Advance Reservations has grown beyond Utah to become the largest ski-tour operator in the U.S., booking 30,000 packages a year. Victoria Vacations is set up to top that. The new firm opened last summer in Boulder, Colo., with 12,000 square feet of space hard-wired for 75 computer/phone stations and staffed initially by 30 intensively trained reservationists, who will be on duty from 7 a.m. to 7 p.m., Monday through Friday and from 9 a.m. to 5 p.m. on Saturday.
Smith, an old hand at reservations-systems, got financial backing — to the tune of $2 million in capital investment and credit — from Victoria Ltd., which owns Breckenridge, Colo., and Stratton, Vt. “We don’t get our direction from the Japanese parent company,” Smith says, “but they demand a commitment to excellence.”
Vic-Vac, as the new company was soon nicknamed, will handle full air and land bookings to create mix-and-match packages tailored to the needs of individual skiers and groups. The company will deal directly with skiing clients as well as travel agents to sell 18 U.S. and Canadian ski resorts, all, except Stratton, in the West.
Smith is confident that customers will get, and appreciate, a higher level of service from Vic-Vac compared to other ski-package wholesalers or most one-resort systems. From reservationists who answer the phone promptly and have thousands of bits of specific data a keystroke away to having travel documents shipped via Federal Express, Victoria Vacations is geared to offer crisp, sharp service.
Using Vic-Vac’s bulk-purchase deals with various airlines, resorts can tap into markets where they might otherwise be limited by their own airline-linked packages with another carrier. The system can easily handle such complex bookings as groups with multiple points of origin heading for the same resort, which is estimated to account for 30 to 40 percent of all destination trips.
Technology Driven
Vic-Vac’s tools of the trade are state-of-the-art everything. Sequent, a distributed-processing computer, has a new technology said to be the fastest using Unix languages, including software tailored for Victoria Vacations’ needs. It has the capacity to give up to 250 reservationists at a time simultaneous access to huge volumes of detailed data. Vic-Vac’s system also is interactive with SABRE, an airline reservations ticketing system, through which tickets on all carriers can be issued.
Its Aspect phone system is a full-calling center. In addition to a toll-free number (800-800-8888), Victoria Vacations is the central reservation number for Breckenridge and Ski The Summit with dedicated phone lines and computer-screen identification that enables operators to answer: “Breckenridge (or Ski The Summit) reservations. How may I help you?” The system has the capacity to add other resorts if contracted to do so.
Aspect’s voice-mail system, known as accumulated call distribution, includes such capabilities as automated callbacks during peak times. When the queue is hopelessly long, the caller will be advised of a callback time and asked for a number where he or she can be reached. “A person who just calls for a brochure won’t have to wait in a queue for his call to be answered,” Smith says. “He’ll punch a number and leave his address. The request will be processed that night and the brochure will go out first class the next day.”
A client who wishes to speak to a reservationist will get on the line with someone — usually a skier or at least a skiing dropout familiar with the sport — who has spent two weeks in a training room and two weeks with live, on-line supervised training. Reservationists can help skiers narrow their selection with a keystroke selection system. For example, “walking distance of the lifts” would be keyed in, as would “resort less than two hours from the airport,” “one-bedroom condominium,” “fireplace,” “restaurant on premises” or any other parameters a customer sets.
Smith guesses that 55 percent of Vic-Vac’s business will come from agents. “We can really be an asset to a travel agent,” he says. “The skier usually knows more about skiing than the agent who makes the reservation. We’ll help improve the agent’s learning curve.”
Perceived Need
In 1986, before Victoria Ltd. bought the ski area, Breckenridge, Colo., embarked on a research project to explore the possibility of creating its own reservations system. “We were the only area of any size that didn’t have one,” says marketing VP David Peri. “We found that the customer was putting a stopwatch on every service. It wasn’t that Breckenridge was at a disadvantage against other resorts, but skiing was at a disadvantage against other destinations. It took seven to nine phone calls and close to an hour to put together the components of a ski vacation. According to an AT&T survey of ski-area reservations systems, 90 percent of the calls weren’t being answered.
“The problem was much bigger than Breckenridge,” he says. “We explored an all-Colorado reservations service and invited five companies, including Advance Reservations, to give us presentations on how they’d do a statewide system. The answers were something on a scale that no one had done before — for a cost no one had spent.”
Breckenridge’s studies also unearthed what Peri calls “scary” findings regarding travel agents. “Twenty years ago, the average agent was a professional with 18 years on the job who viewed a complicated booking as a service and a challenge. Now, the average agent is a young person with three or four years of experience who’s passing through the travel business to see the world before going on to something else. Because skiing is so complicated, it was being taken off the shelves. Cruises are the path of least resistance, and that’s what they were booking.”
Commissions and Competition
Vic-Vac was set up specifically to address those problems, with both technology and trained personnel, and the result was the ability to offer skiers and travel agents one-call shopping, with a flat 10 percent commission on the total package including taxes. Vic-Vac also pays Federal Express charges and trip-cancellation insurance. The company’s profits will come from markups on bulk-rate air fares and from commissions paid by ground transportation suppliers, car-rental firms, ski-resort accommodations and ski areas themselves for lift tickets, equipment rental, ski school and other services.
