At Signature owners' event, CEO wonders if an economic winter is coming

Sep 06, 2024

Speaking at the Signature Travel Network's Owners Meeting in Montreal this week, CEO Alex Sharpe urged agencies to be more proactive. "I would not assume the business is going to continue to just walk in the way it has," he said. Photo Credit: Jamie Biesiada

MONTREAL -- A confluence of world events happening today has left Signature Travel Network president and CEO Alex Sharpe wondering, "Is winter coming?"

From the wars in Ukraine and Gaza to unusual weather patterns, volatile financial markets and even the mpox outbreak in central Africa, "It's easy to say yes," Sharpe said on stage this week during Signature's Owners' Meeting at Le Westin here.

Or, Sharpe joked, it could simply mean he's watching too much "House of the Dragon," the "Game of Thrones" prequel series.

"But big picture, it's still an incredible economy, an incredible business to be in," Sharpe said.

Overall, Signature members' booking patterns have been strong this year, he said, even compared with the record year that was 2023. (In an analogy, he called 2023 cruise sales Michael Jordan, "the greatest of all time," and 2024 "trying to measure up" but noted sales reflected members are doing that.)

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"I never know doom and gloom is coming," Sharpe said. "What I say is, if we're not prepared, then we're being silly. If we're not preparing for a downturn, if we're not preparing for what could happen, if you don't have a plan, you're not a good business owner."

Signature itself does have a plan in place, Sharpe said. At its most recent board retreat, recession planning was a hot topic, including ensuring enough cash is on hand to sustain throughout a potential downturn.

Sharpe encouraged agency owners to do the same and make a plan on how to respond to a decrease in sales. That includes focusing on the right suppliers, ensuring agents are trained to sell their products and ensuring an agency has the right workers who are being compensated properly.

Marketing is also an important piece of the equation, he said.

"I would not assume the business is going to continue to just walk in the way it has," Sharpe said. "So how do we get more proactive? And you have to have a plan to do that, including how you mine your database and how you collect data for your database. That is so critically important."

Bolster cash reserves, marketing

In an interview during the Owners' Meeting, Sharpe said every agency owner's business model differs, so how exactly they should prepare for a potential downturn is also different.

"But I think everyone has seen the value of cash reserves," he said.

Depending on their business model, he advised agencies to have three to six months of cash reserves on hand, more if they take a more conservative viewpoint.

Signature itself takes a more conservative approach with around 18 months cash reserves, Sharpe said, "but I think that's probably untenable for most small businesses. Thankfully, they [the board and members] just let us be more conservative on their behalf."

He also emphasized the need to be proactive in marketing. In the past few years, demand has been organic.

"There's a certain measure of -- laziness isn't the right word, but complacency, when business is good," he said.

Owners should concentrate on keeping the sales funnel full and also ensuring each sale is maximized. For instance, if a client is going on a cruise, ensure the agency is also booking their pre- and post-cruise hotel stays and also selling insurance.

"They have to maximize each booking, and they have to focus on how do we generate those leads," Sharpe said.

Year-over-year growth

Overall, Signature has recorded average revenue growth of 15% this year.

"Fifteen percent on a record travel year [in 2023] is incredible," Sharpe said.

Average growth by member was 9.8%, he said, which he called "pretty spectacular" compared to the surge in growth Signature, like many travel companies, saw last year.

At the meeting, 90% of Signature agency owners were present. Currently, Signature has 208 members.

Originally planned to be held at the Fairmont Queen Elizabeth in Montreal, last month Signature had to shift to Le Westin after a union strike at the Fairmont would have meant service disruptions there.

Sharpe gave kudos to Le Westin for handling the last-minute group.

"It's like we've planned it here all along," he said.