job is to ensure that all airlines that fly in, as well as travel agents and tour operators, are aware of the connections available through the airport, and the facilities and services we offer.

“Education is a big part of the job of this marketing department. For example, to help Philippine Airlines establish the Manila-Vancouver route, I would go to the Philippines and meet with their employees, most of whom probably haven’t been here and don’t know the airport. I give a PowerPoint presentation on the airport and its location. I explain about Vancouver’s Transit Without Visa program, which means that most travelers connecting to the US, depending on where they come from, don’t need a Canadian visa. You come in on a flight from Hong Kong, you go immediately to US Customs, so you aren’t technically in Canada at all.

“When you explain this, people realize that they and their customers can save an hour in the air, and another hour by by-passing Canada Customs. When you shave off that two hours, YVR becomes the logical choice. And for business travelers, time is everything. The new airport in Seoul, for example, is over a hour from the city—YVR is 20 minutes from downtown Vancouver. That makes a big difference. And what a great stop-over city. On an overnight stay, you can go skiing, shopping, golfing—whatever, and make a short trip back for your flight out. These things are very important to passengers and airline employees. And once they know all of this, they choose Vancouver.”

Antonson also works closely with the cruise ship companies, through the VIAA membership (along with Tourism Vancouver, Tourism BC and the Port Authority) in the Pacific Rim Cruise Association.

“We have to work with both the cruise ship companies, and with the airlines that feed the cruise business,” she explains. “Despite the cruise passenger traffic we already have, we actually suffer in the summer because we don’t have enough seats coming into Vancouver. Sometimes we lose up to 11 busloads a day to Seattle because all the flights coming into Vancouver are full. So we work very hard to encourage the airlines to put on a bigger aircraft and more flights.

“We have the capacity for the traffic, but the airlines don’t have the aircraft on this route in the summer—their aircraft could be heavily directed at Europe in the summer. And cruising is seasonal. So it’s a big challenge for us to keep the carriers bringing in their service year-round. The airlines have to make sure that the yield from the seat price is right, and that it’s good enough to pull a plane off another route. And they have to know that the plane bringing in those cruise passengers will leave full. It costs a fortune to leave a plane sitting on the tarmac—planes have to keep busy, so we have to present airlines with positive passenger flow numbers.”

Antonson has found that airline economics leaves little room for patience. “Once we get a flight coming into YVR, we need time to market that flight. For example, American Airlines was flying non-stop Vancouver-Miami, which was excellent, but that route was pulled after four months because the flights weren’t full. But four months isn’t enough time to fully market a route and make travel agents aware of it. It takes a lot of time and effort to make a flight successful. But the airlines have to put their aircraft where they’ll make money.”

Antonson, who would not state her marketing budget, makes sales calls to travel professionals and, for travel agents and tour operators, she produces numerous brochures, maps and booklets—everything they need to know about the airport, its facilities, its connections, and what happens to passengers upon their arrival. For others, annual reports, Skytalk Magazine and the annual Airport Business Report, are helpful. Then there’s the hard-core process of convincing the airlines to book their routes into Vancouver. All of that goes on in boardrooms during months of negotiations.

“Our Air Service Development people are in charge of negotiating with the airlines,” continues Antonson. “Some airlines approach us, we approach some. It’s an extremely complicated business and most people have no idea of what goes on behind the scenes. We can’t have carriers landing here unless they can feed into the rest of the network—they have to be able to pick up traffic elsewhere, they have to have the right aircraft and the capacity to service the route. During negotiations, they discuss everything from who the ground handlers will be, to slot times, to catering, to aircraft size, frequency of flights, destinations, where their airport offices will be.

“The airlines have to be sure that the route will be profitable, because anything relating to the operation of the aircraft is their responsibility and cost. They become YVR tenants. They have to pay landing fees, fuel taxes, airport taxes. They have their own employees, including mechanics, on the ground. It’s a significant dollar investment for them, so we show them the traffic numbers; they see how active we are at marketing the routes. It’s not something anyone takes lightly—every landing of an Air Canada 747 from Hong Kong, for example, generates 86% of a person-year of direct employment.”

Most airports don’t even have marketing departments—just communications offices. But as YVR was the first Canadian airport to privatize, the VIAA may have felt pressure to succeed, or saw it as an opportunity to do something very well. Either way, very little has not been done well.

“YVR is not just a pretty building in a pretty city,” says Antonson. “And our mandate is to market YVR as the Pacific Gateway of choice. We’re in a competitive business and have to work to get the airlines to come here and stay here. So we’re aggressive about it—we create and try new programs first, and now we’re the leader in airport marketing. YVR is a great success.”

