Internet boosts local travel business

By Hubble Smith

June 20, 2000 Web posted at: 12:02 PM EDT (1602 GMT)

LAS VEGAS, Nevada (Las Vegas Review Journal) -- It's the offspring of Kathy and Leo Falkensammer who are taking Las Vegas-based Prestige Travel to the next level, into the Internet travel industry that's predicted to reach $29 billion in sales by 2003.

Kathy and Leo Falkensammer run Prestige Travel

While mom and pop keep the personal touch at Prestige's 23 "bricks-and-mortar" offices in Nevada, Leo Jr. and Ellen Falkensammer have balanced that with an Internet presence so essential to business today.

Prestige Travel, with its administrative offices at 6175 W. Spring Mountain Road, began www.tripreservations.com as an online travel site specializing in packages to Las Vegas and Orlando, Fla. It plans to add cruises in a couple of months.

"You have to be on the Internet," Kathy Falkensammer said before catching a National Airlines flight to New York for an industry association meeting. "It's incredible how many hits we get from Europe."

Like most of the e-commerce world, the online travel business is still in its embryonic stage.

Leo Falkensammer Jr., vice president of product development for Prestige, said he wants to move slowly with the Web site and find out what works.

Prestige progressed from eight months of static pages on the Web to booking trips online in October, starting with Las Vegas and Orlando, two easy destinations to sell. New York, San Diego and Los Angeles are coming next.

"Travel agencies historically have not made a lot of money," Leo Jr. said. "Now you've got all this technology, which costs a lot of money. I question how these large (Internet travel) companies can lose so much money."

While the $29 billion sales estimate is nearly four times 1999's volume, it's still only about 10 percent of all travel sold, according to a report from Bear Stearns & Co., a Wall Street investment firm.

"Even so, significant profits stand to be captured by those companies that prove most adept at harnessing and exploiting the new online medium," the report states.

Kathy Falkensammer, who bought Prestige Travel with her husband in 1981 and grew the company into Nevada's largest travel agency, said the relationship she's developed over the years with major cruise lines such as Carnival, Princess and Holland America will help boost profitability when they come on line.

She said Prestige gets favorable rates on pre-scheduled blocks of cabins for the cruises, much the same way hotels discount room rates for travel agencies that buy rooms in advance.

Basic travel packages include air fare and lodging, though Prestige can customize packages with adventure trips, honeymoons and shows in Las Vegas.

About five percent to ten percent of Prestige's online travel business is from international visitors, Kathy said.

"There's people in Europe who come here two to three times a year for one reason -- for Red Rock," she said. "They like to climb, they enjoy the weather, the blue sky."

Travel ranks as the No. 1 product consumers want to buy on the Internet, the Bear Stearns report said, and a fierce battle is shaping up between suppliers, such as airlines and hotels, and online travel agents to control the lion's share of the market.

"While the suppliers would ideally like to direct all electronic distribution to the channels they control, most seem to realize that a viable third-party online distribution network will remain an integral part of the way travel gets sold over the Internet," the report said.

One of the reasons frequently cited by travelers for not using an online travel agency is they enjoy the personal relationship they have with their agent.

"That's why the brick and mortar is still here," Kathy Falkensammer said.

"When you're selling a hotel room, it's different than buying a cruise," Leo Jr. added. "When you're buying a big-ticket item like that, you've got to give them customer service. People don't want to buy a cruise online without talking to somebody."

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