by Real Business - Thursday, 30th August 2007

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There aren't any short-term responses to catastrophe. But there are long-term ones.

My travel and travel insurance businesses experienced a stunning deceleration after the tragic events of September 11. Like others in the travel industry we were stopped in our tracks, without warning, by forces so far beyond our control that it makes the whole idea of conventional business planning and development a complete irrelevance.

Once the full horror of the human tragedy had sunk in, there was an immediate and catastrophic collapse in confidence by the travelling public throughout the whole world. If people weren't prepared to make business trips, how likely were they to want to holiday? It wasn't just the fear of terrorism; it was also a feeling that it didn't feel right to take a holiday so soon after the attacks on the World Trade Centre and the Pentagon.

Our phone lines began to overheat. By the middle of the month it seemed every call, every e-mail was another cancelled order. The stampede to abandon holidays and travel plans took us to the commercial cliff-edge within three weeks. Year-on-year travel sales were down 35 per cent in September; travel insurance sales halved.

The Japanese and Americans just stopped flying. Simple as that. That didn't affect us particularly because the majority of our clients are from Britain, but it resulted in huge over-capacity by the carriers and tour operators, which led immediately to massive consolidation and flight cancellations. That, in turn, meant our ability to do deals evaporated. Almost instantly, there was a 35 per cent reduction in capacity on the North Atlantic routes, which meant the promotional fares vanished. So much for people's dreams of cheap seats!

I know that damage to a business cannot compare to loss of life, but my partners and I had given so much of ourselves, our time and our effort to create and build a travel organisation which we genuinely believe to be unique in this country, that to see it brought to a standstill (temporarily, I'm convinced), through no cock-ups on our part, is indescribably frustrating.

We bought Travel Club International (now called TCI Direct) in 1994 when it was a small-time coach excursion company, but licensed and bonded with ABTA. We pioneered the creation of previously unidentified markets by targeting professional organisations and "closed user groups" such as early retirers. And because we are a tele-sales and e-mail operation without the overheads of high-street premises, we can give our clients a complete, personal service that doesn't cost the earth. More important, we're independent.

The recipe was good. Our turnover grew from £200,000 to £4m. Three years ago, we started the Travel Insurance Group. Our commission from holidays booked and travel insurance policies exceeded £1.3m last year.

The downside of targeting older people is that they are more cautious in times of uncertainty. Youngsters will continue to travel whatever world circumstances are. Our customers prefer to watch and wait.

So what now? Most sensible companies have contingency programmes for "normal" economic downturns, but how can you plan for the effects of a sudden war against terrorism? Ironically, I suppose we should be grateful for the economic downturn that preceded the terrorist attacks; that had already made us plan for the longer term.

There is, I believe, no short-term answer to unexpected business catastrophes - unless you count the value of taking time to steady one's nerves and draw a few deep breaths. In the last few weeks, we've already begun to put a big emphasis on UK and short-haul holidays and breaks. That sector has always accounted for some 20 per cent of business.

We're going to face the future with as much determination and innovation as ever. We have quite significant plans for the future, but they still revolve around travel-related products. We will undoubtedly diversify, but I can't say whether that would be our customer base or our total operations. We're going to launch new marketing strategies to complement the new developments.

The cancellations we can handle for a little while; it's the enquiries for future travel that will reveal whether customer confidence is picking up or not. Unfortunately, because of all the consolidation that's going on in the industry, it's going to take years for the travel trade to get back to where it was at the beginning of September. The ones who succeed will be the ones who can adapt, who can think differently from the herd, who can offer new products and services to customers with new attitudes and demands.

Colin Snook runs Essex-based Travel Clubs International. Tel 01277 314300.

If your business has faced some tough choices, e-mail Jenny Dickinson at jd1@caspianpublsihing.co.uk

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