When Peter Sontag travels, he often hits the road on his Harley-Davidson motorcycle. But customers of his company, USTravel, the third-largest travel agency in the U.S., usually ride in higher style-the pampered beneficiaries of Sontag’s customized approach to travel.
Want pizza for an in-flight meal? Need an immediate visa for a last-minute trip to China? No problem. A USTravel customer can call an emergency number from anywhere at any time, and the sole job of 50 USTravel employees-the company’s elite guard-is to make sure the agency’s 7,000 accounts remain happy.
“I’d like to create the perfect service delivery system,” explains Sontag, 50, who co-founded USTravel in 1986 and serves as chairman and CEO. “I enable you to do business elsewhere in person. The objective is for you to be able to do it flawlessly.” Notes Laura West, the manager of a USTravel office in New York, “We are trained to exhaust all possibilities.”
Times are tough in the travel industry. Commercial airlines, for example, have lost $10 billion since 1990-more than they made since the beginning of commercial flight. The Gulf War and sporadic terrorism have kept Americans close to home, and the recession has encouraged executives to curtail travel. Moreover, videoconferencing is on the rise: Some analysts estimate it could replace up to 25 percent of corporate travel within the decade.
Fighting such currents, Sontag has made considerable progress. USTravel, a subsidiary of San Diego-based PS Group, has 2,300 agents at more than 900 offices in the U.S. and overseas. Between 1986 and 1992, the company’s sales soared nearly tenfold to $2.3 billion from $265 million. The only larger U.S. travel companies are American Express, with 1992 sales of $6.9 billion, and Carlson Travel Group, with $3.4 billion in sales.
Sontag says he would consider pairing with smaller competitors or even with American Express or Carlson. That’s practical thinking, not just contingency planning: Consolidation in the industry has been brisk, and many U.S. companies are forming alliances with companies overseas. As a result, the big are getting bigger: Ten years ago, the top 10 U.S. travel agencies accounted for just 5 percent of the industry’s sales. Ten years from now, Sontag reckons, the 10 leaders could control half of the market.
With increased size comes tremendous clout: USTravel now issues 12,000 airplane tickets every day, and Sontag boasts that the airlines do “virtually anything we ask them to.” For a traveler, this can mean a free upgrade or money back on a non-refundable ticket. For Sontag, each ticket is another 10 percent commission from the airline.
Sontag is part new-age executive, part old-fashioned marketer. He believes in
motivating and empowering employees, and he leads by example. Each weekday, no matter where he is, Sontag sends a computer message to his entire work force. Dubbed “Petergrams,” these brief missives generally involve inspiration, praise for an employee, company news, or a personal anecdote. A recent Petergram discussed creativity and innovation: “Ideas are useless unless they are used.” Another praised a USTravel agent who drove a client to the airport to catch a flight.
“It’s important that everybody is on board and understands what we’re trying to accomplish,” the CEO says.
Sontag spent 186 nights on the road last year, but he’s happy to hop off the global treadmill. His perfect vacation spot? Steubenville, OH, a small town near the West Virginia border. As a teenager in his native Vienna, Sontag gave a visiting American businessman a tour of the city. The grateful traveler, a plumbing supply salesman from Steubenville, invited 17-year-old Sontag to live with his family. Sontag made the move in 1960, graduated high school, and paid for college by working summers in a West Virginia steel mill. He owns a house in Steubenville and likes to shoot pool with his old mill pals.
If Sontag realizes a dream of becoming a U.S. ambassador, rest assured the embassy will be one of the most colorful spots in town.