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?”
 |
|
Enlarge photo |
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).
 |
|
Enlarge photo |
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.
Rick What were your staff doing to make such a mess? And Ragen puked in your office? Oh well, I ‘m sure it was mainly some office high jinks…. I found your comments on rail passes very interesting. I was looking at my itinery for my next trip and by stitching some flights together I can really get around and may not need a railpass but use other options within countries. In ten trips it would be my first with no railpass. Too expensive now and my last trip I used some low cost flights (I did have a railpass too) and it was a huge success for my trip.
It’s exciting to be named one of the top small business in Seattle for 2007. Keep up the great work. Season’s Greetings!
Thanks very much for the great insights into the travel business today, and the details about how you run your company.
Wow! Thanks for sharing all the inside information. Having been a part of building a start up company for ten years with all the challenges and rewards (esp staff comraderie)and now after the sale of the company to a large corporation, I am experiencing vicariously through your blog…the fun of a small company again. Enjoy it and please don’t ever sell out!!
I remember one year as my boss was leaving for vacation, several people had gathered to wish him a nice trip.
I said, “We sure hope you enjoy your vacation as much as we will!”
He almost didn’t go.
No matter what you or I think about our country’s present military policy, your programs on AFN and your guidebooks help create the kind of travelers we want our military members to be in other countries. I speak from experience, as the wife of a retired soldier and the mother of three raised partly in Europe. We do want Europeans and others to view Americans as intelligent, thoughtful travelers! Thank you for sharing your shows with overseas military through AFN!
Rick, thanks for airing your shows on AFN. There are thousands of young soldiers who have rarely traveled outside their home states, much less countries, and are terrified of being sent to an “exotic” location like Germany. Your television shows are a great tool for helping them discover the Europe awaiting them outside the fences of their bases.
My husband and I made our first trip to Europe this past summer, and used your “Best of” book almost exclusively to plan it. We drove from our home in Moscow, ID to attend your travel festival last March, and we also purchased railpasses from your staff. I have to say, one of the highlights of those 23 days was rail travel. The only word I can think of to describe it (of course ignoring all the hot, crowded cars and Italian delays) is “magical”. I’ll never forget watching the Italian countryside merge into Switzerland, or seeing the bright blue Ligurian Sea flash past us between tunnels, or feeling the air on my face as castles flashed past along the Rhine. I hope this particular method of seeing the continent doesn’t die out…it’s just too special.
Vacation time is an interesting subject. Having been an employee and a business owner. I think the best system is accrual of vacation time. Rick is right about someone going out of town and wreaking havoc during a busy business cycle. I say be smart with your time off and please don’t hesitate to take time off without pay. Someone correct me but in Europe aren’t the positions with mandated vacation time NOT in the private sector? AKA..Government Positions. Just my Take, Fred in Atlanta
I’ve sent ETBD a question/comment already regarding the single supplement and received a courteous reply. I do not take tours and did not take your tour to Rome because of either having to pay the single supplement or room with a stranger. I am an introvert and need alone time to survive. I also know there are lots of us. On the other side of the coin, I don’t want to impose myself on another person who doesn’t know me and, surprisingly to me, once in a while there is a person who just doesn’t like me. What a way to wreck a trip. I also know that there are lots of single travelers. I always travel by Rick’s methods and wouldn’t have it any other way, but I think he could lead the way to handling the single traveler more fairly and priced reasonably (including a clear explanation of what makes up the cost of the single supplement). I want to understand why I am paying a “premium” for anything. Thanks and happy travels.
As you mentioned ETBD is a private company so its none of our business but you said you took some hits on the falling dollar vs the Euro. So if you company’s revenue is in dollars ( books, tours and other stuff) yet most of your expenses ( less salary for your US based folks and marketing expenses ) are EURO based then why not hedge? Get long some euro calls or forwards and take out any risk ? Sure its added expense but so is life insurance…and believe me the dollar is not turning higher any time soon not with FOMC hinting at 1/4 pt cut on the 11th ps love the books my wife and I have been using them since our first trip to Europe back in 1996 and recommend them to everyone we know traveling
Rick your business practices are interesting. I am also self employed and have never been paid for a vacation. But I also get the lyons share of the profits. I think it is really important for people who work for you to feel really good about taking time off from work to renew themselves to be a better employee. I am sure even in the travel business everyone need a break even if they just stay home! Judy
Fred – I can not say about other European countries for sure but where I come from – Finland – everyone gets 5-6 weeks off paid/year. One week in the winter time and the rest in the summer time. It is not just for the public servants. Also many private companies give out extra money for returning vacationers. Quality of life is guaranteed that way for everyone, not just for the rich. People value their vacations there and everyone travels abroad. Practically everyone has a passport. Rick – love your shows and enjoy your blogs.
