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Exclusive eTN Interview With Kathy Sudeikis

Tourism cannot end under any circumstance, former ASTA head says

Nelson Alcantara, editor-in-chief  Oct 27, 2008

Kathy Sudeikis previously held the position of president of the American Society of Travel Agents (ASTA). Last week, she addressed the crowd that gathered for the International Institute for Peace through Tourism's first European conference in Leeuwarden, the Netherlands. In her keynote speech, she touched on key issues that are of particular significance to the current conditions in the tourism industry. eTN had some questions for her, and she graciously answered them.

eTN: You made the argument that tourism cannot, under any circumstance, end. Do you think this applies to Zimbabwe?
Kathy Sudeikis: I think these places are time tested. They have been here forever; there's an evolution. You know, there was a time when China was a questionable spot to go because of human rights issues. So I think, really and truly, every place is cyclical and will come back, but it's a big world. And so, we are sending our clients where they can have the best experience, and that's important to us because we want them to repeat their travel with us. And it's about being a trusted advisor. If they want to go to Zimbabwe or another place that might have some high profile in the consumer press, they can go online and do it, and it's only when a third party – a travel agent – comes in as an advisor and an assistant, [they] can suggest that they look through all of the plusses and minuses of going to a destination. And I think that's the kind of strength that a travel agent as an unbiased, third party can give the consumer and why we have value and why people want to pay us to be their consultant.

eTN: Based on what you know of Zimbabwe, as of right now, would you recommend for ASTA members to suggest Zimbabwe as a destination?
Sudeikis: Well, we are having a meeting in South Africa in April of this year, and there are a percentage of people who still want to see the [Victoria] Falls and those kinds of things, and it's far enough away that you don't necessarily go many times to that neck of the woods. So I think it's a day-by-day situation at this stage of the game until some decision is made…

eTN: The tourism infrastructure is there.
Sudeikis: It's definitely there, yes.

eTN: So, from your perspective, how can the tourism industry influence the outcome of the current situation?
Sudeikis: I think it's one step at a time. I think the governmental issues have to be solved before the tourism infrastructure. I don't expect that they'll destroy the tourism infrastructure. It's an important asset to the country. Now, I just think it's a wait-and-see situation.

eTN: The Namibian tourism minister made an argument stating that tourism must not be politicized. What's your take on that?
Sudeikis: I agree that it shouldn't be politicized, but when there's an issue of safety and there's a state department warning from the American government, it's very tough for us… Our clients can't be covered by insurance and things like that. And sometimes you need those kind[s] of protection when someone could fall and get hurt, and forget what's happening in the world or in the country that you're going to, you do need protection, just insurance in general, and when there's a state department warning, you can't have that insurance.

eTN: You bring up travel advisories – do you think they're fair, and do they really have an impact?
Sudeikis: You know, I am not sure that they're fair. I've heard many countries speak at forums like this. To say that, you know, especially Kenya most recently… Well, Kenya has been on the warning list for ten years practically, and they say that it's very much a political thing. But people like Dennis Pinto have been able to come out, and when the industry trusts him as him and the Pinto family, then I think we feel better about going to Kenya under their guidance and under their protection. But again, you know, there are ways to travel safely than to just go on the Internet and find yourself in trouble.

eTN: Some ASTA members are concerned about what they feel is ASTA's inaction regarding the airline industry's treatment of travel agents, what's your comment?
Sudeikis: You know,/ that's such old news. The airline industry has done to its own employees and its own shareholders what it did to us 10 years ago. And, you know, we cried, we fought, we sued, we went on bended knee. It was a business decision, and the alternative was pretty grim. So, I would tell you that travel agents have learned to survive, and there's a new ASTA that is hugely successful with people who are in the business of selling travel, and that's ASTA's new motto. We have new membership levels for premium people that pay US$2,500 to be members of ASTA, and that number is growing every day.

eTN: What do travel agents get for that membership level?
Sudeikis: They get the opportunity to have the Washington ASTA staff be their problem solver, their collector of information.

eTN: Crisis management?
Sudeikis: Everything from… Well, they've just put a crisis management packet [together] actually on behalf of the members and [it] tell[s] them how to deal with the crisis in a recession and things like that. No, you have a point person that you can ask anything of. You can ask them to help you with press releases to launch something. You can help them assess a business in another town and whether or not you want to purchase them. They'll help you with tax questions, issues of… airline issues – they're there as an advocate, but you can't change things lots of times with the airlines; it's still that unilateral regime. But we have had some very strong successes. Just in the last six months, ASTA won a case… The ARC [Airline Reporting Corporation] cannot charge more for the services that they are doing right now. So, we are doing a lot politically in terms of reaching out to the other industry associations and helping to affect sort of a one-voice opportunity to speak in Congress and the halls of Congress. That makes a big difference. We found out after September 11, that there were many divergent interests, and the airlines all came together on one page, battled it out behind the scenes, and sent one guy to the front, and he won them all sorts of concessions. And as the travel agency, or the rest of the travel industry found out, we were all at loggerheads with each other, and no one seemed to have any success. I also think the issues are much more serious now. You do want someone like ASTA in your corner to be ale to run interference for you and to help you plan. Your actual team leader at ASTA will answer so many questions for you and help you go on a business plan, for example, and all of those kinds of things. Actually agencies that buy the premium membership are pretty well established, but they'll give you legal advice, as I said, tax advice, and that can pay for itself very, very easily. And we continue with education. I mean, this International Destination Expo that we have is to foster the idea that we go to a destination and really and truly learn about the destination – the smells, the sights, the sounds – you can go to and sample the restaurants, learn the maitre d's names, you can learn the names of craft shops and create relationships so that you can be smarter than the Internet to help your client to do the things that they want to do.