Blitz Magazine, July 2001

Case Study: It’s Onward & Upward for Uniglobe Travel


The airlines have slashed travel agent commissions; we’re supposedly in recession. ‘Tough times for travel agents? Not if they’re with Uniglobe Travel.


You may recognize the name of U. Gary Charlwood, Chairman of the massively successful Century 21 Canada. The business philosophy of Mr. Charlwood (as everyone calls him), in a nutshell, and as his entrepreneurial history suggests, is ‘Sell, Sell, Sell, Service, Service, Service and Be Very Very Well-Organized.’ He also believes that, once you articulate your vision and give your staff the tools with which to carry it out, you should leave everyone alone to do their jobs.

After building his real estate operation into the force that it is, Mr. Charlwood knew that his philosophy, coupled with his co-operative consumer marketing methods, could be applied to other service industries; and he believed that an internationally-recognized consumer travel organization could succeed through strength in numbers of locations, and high sales volume. In 1980, he founded Uniglobe Travel International.

Today, Uniglobe is the world’s largest travel franchise company, with 1997 sales of $2.7 billion. It employs 6,000 people at 1,000 offices in 20 countries, with head office in Vancouver. It owns Uniglobe CruiseShip Centres and San Diego-based convention organizer Uniglobe Main Events. It was the only travel company recommended as a franchise buy by The Wall Street Journal’s 1998 National Business Employment Weekly Annual Listing and, in the travel industry, only American Express has higher unaided brand identification. Its first Middle East markets opened last year; it will next expand into Central and South America, the Far East, and Africa.

The reasons for Uniglobe’s success are varied, but basic.

First, it filled a niche. Any travel agency, of any size, is built on a core base of business accounts, and it used to be that only large corporations had access to the complete range of travel perks and services. Uniglobe specialized in providing big company services to small and mid-sized businesses (with 5-50 travelers). It now holds 100,000 corporate accounts; 70% of its business is corporate, but its goal is to increase its leisure business and bring the mix to 50-50.

uniglobe2Next, Uniglobe offers a superior franchisee support system. To be successful in this ultra-competitive field, travel agents need strong brand identification, technological support, access to professional training and development, back-office management controls, effective marketing plans, solid relationship with preferred suppliers and access to promotional initiatives. Uniglobe delivers it all, right down to free office automation. The high brand awareness is a big draw for potential franchisees, and Uniglobe spends $20 million annually on international brand identity, advertising, promotions, public relations and direct sales programs.

Another key to Uniglobe’s success is its commitment to a high level of customer service. Its research shows that consumers expect a professional agency to address four service categories: Cost Containment & Control, Experience & Expertise, Accessibility & Advanced Communications, and Reliability & Responsiveness. So Uniglobe gives people what they want. It guarantees the best possible value in all fares and constantly evaluates cost-management strategies, savings opportunities and spending patterns. Experience & Expertise are handled by Uniglobe’s franchise recruitment and selection process.

“We’re so well-known as a leader in both travel and franchising, that people looking at franchising automatically come across Uniglobe,” says Laurie Radloff, President of Uniglobe Travel Western Canada. “And when we’re looking at new markets, we’re careful in our recruitment. A lot of people today are dissatisfied with what they’re doing. We know that there’s great personal satisfaction in owning your own business, and we know that Uniglobe agents love what they do, so we do print and radio campaigns with the theme ‘Do What You Love’. We talk to the banks and chambers of commerce to see who’s successful in their areas; we look at existing agencies to see if there are people who we feel can represent our name. We never place a franchise for the sake of having an outlet—we want to make sure that our name and brand are handled properly and that we have the right cultural fit. There’s a very high level of trust among those using our name, so we have to have the right people.”

Who have to have money. “They do have to be properly capitalized, although we don’t cause them to buy any products,” continues Radloff. “They pay Uniglobe a royalty, starting at 10% for every dollar they earn in commission. As sales rise, that percentage declines. That royalty could be a little high, but that’s because Mr. Charlwood knows what level of support franchisees require. We often hear about franchisees of other companies who are unhappy with the level of support they’re getting from their franchisor but that’s because, financially, the franchisor can’t do more.”

Uniglobe provides professional training in sales, customer service, marketing and operations, as well as on-going support in business administration, sales development, financial controls, market research, strategic planning and supplier relations. All of this translates into better customer service, and the level of experience and expertise that customers want.


Consumers want accessibility? No problem. The Uniglobe Customer Commitments promise that phone calls will be answered by the third ring, that callers never hold longer than 30 seconds, and that every call is returned within the hour. You find yourself trying to tell the customs officer/janitor in Novosibirsk that you’re supposed to be in Newark? Uniglobe has a 140-language interpretation service. ‘Course, that shouldn’t happen anyway, because Uniglobe guarantees error-free reservations and 100% accuracy in documentation. There is a Lost Luggage Control System, a 24-hour Rescue Line and the promise that service complaints will be resolved within 48 hours, supplier complaints within 15 business days.

