Seattle Times article re: To stay afloat, RS to cut hours

Wow. Such difficult decisions to have to take.

Due to coronavirus, Rick Steves announces scale back of employees' hours to keep staff employed for up to two years

https://www.seattletimes.com/life/travel/due-to-coronavirus-rick-steves-announces-scale-back-of-employees-hours-to-keep-staff-employed-for-up-to-two-years/

The other take away from this article is that worst case scenario is no revenue for two years.

Sounds prudent and rational, while trying to preserve jobs and health benefits for in-house staff. It may be a lot harder to flip back the switch with contracted local guides, related vendors (charter buses, etc) and lodging networks overseas, since no one knows where they will be in 2 years...you may have re-build relationships and networks from scratch. If I was in the business right now and not heavily invested in it yet career-wise, I would seriously consider switching careers unless I was ready to ride out a few years of real economic pain.

Steves said in a statement. “But as the global situation becomes increasingly dire, it’s becoming clear that we may need to fund our company for two years or longer with no revenue. This is not possible without cutting our payroll dramatically.”

It’s no secret that Rick’s tours skews to an older audience and that’s likely to be the group last to return to international travel. Especially if you’re a retiree without a time schedule, it’s easy to say let’s do a USA tour for 2021 and then maybe Europe 2022.

And, yes his tour guides will be especially hurt. He doesn’t just hire college kids or anyone off the street and give them a script. I’m afraid a lot of them that gave up their boring office jobs may be forced back into those boring offices to eat and take care of their families.

I also have a feeling that a lot of his preferred lodgings won’t make it and even those with a cash cushion may decide to throw in the towel. The proprietor may have used the business as a reason to get up in the morning and enjoyed meeting the people. But, lingering thoughts of retirement might hit them at the end of every tourist season and it might just be the extra kick to sell the property. And, quite frankly, a lot of the independent places won’t have the cash to get through an empty tourist season. Pedro’s Pension isn’t out booking conventions for 2021 and 2022 to get some cash flow.

While large public speaking opportunities won’t be happening any time soon, I did come up with an idea which may help. They could offer very niche virtual tours online for a fee. Rick’s talks are usually broad based and general info and thus make renting a ballroom worth it as it’ll draw a large crowd of curiosity seekers. Online, he and his staff could offer tours for the more advanced traveler who doesn’t need to know about passports or the Euro. Online niche tours wouldn’t need to draw enough people to make renting a hotel ballroom worth it. But, getting 25-50 people or more for an hour talk and tour of just one European city or famous museum would be feasible.

And, another source of income for Rick might be to write more books that aren’t guidebooks per se. Even a semi autobiography would be interesting. Take us from the starving student travelers cheque days with multiple currencies up to modern treble with ubiquitous budget airlines. How about some remembrance of the Cold War era? Or days where you could hop any train, flash the Eurorail pass and be off.

I feel sad because of this announcement. But I am sure RS and company looked at every option available to them and this is the only option that makes sense to them at this time.

Once the remaining tour cancellations occur and the final refunds are paid, there really will be no need for the full office staff to remain at work full time. While the staff always seemed like family and have all been exceptional people to deal with, Rick only has so much cash in the bank.

With these statements from Rick that he is not expecting the storm to be over for up to 2 years, I seriously doubt there will even be any tours offered for 2011 (at least not the early part of the year). I know several here were hoping otherwise, but reality sucks sometimes. I just hope there is a RS company at the other end of this so we can once again enjoy his form of touring that we all like so much when it is safe to do so.

Agnes,
I agree if this were a new business, instead of 30+ years, it would fold under this pressure.

Slick warp,
I purchased some guidebooks just the other day so I could continue planning future travels and contribute a little bit to his business. I think his guidebook revenue is a huge revenue stream but he mentioned somewhere that sales were down 90%. His guidebooks series is a top seller in the publishing world.
I’m doubtful my RS tour in September will run.