These commissions from suppliers can be high, Smith says, “in the 15 to 30 percent range, depending on demand and volume.” But he says ski areas that are scared off by such numbers aren’t looking at the big picture. “It’s a question of yield management,” he says. “If you’re empty in January or April, you’ll pay anything for business. Is it cheaper to build a cruise ship than a ski area? Credible wholesalers get 20 to 40 percent, because cruise lines pay big commissions at off times. A berth that’s empty when the ship sails is worthless. Cruise lines know that.”
Smith believes that skiing is (forgive the pun) in the same boat. He sees Vic-Vac as offering an enhanced level of service to the consumer “in the context of industry marketing efforts,” which he believes will make skiing more competitive with other vacation options. “An impediment to skiing’s competition with warm-weather destinations has been the hassles. This [company] is directed to correct that,” says Smith.
Vic-Vac’s way of doing that will not only ease the hassle for the consumer, but help fill individual resorts’ low-season gaps. “Commissions don’t really matter,” Smith continues. “What matters is gross income. If I bring in a group of 200 skiers, you can pay 40 percent from those lift tickets and still make money. It’s the same if I deliver customers who stay one to one-and-a-half days longer than average and spend more money, or bring in skiers when there wouldn’t be any, it’s worthwhile to a ski area.”
Other industry experts — including those whose resorts are not on the Vic-Vac roster — agree. “As an industry, we do a pitiful job of efficiently and swiftly processing reservations,” says Jay Peak’s Bill Stenger. “We don’t make it easy for the skier to book.”
Bigger Buys
Smith believes that skiers who book total packages through a wholesaler buy more components than if they simply come with an airline ticket and accommodations reservations. “A skier who books a whole package will buy a six-day lift ticket and maybe ski just four-and-a-half days,” he says. “If he buys the ticket at the resort, he may buy fewer days.”
Vic-Vac intends to be a high-visibility player in the ski-vacation booking game, with four million four-color catalogues and an anticipated 10 million impressions from an advertising campaign in consumer skiing and travel-trade publications. With its technology and expertise, Vic-Vac also can be an inbound operator for traffic originating from abroad, and it plans to do for golf in summer what it does for skiing in winter.
The first-year goal is to book 20,000 packages, which Smith sees as realistic, noting that “Vail came close in the second year of its reservations service.” Smith helped streamline the Vail/Beaver Creek central-reservation system and is in a position to know.
Vic-Vac’s first-year catalogue includes Victoria’s two U.S. ski resorts, Breckenridge and Stratton, plus Aspen, Banff, Beaver Creek, Copper Mountain, Crested Butte, Deer Valley, Jackson Hole, Keystone, Lake Louise, Park City, Snowmass, Steamboat, Vail, Whistler/ Blackcomb and Winter Park.
If that list appears to make Victoria Ltd.’s right and left hands swiping at one another, Smith doesn’t see it that way. “We’re customer-driven,” he says. “If I offer just Breckenridge, I won’t get the deals or be able to do the marketing. I want the customers to go where they want.”
Smith sees Vic-Vac as a complement to, rather than a competitor of, individual resorts’ central reservations operations. In fact, Vic-Vac was created because Breckenridge wanted to start its own in-house reservations center and hired Smith to do the strategic planning. “With Victoria’s status as a major ski retailer in the world and as a resort developer here, it became apparent that a more strategic business plan would be to create a system that would facilitate any skier from anywhere going to any resort,” he says. “The idea grew into a wholesale tour operation. To offer a high level of service, we have to offer a range of resorts. Our idea is to offer the most return on the vacation minute as Peri calls it — not just the vacation, but the planning part too.”
Industry Reaction
Even executives whose resorts aren’t on Victoria Vacations’ roster are high on its potential. “Snowmass properties generally don’t work with wholesalers,” says Nick Nicholson of Snowmass Resort. “They pay dues to us. We don’t charge them a commission on bookings and, in absolute terms, we are not empowered to work with anyone who gets more than a 10 percent commission. When a tour operator rolls through, we set them up with properties on a one-to-one basis. My personal opinion is that they should get bookings wherever they can. For the ski industry at large, the wholesaler, the middleman has had a key role in developing the product that consumers are purchasing. Here, the Snowmass Resort Association controls the inventory and it behooves the consumer to call us directly.”
Foster Chandler of Killington, which has a comprehensive in-house reservations operation, says: “If you have someone out there selling for you, it can only help. That’s the idea of travel agents. A wholesaler funnels agents’ clients from various points. “He can get bigger commissions, which then can be split back to the agent. Victoria Vacations is no different in concept from some of the other tour operators, and if they operate as a pure entity and sell all properties equally, it will be good for skiing. If you have an outfit like Victoria Vacations selling the concept of skiing, it will help program the public to think of skiing as a vacation option.”
That’s just what Smith proposes to do. For the customer, “I will guarantee ski areas that we will answer the phone more quickly and accurately than they can,” Smith says. “Being bigger doesn’t automatically mean being better, but we are better. We are available with accurate information. We offer a high level of customer service. The idea is to offer a range of resorts and to package a vacation the way the customer wants it. We offer optimum pricing and have negotiated flat rates on unrestricted air fares which carry fewer penalties than most low fares.”
As much as one can tell at its inception, Vic-Vac has all that potential. For skiers, ski resort executives and travel agents, Victoria Vacations holds many benefits. For Mickey Smith, the enterprise is the fulfillment of a bunch of dreams: “It’s everything I wanted to do at Advance Reservations, but didn’t have the money for.”