Technology is another important component at Uniglobe, which has its own software: Travel Manager, and Software for Agency Management. Also, Uniglobe Net News, an extensive agent Intranet, piggy-backs Uniglobe Travel On-Line, an Internet booking and information system which was launched three years ago.

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With Uniglobe Travel On-Line, consumers can book car rentals, hotels and flights, choose seat assignments, order special meals, obtain street maps, book cruises and tours, research destinations and find restaurants, currency information, last-minute promotions and weather reports.

“The Internet travel segment is growing very quickly,” says Radloff. “Booking travel this way is a big leap of faith at first, and there’s no question that a well-trained travel consultant is the best value. But if a client’s on a plane at 2:00 a.m., and wants to make a reservation on his laptop for a 10:00 a.m. connecting flight, we have to be able to provide that service.”

Uniglobe is careful to see that this system does not exclude its agents. An income-splitting formula pays franchisees a referral fee, 10% of online revenue is distributed through a group fund, and another 10% goes into an advertising fund.

“The site is good for our agents too,” continues Radloff. “At 2:00 a.m., that client’s only other option is to call the airline to book that flight. This way, the agency gets a little commission and gets the data on the booking and can follow up with the client. The site gives clients 24-hour access; it gives agents a 24-hour office. Plus, you don’t have to be an existing Uniglobe client to use the online service, so agents gain access to new clients.”

Uniglobe Travel On-Line is a separate public company and its stock hasn’t done that well, but the site is coming along, with a booking-to-looking ratio of 1:74 and sales of $5 million to November 1998, as opposed to $1 million for all of 1997. And it’s a great system. But so is Microsoft’s Expedia, one of the web’s most popular travel sites. So, in November, Uniglobe entered into a joint-marketing agreement with Expedia. This accomplished two things—a tough competitor is now a partner, and Uniglobe has access to Expedia’s three million customers and is closer to attaining the aforementioned goal of a 50-50 leisure-business mix. (In the travel business today, leisure is the hot market—no matter how tight the economy is, seniors and Boomers will keep traveling.)

Cyber-competition is only one challenge facing travel agents. There are also increasingly complex bulk-purchasing and fare packages, frequent flyer programs and the ubiquitous fly-by-night operations which muddy the waters for reputable companies. Consumers now have so many choices that a successful travel agency has to give customers special reasons to come to it, and stay with it. Those reasons have to be brand loyalty and value-added products and services. Which have to be communicated through marketing, advertising and public relations.

The Uniglobe marketing plan is written following consultation with franchisees. Preferred supplier recommendations are then collected, and listened to. All travel agencies have preferred-supplier relationships; Radloff says that Uniglobe takes its relationships more seriously than does its competition. And these relationships are crucial to stretching the Uniglobe advertising budget. Uniglobe spends $1 million annually on straight advertising, but that budget is extended by as much as 40%, due to the fact that 75% of advertising is co-op (and most visuals are provided by suppliers).

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The plan includes four main marketing pushes per year; one or more could be on cruises, one could be the Caribbean in January, another on Europe in June—it depends on supplier input and on what key interest areas have been identified among travelers. The international quarterly campaigns come out of California; they are supplemented with regional, then local, campaigns. Most advertising is print; outdoor and telemarketing are not used. There are six to eight weeks of television each year, radio use is rising and direct mail is a constant, with 100,000 pieces mailed quarterly.

The non-Canadian markets handle their own advertising. Radloff says that, in Canada, the advertising focus is on offering holidays at destinations where the Canadian dollar will go the farthest.

“We sell on value, not on price. For example, people frequently say they want an inexpensive holiday and that they don’t care about their hotel, but that hotel becomes important when they get there. We can provide a nice hotel at a price they can afford because we use our clout and buying power to deliver quality products in a cost-effective manner. We also provide products like Rescue Line, Travel Manager and a preferred-rate hotel program called Key Cities—this is all extra value at no extra cost to the consumer.”

Uniglobe’s strategy for 1999 is to position itself as ‘The Navigator of Options’, with the goal of convincing consumers that Uniglobe agencies can best help them wade through the sea of travel options. Uniglobe’s corporate marketing uses the Uniglobe Travel Plan, a travel purchasing system which incorporates Uniglobe Travel On-Line and the Uniglobe Cruise Program. From the client’s perspective, it is a travel management and purchasing system; from the agent’s point of view, it is a sales kit with corporate proposal templates and a PowerPoint presentation.