Mark,
I so hope RS will be around, I’m an enthusiastic tour traveler. He’s an entrepreneur with a calling for this specific style of travel and has built his business by unconventional means, public TV shows, guidebooks based on backdoor places and Mom and Pop hotels,etc. An American success story. He has always owned his company, never sold out to a big corporation which could have made him super rich.

All around for RS and others in the travel world, it’s devastating.

Dale,
While his travelers do tend to be older I think they may jump on board quicker because they feel the pressure of being older and know time may be limited for travel while they are healthy.

I think people purchase guidebooks when they have a tour planned. So, to sell more guidebooks, he needs tours.

The RS guidebooks do a better job than any others I've seen of explaining the "how" of independent touring. They're much more useful to those planning their own trips, especially first-timers to a country, than to those taking guided tours. So they should continue to sell as well as, or better than, their competitors, though I'm sure all guidebook sales will be depressed for months or years to come.

Too bad these staff-hour reductions are needed. While I've had very little interaction with RS staff (two tours and several visits to the Edmonds office), everyone I've dealt with has been helpful, friendly, and professional. It seems like a great organization. Let's hope it survives and the employees find ways to get through this awful time.

Paul,
I used RS guidebooks for 15 years for independent travel before I even knew he offered tours or TV shows! They are useful for planning your free time on a RS tour but also independent travels.

I am another one who is highly unlikely to ever take a Rick Steves company tour, but who often buys their guidebooks, whether paper or electronic form. They just take such care and are so smart in how they present their information, they are a great value for the self-planning traveler.

I don't personally think there will be two years without international tourism, at least on Europe's side of travel restrictions. There will be a massive opening of intra-European travel in June. Of course, it is not a back-to-normal situation, but it is something. Italy itself is reopening most of its attractions on June 3rd.

Incidentally, one of the worst-hit European tourist niches will be the summer festival circuit. While not catering for the typical RS tour demographic, they are important for the whole ecosystem of lesser-known and smaller music acts in this era where touring, not sale of music, provides most of the revenue for non-internationally-large acts.

For obvious reasons, even with the reopening of other parts of tourism trade in Europe, with some restrictions for distancing, music festivals have been almost entirely canceled this year, and the nature of the business make it tricky for the different government eligibility programs.

Hostels are also severely affected, due to the impossibility of operating shared rooms, shared bathrooms, packed with people and busy common areas where social distancing rules followed by hotels are just impossible.

I can certainly echo what others have remarked about RS guidebooks. I recall the first two RS guidebooks I purchased well before ever thinking of traveling to Europe. They were "Europe Through The Back Door" and "Mona Winks." Although most of our travels are independent we have taken 6 guided tours with added time on our own.

In addition to the guidebooks, I am missing my frequent stops at the RS Travel Center in Edmonds and the many classes I have taken over the years. The staff are highly professional, knowledgeable and friendly. I will miss the Travel Reunion in January. I was in Edmonds a few days ago and it was like a ghost town. Challenging times...

Janis,
I went to the Reunion in 2019 and had such a wonderful time I had planned to attend in 2021. I hung out awhile in the travel center between events and enjoyed chatting with the staff who work in the center. Everyone seemed to love what they do. Since I don’t live close by and have limited vacation days, I felt every other year would work for me. Edmonds is a charming small town and I’m sure they are hurting economically with RS cutting back. So unfortunate!

As many of you have said, the RS guidebooks are invaluable for those of us who travel independently. I have never taken a Rick Steves tour, but follow many of his recommendations re lodging, meals, sights to see and practical matters. I also have used the Arthur Frommer books, as the two guides complement each other.

Guided tours have been great for us in places outside Europe where the language and signage are incomprehensible to us or the culture is too different for us to function comfortably (Kenya, China, Turkey, Egypt). I hope sales of the books keep the "Back Door" open for future travel when it is safe and practical to get going again.
In the meantime, I continue to lay out itineraries for trips in Europe, the U.S., Canada, Costa Rica and New Zealand. I am so glad I was able to fill my #1 bucket list in 2019 with a trip to Egypt! I am sure I will be on the road again in 2021, God willing!

