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Why VacationsToGo sells more cruises than Expedia; CEO explains how

Feb 18, 2013 5:24 am

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VacationsToGo.com has a huge online presence, but you can’t book any of its cruises online. You’ll have to phone one of its cruise specialists to do so, and CEO Alan Fox says that’s one of its secrets.

— Dennis Schaal

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Woody Hibbard  / flickr.com

Royal Caribbean sister ships in Cozumel, Mexico, in 2011. Woody Hibbard / flickr.com


Identifying an entrepreneurial niche — providing a one-stop planning site for budget travelers — and staying fresh with innovations enables Winston-Salem native Alan Fox to run one of the largest online U.S. travel agencies — Vacations To Go.

Fox earned his bachelor’s and master’s of business administration degrees from Wake Forest University, graduating from the Babcock Graduate School of Management in 1981.

After a stint working in the airline industry, Fox and the former president of Texas International Airlines, Robert Carney, formed Vacations To Go in May 1984.

Their strategy was convincing airlines, hotels, tour operators and cruise lines that they were better off slashing their rates at the last minute than letting unsold inventory go empty. The businessmen connected the travel industry with flexible vacationers who could leave on a moment’s notice with deeply discounted international travel opportunities.

Initial success led the businessmen to launch the magazines Vacations in 1987 (300,000 circulation), Travel 50 & Beyond in 1990 (115,000 circulation) and Where to Retire in 1992 (200,000 circulation).

Their business got another surge in 1999 when it launched www.VacationsToGo.com. Recently, it began offering early-bird discounts to people who want to book vacations in advance.

Fox said the company sells more ocean-going cruises and more river cruises than any other travel agency in the world, and its five weekly travel newsletters are emailed to more than 17 million subscribers worldwide. It has 700 employees serving customers from more than 50 countries. In 2012, about 750,000 people purchased international vacations from Vacations To Go.

Fox’s wife of 29 years, Karen, runs the company’s publishing unit, overseeing development of three magazines and several travel- and retirement-related book titles. Their son, Christopher, is a 2012 graduate of Wake Forest and works in the marketing department.

Despite his busy schedule, Fox remains engaged with his alma mater, serving on the Deacon Club’s board of directors and being recently named to the athletic department’s campaign executive committee.

Fox took time recently to talk about his business and his Winston-Salem roots. An edited version follows.

Q. What convinced you that this marketing and publishing concept would prove popular with tourists?

A. When I first got together with Bob Carney, all we knew was that we wanted to do something travel-related and something unique. I ran across a charter airline flying to Europe from New York that would sometimes mark down a few remaining seats on its flights at the last minute.

That made me wonder how many other travel companies might consider such markdowns if they had a way to cheaply market the distressed inventory without diluting their full-fare business.

I went on the road to try to convince airlines, tour operators, hotels and cruise lines to give us deep discounts at the last minute. It took a few months to line up enough deals to run an ad in the Houston newspapers and open for business. That was the beginning of our travel agency.

Three years later, Bob and I were having a discussion about how pretentious the travel magazines of that day were, how they all seemed to fight over the top 10 percent of the audience and ignore the other 90 percent. We decided to publish a magazine of vacation ideas for people who wanted a good deal. We launched Vacations magazine in 1987.

We launched Travel 50 & Beyond and Where to Retire so we would have two magazines in place to ride that demographic wave when it came.

Q. How is your group able to grow its niche given all the Internet competition and last-minute marketing offers?

A. We are significantly larger than Expedia, Travelocity or Priceline in three of the four areas where we compete against them — oceangoing cruises, river cruises and escorted tours — and we are still growing.

They are all much larger than Vacations To Go in the fourth area where we go head-to-head ´┐Żair/hotel packages. They also sell products we don’t offer at all, such as domestic U.S. airline tickets, car rentals and business hotels.

When travel agencies started moving online, there was this idea going around — that we never bought into — that all travel would soon be booked without human interaction. We agreed that would happen with simple airline tickets or car rentals, but not with complex, all-inclusive international vacations.

We invested in hiring and training the best professional sales people we could find and paying them the best wages in the travel agency industry. We are now known throughout the travel industry for our customer service, and that’s given us a big advantage in repeat business and referrals.

Q. How are you able to persuade the hospitality groups to keep their discounts coming through your publications and website instead of the competition?

A. We negotiate many, many deals that are exclusive to our customers and others that are not exclusive but end up going only to our customers anyway because we sell every seat or room or cabin available with our newsletter blasts.

Q. What did you expect when you went after the early-bird market, and have sales and interest exceeded your expectations?

A. The first few years we were on the Internet, we doubled or tripled in size every year. We could not hire qualified people fast enough to answer all the phone calls.

When our growth began to moderate, we decided to go after early bookers, as well. We knew we would retain the last-minute capability but worried about the impact of mixing our message to consumers.

Still, there are a lot of people out there that must plan their vacation many months in advance, and we knew our model had to evolve if we were ever going to be able to serve these folks.

As it turned out, our concerns were overblown. We were able to transition to being known for travel discounts of all types, with a last-minute specialty. We’ve grown throughout the economic malaise of the last five years, though more modestly than before.

Q. What about growing up in Winston-Salem and getting your bachelor and MBA from Wake Forest prepared you for your career?

A. During my undergraduate years at Wake Forest, I decided that I wanted to start my own company some day. I took out a loan to get my MBA and spent two years trying to learn what it took to run a business and how to tell a good business idea from a bad one.

My Wake Forest MBA got me in the door to interview at Texas International Airlines and gave me the confidence to take the plunge when opportunity came knocking two years later.

My first year at Wake was for kindergarten, and I still have my framed diploma. My mother worked there for 20 years in the bookstore and the Deacon Club, and a lot of my childhood friends lived on Faculty Drive.

I moved to Texas immediately after graduation and gradually lost touch with the school. It was a great day when my son, Christopher, surprised me with his decision to go to Wake Forest instead of following all his buddies to big Texas schools. He graduated from Wake last May, but while he was there I was able to reconnect with the school and old friends who had stayed in North Carolina after graduation. The school and the people have become a big part of my life again.

Q. What’s left to accomplish in your career and personally?

A. My love of travel got me into this business, and there are still a lot of remote and exotic destinations and cultures that I would like to experience. Every place like that becomes a part of you and changes you.

Professionally, I have plenty of room for improvement. I’m continuously looking for ways to make our company better at serving our customers and a better place to work for our employees.

And I’m always trying to anticipate the next big change that is coming that will knock out companies that don’t adapt quickly enough.

(c)2013 Winston-Salem Journal (Winston Salem, N.C.). Distributed by MCT Information Services

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