“Our corporate marketing is mostly face-to-face,” says Radloff. “We have a professional, well-trained sales force and our salespeople are out knocking on doors, calling on clients, making presentations. No one at Uniglobe waits for the phone to ring—they’re out closing sales and getting the business.”

One very important aspect of Uniglobe’s communications activities is positioning. Not positioning as in ‘We’re A Really Good Travel Service,’ but as in ‘We’re A Really Good Travel Service and We’re On Your Side!’.

“Since its inception, our focus has been on building the Uniglobe name into the most widely-recognized name in travel—to be to travel what Campbell’s is to soup,” explains Radloff. “So while the competition advertises price, we talk about other things. People like to spend their money locally, so we talk about the fact that Uniglobe’s agencies are local but have global clout. But, to take that name recognition further, and to inspire confidence, we’ve positioned ourselves as problem-solvers and as the advocate for the traveling consumer.”

Two years ago, when Canadian Airlines had its near-death experience, Uniglobe was the only travel company that leapt into the fray, with Radloff appearing on Canada AM and various radio programs to talk about how having only one Canadian airline would not be in the best interest of consumers because of the negative impact on service, pricing and availability. While we assume that there’s no point in going to Hawaii because of the exchange rate, Uniglobe is out telling the media that the Asian market for Hawaii has withered, hoteliers are under tremendous pressure, air space has tripled and fares are down from $600 to $99. Every time a travel scam pops up, so does someone from Uniglobe, educating consumers about what to watch for. And, thought his may be stretching things a bit, after the recent Carnival Cruises on-board fire, Uniglobe became the exclusive dealer of Evacuate, a smoke-hood-in-a-can which provides 20 minutes of clean air. 

All of this is advocacy, it is brand-building, it is confidence-inspiring PR. And PR is a huge component of marketing at Uniglobe, where every message sent to the public is, quite literally, identical. This is achieved through the Agency News Media Program, a PR-Program-In-A-Box created by Uniglobe’s PR firm, Vancouver’s Verus Group.

“Uniglobe is one of the more enlightened corporations I’ve worked with, in that Mr. Charlwood has always instinctively understood that marketing and PR should be inextricably linked,” says Verus Group president Wayne Hartrick. “In some organizations, the PR and marketing functions are clearly delineated, which is a shame because there should be a coordinated strategy between them so that every dollar and every employee hour spent is leveraging their combined impact.”

To that end, Uniglobe’s four annual marketing pushes are supported by PR pushes on the same subjects. If the company is marketing cruises, Verus writes releases on cruises. It then sends the releases to national publications, then to all franchisees, who send them to their local papers. If a local paper asks a franchisee to write an article, it’s ready to go—Verus has already written it; the franchisee just changes the by-line. Promotion may be the intention, but it doesn’t carry the aroma of advertorial; publications passing it on to their readers do so because it’s useful, helpful information.

“This method has helped our agents become known in their communities as experts in their field,” says Radloff. “It is an extremely cost-effective way of achieving our marketing objectives, because it’s exposure that brings with it a credibility that you won’t get if people know you’ve paid for it.”

As mentioned, Uniglobe’s Agency News Media Program is literally in a box. It is a kit which includes articles and news releases on the subjects determined by the marketing plan, plus a 30-minute video, and a workbook that teaches franchisees how to deal with journalists and earn credibility in their communities. New franchisees come to Vancouver for PR training, then Verus Group staffers coach agency owners over the phone, encouraging them to work the program, and motivating them to build their profiles in their locations. If that sounds like a pain for both sides, it evidently was, initially.


“The program takes patience and commitment,” says Hartrick. “It’s a challenge to get everyone to do PR because people are busy and there’s always another priority. And they get discouraged—we’ll issue a release, the franchisee can’t find an interested reporter and gives up. We encourage them to try other things, show them how they can become regular columnists and how to make presentations to corporate and community groups. This program of encouragement is crucial. Eight years ago, we just distributed the kits and had a 10% implementation rate. Now, with daily contact, we have a 62% implementation rate, and it’s climbing.

“This is all about credibility. If you’re writing in the local paper, or being quoted by your local media, your other marketing activities are met with less resistance. Uniglobe’s combined programs are generating 400,000 impressions per day from print alone, and these impressions carry the extra impact of having grass-roots credibility.

“Our research shows that most consumers see travel as a problematic experience,” concludes Hartrick. “We make sure that Uniglobe gets its name in the media for the right reasons—because it’s solving problems for people and providing useful information as well as quality, high-value products. The whole principal behind this, after all, is to do something well and get credit for it.”


Blitz Magazine, January 1999