While I wish nothing but the best for Rick and his crew. The realities are in between the lines.
If RS is making plans for 2 very very bad years. Then obviously he has reason to believe this situation is likely enough to happen that it justifies the steps needed to protect the company if this should happen.
This is way beyond the buy and extra roll of toilet paper when at the grocery store level.
And I would expect that this is something that was be thought about and considered for a while then the plans and numbers had to be worked out and the final decision had to be made so I highly doubt this was a spur of the moment thing.
So even as the be cheerful be happy msg was playing out here this was probably being considered.
The next unhappy between the lines point is that many people can not truly afford to take a 10% cut in pay. But if your pay is cut but your job is not do you have the option for unemployment? And if that second 10% hits and you are facing a 20% cut how many people can take that cut in pay. (Unfortunately a lot of us may find that out on our own)

It is easy to say that everyone takes a 20% hit but it is not as easy to live with, a person earning 20 who lives hand to mouth loses 4k And needs to cut expenses buy that amount (good luck). A person earning 40k and putting away 4 k a year Takes a cut of 8k and needs to cut the same 4K but probably has more places to cut. A person making 80k on the other hand probably is putting close to that 16k (or more) away each year and has a lot more flexibility to absorb this.
So it SOUNDS good. But it may not be enough for some of the employees to be able to live on.

And now we get to the dark part. If the company is in a budget saving to ensure long term survival against this possible 2 year hit then the question is. How much does this forum cost to keep going? And is this a luxury that RS can afford to keep?

Note I would ask this directly but RS is well known for not directly participating here. (Yet another sad point against the long term survival of this forum as RS does not have a personal emotional connection with it).

And before anyone jumps me for being gloomy... remember you jumped a lot of folks that questioned the likelihood of travel this year and then folks questioned those who wondered if travel in 2021 would happen and now Rick himself is taking steps in case travel does not return until 2022.

And if you look at the number of new topics posted lately things are not exactly busy around here. And if Rick’s worry turns out to be true.. then this forum may not see an increase for years.

Now that being said we are still in the early stages of this pandemic and we have no idea if the number will go down, if this will just go away (that HAS happened to pandemics in the past) or if the reopening will make things worse Or if we may see more waves of this or if/when we get a treatment and or vaccination. The truth is that it is ANYONES guess. And no one knows. Some peace are making intelligent guesses based on experience and such but really everyone is just making WAG (wild a#$ guess) But is an expert on international travel is concerned then logic states we should all be concerned.
Personally if I was consider a trip in the future (something off the table once may travel partner/father took ill last year) then I would go out and buy what I needed from a Rick to try and keep this going as much of my interest in European travel as an adult stems from watching Rick’s shows and I learned a tremendous amount from his videos and books. Unfortunately having recently seen all of my design projects put on hold, drastically delayed or outright canceled and with expenses of taking car of my father this past year and into the future I am just no at a point I can go pick up Rick’s books just for the pleasure of reading them. As they are not inexpensive. So I am afraid I can’t help.

Good luck Rick I wish you the best.

A sad note is that the 2020 guidebooks may have many obsolete small hotels, restaurants and museums listed in them by the time travel to Europe is back up & fully running.

@Doulgas: the marginal cost of running an online forum that doesn't host heavy-size media itself (videos, high quality pics), with a few thousand users, is very small in the grand scheme of things. The IT infrastructure itself shouldn't cost more than $ 6-8K per year. You don't need more than 0.2 full-time-equivalent back-end developer-equivalent time to keep it smooth and tidy. There is also the cost of moderation on the forum.

The forum is also a very nice product for RS (company) to have: it gets hundreds of knowledgeable persons, clients, would-be clients or people with some affinity to the product, to provide extensive engagement, mostly useful tips, feedback - all free of cost to the company. This engagement of users, by itself, more than pays for any reasonable cost of running a forum like this.

I too have respect and admiration for Rick Steves the boss. He seems to be running his sole proprietorship with more of a European social stakeholder model, than an American capitalistic shareholder model. Rick must have learned a lot traveling and experiencing European culture.

