Month: November 2007

Sometimes I feel like a parent with 60 teenage kids. Like yesterday, when the frantic prank email went out to our entire staff: “Ragen (from Tour Operations) puked in Rick’s office. Does anyone know how to clean up the carpet?”

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Each year the 16 managers at Europe Through the Back Door join me on an overnight retreat, and the remaining 60 employees have the building to themselves. It’s like when parents leave a high-schooler at home alone overnight — you just know something crazy’s got to happen. Judging from the mess we returned to, everyone’s grounded for a while at ETBD.

Our annual management team retreat is a critical part of running our business as each ETBD manager essentially runs a separate business (retail, tours, rail, books, etc.) under our big roof, and this is a time when we look ahead, fine-tune, compare notes, address employee concerns, and recalibrate. I am passionate about running an efficient show so we can be profitable, provide good employment, and be a fine value for our traveling customers. It’s all about design.

We dealt with many issues. For example, work space has been tight. We just rented a big, old house across the street that will be christened “Book Haus” and will haus eight of our guidebook editors. This will open up much-needed space in our main building.

We dealt with my philosophy of pay, perks, paid time off, bonuses, the advantages of being a privately held company, and the freedom to take time off without pay. For the second year in a row, the entire staff enjoyed a big bonus. With the fragility of the travel business environment lately, this seems smarter than higher wages.

The regular concern about more paid vacation was addressed. (I always say how great Europe is in this regard, yet give paid vacation on the stingy American business model.) I stressed how — as I have never had anyone pay me for not working, but always have had the opportunity to save up and then take time off without pay — I would like to give employees more money and assure them they can take off whatever time they like (if it doesn’t disrupt their department).

The big challenge (and new commitment) for us is to invest more in software to equip each department with whatever they need to be more productive (and therefore better paid) with less overall labor expense.

Another challenge is the rising euro and our dropping dollar. While our gross revenue has grown every year in the last decade, our net income has been down two times (in 2003 and this year), coinciding with big drops in the value of our dollar. There’s no telling how long this situation will last.

Each department head made a presentation. Our railpass business is down, but it’s not our fault. In the last decade, the people who produce and wholesale railpasses in Europe (Eurail and Rail Europe) have decided they’d rather sell passes directly to American travelers than pay travel agencies and companies like ours a commission to sell passes. Consequently, most railpass retailers are demoralized (shrinking commissions and so on). I believe we manage to sell more passes than any single business in the USA other than ER and RE — but we can read the writing on the wall.

The big rail news this year is not very big: Slovenia has its own railpass (whoopee!). My own travel style has evolved with the average American traveler. With shorter vacation times, cheaper airfare, and more travel experience resulting in more focused rather than multi-country trips, railpasses are no longer such a good fit. While in the past I generally bought one big, fat, wonderful railpass for my entire trip, these days I cobble together a few cheap inter-European flights, a few point-to-point rail tickets, and a little car rental (which I find is becoming a relatively better value than rail).

European Union regulations are having an impact on the tour business. For instance, there is a new, strictly enforced law (designed to keep bus drivers from being groggy at the wheel) requiring bus drivers to get 45 hours entirely off every seven days. This means each tour needs a two-day stretch without access to our bus. This affects our itineraries. We are also feeling a strong push from our tour members to offer single supplements so our single travelers can be assured a single room.

Our guides and staff are concerned that in order to sell more seats, we’re promoting our tours to more “high maintenance” travelers. I assured my staff that we are promoting our tours in a way that maintains our “no grumps” culture and that, regardless of the dropping dollar, we will not compromise on experience, nor will we fill our buses with complainers.

Our HR department reported that in the USA, 50 percent of all senior managers are expected to retire in the next five years. This will set off a scramble for brains in our economy. On top of this, younger employees around the country do not trust the system or workplace because of the lack of loyalty shown to them by management (driven by greedy demands of stockholders). To keep our great staff, we need to be innovative, maintain our fun work culture, and invest in tools so each employee can produce more and therefore make more.

Our business has never been stronger and our growth is steady. 2007 was our best year ever for tours, with 11,800 travelers filling 483 separate tours (my wife Anne and I were just two of these). In each successive year since 1998, we’ve lead more tours (110, 120, 154, 182, 208, 220, 261, 311, 420, 483) and sold seats to more tour members (2,600, 2,700, 3,600, 3,900, 4,700, 4,900, 6,300, 7,700, 10,200, 11,800).

