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My first great public relations disaster

Mon, 09/11/2017 - 09:03 -- Phil Egan

Regular readers of my column know that I spent 40 years in the Canadian travel business in Toronto.

My company was the third largest holiday company in Canada by the time my partners and I sold the company to Transat A.T. Inc., one of the world’s largest integrated travel companies, in 2000.

That year, we carried 250,000 passengers to holidays in the Caribbean, Mexico, and South America, and to Greece, Britain Ireland and other areas of Europe. Annual sales were over a quarter of a billion dollars.

We started in 1981, struggled for the first three years but grew steadily. We then experienced a phenomenal growth through the late 1980s and 1990s.

But in the early days, we made some mistakes.

One of my first colossal errors was born directly as a result of the fierce competition in the travel marketplace for charter seats to Britain, Ireland and Europe. Unlike the holidays that we sold which included hotels, ground transfers and meal packages, the “air only” charter seats were just that – air seats only, with no additional accoutrements.

With several operators offering similar flight packages, we were constantly seeking a competitive edge. Discounted airport parking was offered by almost everyone, at rates that were virtually identical.

Then, while pondering the issue one day, I came up with an idea that struck me as brilliant. In order to explain what happened, I’ve changed the names to protect the guilty.

During the summer of 1985, we were running a 60,000-seat flight program to Britain, Ireland and Europe. Wouldn’t it be a fantastic edge, I thought, to be able to offer my customers absolutely free airport parking? We would be the only supplier in the marketplace with such a sensational offer.

The newest airport parking company in the Pearson Airport area had only been open for a little over a year. We’ll call it Econo-Park. It was operated by a likeable character named Robbie McClusker.

I popped down to see Robbie with my pitch. “I’ll pay you one dollar for every passenger we carry overseas,” I told Robbie, “whether they use your parking facility or not.” In other words, we would pay Robbie’s Econo-Park $60,000 for the six-month transatlantic season. He would provide free airport parking for from one to four weeks for my company’s passengers who showed up to park their cars.

Neither one of us knew how many cars this might involve, for some passengers travelled together, some took taxis and limos, and some were dropped off by friends. In terms of quantity, Robbie would take the risk. He might have to park several thousand cars, or perhaps just a few hundred. In either event, he was assured of $60,000.

For my part, I was purchasing a tremendous marketing advantage at a cost of only one dollar per passenger.

We shook hands and had a deal.

The free parking offer immediately went into all of our advertising and took the market by storm. Bookings surged.

A couple of months into the program however, my customer service manager came to see me with concern on his face. “I’m getting letters,” he told me, “from passengers claiming that there were extra kilometres on their odometers when they picked up their cars at Econo-Park,” he told me.

“That’s not unusual,” I told him. Robbie is getting a lot of traffic. He’s likely having to keep repositioning vehicles around the lot.”

Within another few weeks, however, the problem became obvious as the number of complaints grew. Robbie McClusker was hedging his bet. Unsure as to whether or not he had made a good bargain with me, he had decided the situation called for some additional revenue.

Armed with people’s return dates from their transatlantic flights, Robbie had begun renting out their vehicles on the side. As used vehicles they couldn’t command new car rental rates, but hey – people are always looking for a bargain.

The police finally put an end to Robbie McClusker’s unscrupulous behaviour. Our free parking offer was withdrawn. Thousands of dollars were spent repairing customer trust with refunds, holiday discounts and other special offers.

It was a powerful lesson in trust and integrity, and the value of honest business partners.

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