@Andre. Yup, just came into say that. A forum like this costs next to nothing to run and is a good way for the RS company to promote itself. I’m going to guess that the moderators are employees that have other duties. The moderation here is basically zapping spam posts and the occasional shut down of a thread that gets too political or goes way off track.

I’m no IT expert, but I’d imagine the RS company has a robust website, they’re selling tours that cost thousands of dollars so this board should be no added burden.

WOW!! Thank you for posting this.

How very, very generous of Rick to do that, and I sure hope his employees realize what a rare and generous (compared to many business owners) commitment he is making to them.

I have a feeling that when he is a very old man (and may need assistance of some sort), there will be many in the Seattle area checking up on him. And, I also have a feeling that when the time comes for him to leave this earth, his memorial service will be TOTALLY PACKED by those who appreciate and admire him. Not a bad way to live.........making the lives of others better.

While some of his staff may choose to move to other opportunities, those who do not, I am sure will be telling the story 10-15 years from now of how Rick got them and their families through this difficult time............these kind of things are not soon forgotten........they touch people deep in their hearts.

Thanks, Rick, for being such a good guy and for using your wealth to help those who helped support your success along the way.

I always buy his guidebooks before I go to Europe, but I think the ones out now will be way out of date by the time I can travel there again.

While I can definitely see that parts of a 2020 guidebook will be very out of date, they can still be useful for some preliminary trip planning. I assume there won’t be updated print guidebooks for 2021, but the staff does a good job of providing updates on the website.

The major attractions won’t change, although admission may be more difficult with social distancing. But, that’s a good way to prioritise the trip.

Yeah. I can definitely see some of Rick’s independent hotels and B&B’s not making it. But, some of those places close every year anyway. Each year, it’s more difficult for the Rick type places to survive.

Restaurants? I’ve always thought it was kinda pointless to mention restaurants as they go out of business or change even in the best of times. It’s helpful to know which areas of a city are known for nice cafes, Chinese restaurants or funky coffeehouses but individual names are kinda meaningless to me.

FYI--the tours came first. Rick wrote a basic guide for the people taking his tours--when he led them himself.

When he would hold seminars to help market his tours, some people wanted the guidebooks but not the tours. So he decided to start selling them

In the late 80's and early 90's he had representatives hold seminars to sell his tours and some basic products. I still have the original Back Door Bag--the original Rick's bag--with a tag that says 1988. The design is nothing like today's carry on.

While his travelers do tend to be older I think they may jump on board quicker because they feel the pressure of being older and know time may be limited for travel while they are healthy.

Judy B, you've got it. This is something I've been thinking about lately, and one of the reasons I'm so disappointed that our 2020 RS tour was cancelled. Stan and I met with Kim this weekend (socially distancing!) and she mentioned she and her David are concerned about possibly having to take fewer trips as they get older. Well, Stan and I are 10 years older than they are, and can see the handwriting on the wall.

We're still very healthy and stay active, but I know I have neither the strength nor the stamina I used to have. I'm beginning to feel a bit anxious about how much longer we can take active tours. We started taking RS tours in 2009, and would like to continue taking them as long as we are physically able, which means able to keep up with the guide, and not holding back the rest of the group.

So yes, when Rick starts up his tours again, we intend to travel with him.

It's really stunning to consider the unemployment rate is 40 percent for those with a household income up to $40,000. There aren't many jobs for the unemployed.

BigMike, a couple of weeks ago, I heard an interview with the governor of Oklahoma on NPR. The subject was the impact of border restrictions (due to COVID) on migrant workers creating a shortage of agriculture workers in the state. Rather than criticize the policy, he said words to the effect that all of the newly unemployed folks in US cities should consider moving down there to take up the plentiful field work.

Sure, we'll put up lean-tos for them.

On a more serious note, when my mother was a girl, her family did that kind of work - following the crops. Oklahoma, Texas, New Mexico, Arizona, and California. She said was ugly, dirty, demeaning work.

