Racing the Clock

Find Good Partners
A well-thought-out partnership could be a smart way to weather this storm and develop new markets that will continue to pay off in better days. Amtrak has dozens of requests from hotels and travel agents for promotion and package trips, particularly in the Northeast corridor.

Coach USA, based in Houston, a billion-dollar-a-year charter-bus line that most consumers have never heard of, is trying to expand its business through cross promotions with online travel packagers Lowestfare.com and Expedia.com.

Resorts from Maine to Colorado are pulling back their far-flung ads to aim at drive-market customers, while Coach USA is beefing up its national advertising campaign. "This is totally new territory for the whole industry," says Lee Schissler, Coach USA's senior vice president for national marketing and sales.

Find Your Niche
Among the more fearless travelers are retirees who want to see the world before they die. Enter companies like Tauck World Discovery and Far&Wide Travel, which offer planned individual and package vacations for an upscale clientele.

Following the Sept. 11 attacks, 7,000 Far&Wide clients canceled upcoming trips. ceo Phil Bakes furloughed a third of F&W's employees and put its eight overseas offices on a reduced workweek. Since then, 80% of the cancellees have reupped. As of last week, new bookings had bounced back to 50% to 60% of normal.

Do It Online
Amid all the dotcom disasters, online booking services are proving to be excellent clearinghouses for tour operators and resorts. Expedia, Priceline and Travelocity all became profitable this year. Although their businesses have been hurt since the attacks, analysts point out that their low cost structure gives them long-term advantages. Expedia, currently 70% owned by Microsoft, just inked a partnership with online retail powerhouse Amazon.

It's the Customer, Stupid
While cutting costs, travel companies have to make sure that they deliver great service. And they have a special opportunity to do that during a period when the ratio of employees to customers is unusually high. An exception that proves the point: One of the few companies benefiting from the downturn is Amtrak, whose ridership has increased 15% since the attacks. But the rail service's chronic delays and often brusque employees are unlikely to bring many passengers back once good times return.