For Helen Logas, principal of corporate travel group Travelcorp, the looming recession is just the latest in a long line a problems for the travel industry.
The 11 September 2001 terrorist attacks in the US, the collapse of Ansett, and the SARS epidemic in south-east Asia all brought the travel industry in their time to a screeching halt.
But Logas has one simple message for downturn-struck entrepreneurs – don’t fire your staff.
“During SARS was the first time that I really felt people stopped travelling, and I honestly felt it would be the end of my business. But we didn’t retrench anybody and worked as a team,” she says.
“A lot of people in travel were retrenched and went to other industries. When conditions improved there was a lack of good staff everywhere, and it made it worse for our industry.”
Instead, Logas says she allowed staff with lower workloads to work on improving the business by fixing up internal processes.
“We went and reviewed how to do things better, did a lot of internal cleaning and made sure we were ready for when it came back. When it did, we hadn’t retrenched anyone and conditions improved in a big way.”
The current downturn is no different, she says.
“I’ve put on business development staff. I’m now of the belief that we need to put into place what we need to get us past the next six-to-eight months, which is how long I think this will last. When conditions improve we need to be ready to deal with it.”
The company posted revenue of about $50 million during 2007-08. Logas says the company expects to reach $85 million during 2008-09.
“It’s quieter right now. There’s no doubt about it and we’re not at the levels we should be for this time of year. One of the first things people cut out is travel, as it’s a large expense and could be deemed as being unnecessary.”
“But because I have had these types of experiences, it’s not as bad to me. If I was in business and had not been through that, I’d be asking what the hell is going on. But I have learnt that how you get through it is recognise the fact that this is a downturn; think about things internally and bring in more business.”
The company started in 1994 after Logas abandoned her job teaching in a high school.
“Travel was my dream profession, and I decided to make my dream come true. And after some good grounding and solid training I decided to open my own company.
“I believe one of my greatest strengths is negotiation, and I had good negotiation skills, even if I didn’t have the business strength to back me up at that time. When I put those negotiated air fares in the marketplace we’d get a great response.”
But it wasn’t long before Logas learnt a big lesson about the ups and downs of the travel sector when the industry was hit with a double blow in 2001. Just days after terrorists destroyed the World Trade Center in Manhattan, Ansett collapsed and wiped out thousands of jobs in the process.
But Logas says the chaos was a blessing in disguise.
“We actually grew from that, because Ansett had a division which would manage a lot of corporate clients. We were able to get a lot of those clients, and really started to build business from it and turned that into an opportunity.”
In times like these, she says, businesses need to expect more from their staff and ensure a vast knowledge of their industry to help capture opportunities.
“All of my staff came in at 6am and rebooked all of our clients. Because we knew our industry and who looked after what clients, we went out there, targeted those clients and won some of them. We definitely grew from that.”
The troubles didn’t stop there. After managing to survive the horrible conditions early in the decade, the company’s second-in-command walked away taking a huge chunk of the business with him.
“That was probably one of the biggest things I’ve had to suffer. He came in and said, ‘I’m leaving’ and I told him to stop joking. He said he was serious and walked out with literally over a third of the business,” Logas says.
“I could have gone legal, or a lot of other things, but chose not to, which was a very hard decision. I was emotionally quite upset and took a toll on me and clouded my business sense.”
Logas says that not only did the company suffer, but her business sense was clouded by such a shocking emotional setback. Eventually Travelcorp hired a business development manager to help the company recover.
“We perused an aggressive strategy to gain large clients such as Coca-Cola, and eventually recovered in a big way.”
Logas says Travelcorp survived the difficulties of the early 2000s by pursuing an aggressive business strategy, and if other businesses want to survive now they must do the same.
“Had I known what I know now, I wouldn’t have put myself through the heartache and worry. Instead of being as cautious as I was, I could have put on more sales staff to grow quicker. But the fear factor makes you pull everything in tight and stop spending any money, because you’re not sure of what’s going to happen,” she says.
“Don’t decrease your fees and keep your yield up. Profit will go down, but if you grow and manage the business then profit will come back even better.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