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Rather than resort to paid advertising, we have a secret marketing weapon: using free travel information as our publicity stunt. In 2007, we hired an in-house publicist, which has been a huge boon for me. We’ll give talks at four travel shows in early 2008 (LA, NYC, San Francisco, and Seattle). The LA Times ran an editorial I wrote on drug policy (which was rerun in 10 other newspapers around the USA). I’m hosting a 30-minute documentary for the ACLU on American drug policy (next month). We were named Seattle’s top small business for philanthropy for 2007. And, regardless of my thoughts on why our country has military bases in 130 different countries around the world, we’re entertaining our troops by making our TV show available to the US Armed Forces Network.

I reviewed my upcoming initiatives (including a dozen new audio tours covering Venice, Florence, and Rome to be produced in December) and the gearing up to shoot and produce the last six episodes of our next 13-episode TV series that debuts next October on public television.

After wrapping up the retreat with a big thanks to my managers, we all drove back to Edmonds to clean up our offices.

I just got back from my annual “vision meeting” with Bill Newlin, my publisher. (He comes to Seattle or I go to San Francisco.) We critique and review the business we share — making sure the 30 books he’s published of mine are well-designed, efficiently updated, cleverly marketed, thoroughly distributed… and selling well.

There are certain natural conflicts between a publisher and a travel writer. For instance, thickness of paper is an issue. If a book has a fat spine, customers see it better on the bookshelf and it sells better. Of course, for a traveler, a thinner book is easier to pack. My fear is that a needlessly fat book will sit on the hotel bed while the traveler who needs it is out and about. Publishers choose the thickness of the paper based in part on these concerns. Thinner paper is a bit more expensive. When it gets too thin, “opaqueness” becomes an issue (you don’t want to see print from the other side). A few times we’ve received needless fat phrasebooks (whose portability is particularly important) and I am on the phone pronto with Bill.

Another natural stress point is price point. I believe that book buyers are “price sensitive” and we’ll actually make more money by keeping our prices down. Bill is pressured by bookstores to keep the price up so everyone on the nibble chain of the book business (which is tough for all involved these days) gets a little more to eat. (A book store hardly wants to deal with an $8.95 book because their cut is so small. But the same percentage mark-up on a $14.95 book earns a profit substantial enough to generate some sales enthusiasm.)

We go back and forth on book covers. I once wanted Michelangelo’s David on the cover of my Europe 101: History and Art for the Traveler book — full frontal nudity. My publisher said with his marble penis right there for all to see the book will lay face down (if at all) on coffee tables all over the less-erogenous, conservative zones of our country. He proposed a fig leaf. I cringed. Then I proposed a peel-off fig leaf so each book buyer would have options. My publisher said that, at a dime each, it was too expensive. I proposed we split the cost. He agreed and I wrote a $500 check for my half of 10,000 peel-off fig leafs. That’s my kind of publisher.

Any publisher wants more titles from someone whose books sell well.

Bill reads sales reports for all the travel books in print like others read a steamy romance novel. When it comes to wisdom on what will sell, I trust Bill. (He knew perfectly well, for instance, that when I split my single Spain & Portugalguidebook into two separate books, both the new Spain and the new Portugal books would sell better than the original combo title.)

Each year Bill pushes for more titles. This is when I feel like a hamster in a wheel. Each book is a lot of work. Thankfully, our phrasebooks, art books, maps, and DVDs don’t need regular updates. But the annuals (city and country guidebooks…about twenty of the thirty) need to be researched and redone every year.

Back in the late 1980s, my publisher put his arm around my shoulder as we walked from our hotel to the American Booksellers’ Association convention in San Francisco and said, “Rick, you’ve got four titles. If you want to be noticed and taken seriously in the book business you need more titles.” Twenty years later, with about eight times the titles, he has been proven right.

Bill wants new books for 2009. He proposes expanding our line of phrasebooks (to Dutch, Polish, Greek, and Russian). I remind him that our phrasebooks are more than phrasebooks…they need to mix travel savvy into each edition. I am committed to this element (and tell him we know nothing of travel in Russia and that’s one title I’d rather not do). Bill’s cool. (I think he asks for more than he really expects.)