eTN: As an organization, what is ASTA's role in the whole economic crisis situation?
Sudeikis: I think ASTA's role right now is to help our members get through this economic crisis and remain viable.

eTN: Some are saying there is no impact. How do you respond to that?
Sudeikis: You know, I'm in a pretty high-end business area. I had my first cancellation for a Christmas cruise on Crystal Cruise Lines – two couples at US$20,000 each. That hurt. It came at the date the final payment was due and on October 9 without a penalty, and I saw that just in the last couple of days, they pushed back penalty dates and things like that. I think I could have held onto them a little longer because, if I had some more time… but it was a do-or-die date or they'd lose 10 percent of their investment. But it really depends on if your financial advisor is someone telling you that the glass is half empty or the glass is half full. The clients in New York got a call from their investment banker that said you've lost 30 percent of your net worth. The people in California, the second couple, weren't quite as hysterical about it, and they waited until the very last minute to make their decision.

eTN: Do you think that your situation represents what's going on in the industry?
Sudeikis: I think we're in a perfect storm. I've been in this business long enough to know that every time there's an election season, a national election, there's a lull. There's a lot of anticipation; there's a lot of waiting. I think we're also just barely in the cancellation period for this Christmas to see what business holds on and that kind of thing. I understand there is still space available on the airlines and in the nicest resorts, but if things change at all, those things will fill up by the holidays.

eTN: You think the industry will adapt to the current situation?
Sudeikis: You know, there aren't… For the truly, true, luxury client, it hasn't been affected. It's the people who have investments that they are trying to live on and thought they were safe for the next few years that are the most anxious. And they may feel like they shouldn't go until those 401(k) balances gain some strength. But I think there's an awful lot of people in this world who do what they want to do, and travel is an important right for people to get away from the stress of all this economic issue as well. I am cautiously optimistic that the bottom will not drop out completely, but I'm not a soothsayer, so…

eTN: You brought up rights. What is your take on the so-called "bill of rights" for airline passengers?
Sudeikis: ASTA has been channeling a "bill of rights" for more than ten years, and as this Kathy Hanna has just found out, the congressional delegations have more free trips and more upgrades and more seats on planes than they have enough votes. And, you know, gee, she was so surprised. ASTA is fully supportive of all of these traveler's rights things, but when people say, what's ASTA done for you lately, we can't continue to put resources and money into an area where we're going to be taken advantage of in the end in a political arena where they have a lot more to lobby it with in the end. It's unfortunate, it's inappropriate, but it's the reality, so… They say it will make it more expensive and they're too hard pressed; seems to me that you should be able to expect certain things from an air contract.

eTN: In our inquiries, travel agents don't want to be identified because the bulk of their business is still attributed to ARC and being identified could get back at them. How do you respond to those [agents]?
Sudeikis: You know, that's been a very real fear for a long time. I'm sort of over that because they know I talk back, and I always have had an informational and two-way street relationship with the people at ARC. They know what I think makes sense, and what I think is appropriate, but I don't speak for ASTA any longer because I am the past president. But I haven't changed my position on a lot of things and neither has ASTA. But I can imagine that people don't want to have their business singled out for some sort of a revenge by ASTA, but I'm already past that.

eTN: What is ASTA's message back to the airlines?
Sudeikis: Oh, gosh. We need you to be successful; we need you to be healthy. I'm in Kansas. You don't go anywhere from Kansas without a strong airline community. We're not in conflict with them; we're about supporting them to be successful any way that they can be. We have better ideas, we think, in terms of not nickel and diming people to death. They have their problems about market share and not raising the fares and putting on surcharges. I think all of those are really strenuous issues, but the ala carte airline ticket, I think, is here to stay, with additional services – food and baggage and whatever else – being additional charges. But we want them healthy, we need them healthy.

eTN: It's interesting, because travel agents used to be able to make money off of the airlines, but the airlines now have managed to make money off the travel agents.
Sudeikis: And that's such old news. We need to all be in this together at this stage of the game. When the airfares are this high, it's a diminishing return. This is all for one and one for all in a really bad economic time. Yeah, we have differences, but we can't be a strong industry without each other.

eTN: Don't you feel, though, that you're supporting the airlines, and you're not getting that same respect?
Sudeikis: But no one in the industry has gotten that from the airlines for years. It's still a reality – you can't get anywhere from Kansas without an airplane. You know, what am I going to do? We have Southwest as our major carrier – they get it right, so I'm lucky. And the other airlines haven't figured out what they get right. What they get right is, that the money is in the system, but it's money that anyone in another name can use and without penalties and all of that kind of stuff; you're not penalized by changing the travel passenger or the itinerary and it creates a sense of we're in it together. You don't get your US$289 back, but your US$289 can be used another time on another trip or for another person. It makes all the difference in the world if you have a big family.

Tourism cannot end under any circumstance, former ASTA head says
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