There were thousands and thousands of GI’s who were given the opportunity to serve in Europe and being one has given me the insight to other lands. My wife and I have been to Europe using your book and our experiences to enjoy once again the people and countries we fall in love with in our youth. Cannont wait for DEC 15 and the new Germany Austria book arrives.
I’m disappointed that someone who owns a business about traveling in Europe,known for lenient vacation mentality, is not promoting a European benefit. I might have made more money elsewhere, but stayed with one company due to the 5 weeks of vacation I accrued. I urge you to reconsider this issue, which would reflect the combination of Europe and vacation – the intent of your business.
Rick, How the hell do you leave you company for 60 days at a crack (I presume you don’t check in with the office, do email for hours a night, etc)? For this reason alone, I salute you and have always been impressed that your business seems to ‘run itself’ when you head over the Europe for such long stretches! It seems like you have someone you trust immensely running the shop back in Seattle while you are filming and researching, perhaps your wife, father, business partner, level 5 leader, etc? I have always wondered about this and had hoped you’d address this lingering question in this post.
Salve Rick, Interesting insight to you business and certainly the “numbers” are an indicator or success. Congratulations! I did want to comment on the “paid vacation” issue that arrises. I don’t think you are being inconsistent at all with the praise you give for the european approach and the approach that you take with your company. Both approaches place a high value on taking time off and travel. The european approach manifests itself as more a “paid vacation entitlement” program, where yours comes from the and “unpaid vacation encouragement program” … To quote part of the philosophy of a famous author “affording travel is a matter of priorities. (Make due with the old car.) … ” My wife and I adopted your travel philosophy 10 years ago of travel as a matter of priorities and have economically traveled to italy by single rucksack, by train, by bus, by walking and have met wonderful people traveling “close to the ground”. So my advice to you is don’t get fooled by the difference in tactics (paid versus unpaid vacation), celebrate the consistency of the theme, that while creating economic value is necessary for us all, the time away from the “job” and travel are an important elements of leading a balanced,fulfulling life and being a more thoughtful, responsible citizen of the world. … which again, comes down to priorities, not whether the time off is paid or not … Congratulations on your “unpaid vacation encouragement program” which I think think is the envy of many who are working in more traditionally oriented companies. buon natale Marty
Praising the European model of vacations and then not adopting it is just hypocritical. Rick, practice what you preach! Do you believe it, or is it just sales talk?
Rick, every year I earn more money and I am more tempted to splurge on travel perks like the “single supplement”. But I remember well that when I was young and broke, you were the only company that I could travel with that didn’t charge a singles supplement, which can sometimes double the cost of a tour. I could never have taken a tour at all if it weren’t for your room sharing policy! And although I sometimes travel alone and love it, my roommates have been a great part of my tour memories. Great company and kindred spirits.
Rick I just wanted to know what is it like working at ETBD travel center Whats the Routine?.
well Rick I feel like I have been sold a bill of goods by you and you are not the person you profess to be. In you videos you sell yourself as a kind, good hearted nerdy guy next door when in reality you pad your pockets while your life blood, employees, are shafted out of benefits. You say you make millions and are making more and more every year, yet you begrudge your employees a stinkin’ vacation. The reason everyone likes you is because of how you market yourself but the marketed Rick is not the real Rick and we only see the real Rick through these blogs and it is not a pretty picture,
I salute you and have always been impressed that your business seems to ‘run itself’ when you head over the Europe for such long stretches! It seems like you have someone you trust immensely running the shop back in Seattle while you are filming and researching. http://www.energytalkradio.com