Bill (and everyone else I work with) pushes each year for a Greece book (which I’ve resisted for a decade). Finally, fresh off my wonderful Greek vacation with Anne and with the assurance of expert research and writing help from my staff, I have (tentatively) agreed to do a more focused Athens with Side-Tripsbook. (I have already written a fine Athens chapter from an aborted earlier stab at a Greece guidebook — which lives on our website — and I’m really excited about Nafplion and the island of Hydra as side-trips.)

We agreed to do a Budapest with Hungarian Side-Tripsbook for 2009. Budapest is challenging Prague as an Eastern European favorite and my ace co-author, Cameron Hewitt, is enthusiastic and ready to make this book a winner.

Bill reminds me that our Germany & Austriabook is now pretty fat (with 650 pages) and needs to be broken apart. I agree but don’t want to write an Austria book because I don’t like much of Austria (or at least don’t want to be an expert on Graz and Klagenfurt). We agree that the new book should be Vienna (which I absolutely love) with Salzburg and Danube side-trips. We also agree that Salzburg should also remain in the Germany book as so many consider it a side-trip from Munich.

I also tell Bill I’ve been enjoying giving travel talks with a political edge all over the country lately and that I’d like to write a book with the working title Travel as a Political Act. We both know that the Gore Vidal’s political essay books (which Avalon also publishes) have topped the New York Times bestseller list. And Bill figures that 2009 (after a new president) will be considered a new beginning — and the market will have a renewed appetite for political books.

Future titles we’re both interested in but will let simmer on the back burner include: an Italy version of our new Europe 101 book; Poland — which is virtually written and hiding within our Eastern Europe guidebook; an update of my Postcards from Europe book (incorporating my blog material from the last two years); a coffee-table book of gorgeous Europe photos with quirky insights and travel skills lessons tied to each; and a book designed for cruise passengers to travel independently from their cruise ships at the various ports of call.

Each year Avalon pushes to up the production values of our guidebooks. While I absolutely love our hand-crafted Dave Hoerlein maps (Dave has been our in-house cartographer — along with much more — for twenty years), they are morphing into computer-generated maps. They will retain their intimate connection (which only Dave can create) with the text and needs of the traveler while becoming more detailed and to scale.

Bill is determined to keep up with the trend in guidebooks to kick each edition off with an introduction of 15 or 20 pages supported by full color photos. That will be a great opportunity to get our readers primed for the best visit.

Bill is a visionary. He’s out there in loony field and then suddenly loony field is the front yard. Lately he’s nagging me to code all our listing for GPS (global positioning) as the digital revolution will soon merge navigation devices and electronic books (and usher in the end of the paper book era).

And speaking of electronic books, we have created an electronic proto-type (a combo-guidebook to London and Paris available only as a digital download over the internet) as an experiment with Amazon. (And just this week Amazon has unveiled its Kindle. I held it at Amazon headquarters six months ago and was sworn to secrecy. Keeping the secret almost gave me a hernia. Now I can blurt out all my thoughts…in my next entry.)

I love my publisher. Since I joined it in 1984 it’s morphed from John Muir (the hippy publisher, one of America’s first small independent publishers famous for the classic How to Keep Your Volkswagen Alive and Carl Franz’s People’s Guide to Mexico(Carl and John smoked a lot of weed back in the 60s) to a more serious John Muir. It was ultimately purchased by Avalon (as publishers need a critical mass to survive these days) which essentially merged my guidebooks and the Moon guidebook series. A couple years ago (in keeping with the get-big-or-die trend in American business in general) Avalon was purchased by Perseus Publishing.

The president of Perseus (a good traveler and fan of my guidebooks — whew!!!) is committed to letting Avalon and I stay true to our mission of being the best travel guides in the business, with a passion for our readers needs, even if that means occasionally trumping conventional publishing wisdom.

Since 1984 I’ve never had an agent and never flirted with another publisher. My talented staff and I research and write the guidebooks. Then Bill and his gang at Avalon publish them, promote them to the book business, and get them into the bookstores. (Getting books well-positioned at Barnes & Noble or scoring a special “Rick Steves” store at Amazon.com doesn’t just happen.)

And once the books are researched, written, published, and distributed…well, that’s where you come in. Thanks and happy travels.