Stan, interesting dilemma for OK. The stimulus unemployment benefits are pretty good for a lot of people, and if it's extended through the year it may be a disincentive particularly low pay manual labor. The governor doesn't need to worry about a bunch of New Yorkers descending upon his fair state.

Big Mike and Jane,
Y’all are too funny!

Noted the RS Tour COVID FAQ has been updated.

RS will not be taking any further payments for any 2020 tours.

No further cancellations have been announced (yet) past the already stated August 15th date.

As Frank II mentioned, the Rick tours came first, followed by the early handmade versions of the books. It got to be too much for him alone, so started hiring local European tour guides and others to do the research for his books as he added more and more countries. He then ventured into the PBS travel shows, finding major travel companies to fund the episodes.

He had built quite an empire with bus companies providing excellent drivers and new buses to haul everyone around, several hotels that basically continued to exist only because his tours buy out the hotels for many weeks during the travel season, and a name familiar to nearly everyone in the areas where his tours went (sometimes that was not a good thing lately due to over tourism). He was also not afraid to change the tours eliminating many that had been popular and replacing them with others that turned out to be just as popular. All done at a slow, careful pace, allowing him to be in the position he is today where he will be able to continue on at a reduced level for the 2 years he expects it to take before travel recovers enough.

Smart business move. He has to cut employee hours, so why not reduce their workloads- processing payments and the even bigger headache of processing refunds should he have to cancel additional tour dates. There is also the additional cost savings by delaying the final payments. Credit card banks do not work and process charges/refunds for free. The merchant loses money in the transaction: charge then refund- the merchant is still paying fees to the bank that result in a monetary loss to the merchant. All part of his announced wait and see approach for the rest of 2020. I wouldn’t overly read anything into it- just yet.

A local university has furloughed employees making more than $40K. I wonder if those making say $75K can accept $40K over being furloughed. I would. Maybe the budget is designed to furlough those over $40K so tough luck for them. It can be heartbreaking at times.

I'd take something over nothing in a heartbeat if possible.

If I was Rick, I’d just go ahead and cancel all of 2020. Even with reopenings, there will still be too much uncertainty regarding group travel this year. And, that’ll reduce the stress on the employees. There’s nothing worse than being badgered by a customer who thinks s/he is Perry Mason and trying to pin you down on something. The only correct answer right now as to when RS tours will resume is ‘I don’t know’

I don’t know the labor laws in Washington state nor if they’re union, but if voluntary furloughs are allowed then canceling 2020 might allow some employees to take temp jobs for a few months and keep the $$$ coming in while being able to return to RS in 2021 if things are better for European travel.

I saw something on the FAQ page that I had not previously noticed

If you chose to cancel your reserved seat at least 60 days before your departure date and before we cancel your tour, you'll get a full credit on a future Rick Steves tour (through 2022).

I knew they had extended the credit through 2021, but I see it is now through 2022.

A local university has furloughed employees making more than $40K

BigMike, I wonder if those furloughed are admin staff. My wife is a director of a school of nursing. There are strict guidelines regarding student/teacher ratios for a nursing school to be accredited. Luckily, she had helped move a substantial amount of the classes to online teaching, therefore they were in a good position. She teaches as well and has just started her summer semester classes.

Her university is using furlough days on a sliding scale. The higher your salary, the more furlough days you have to take. The lowest paid staff members (grounds crew, custodians, etc.) will not have to take any furlough days. I think it is a compassionate response to a tough situation.

Rick has always impressed me as a stand up guy. It sounds like he's treating his employees well for the horrible situation the travel industry faces.

When my husband worked at a local university, furloughing the administrators would not only have saved money, but it would have improved the productivity of the other employees. The amount of my husband's time wasted by the asinine policies of administrators would have to be seen to be believed.(And 30% of his grants went to the university to pay "indirect costs".

Another thing is that Rick talks a lot about investing back into the community. So, I doubt his company is sitting on mountains of cash locked in a vault. I’m sure the decision was hard. I’m glad I won’t wake up to news that after the staff cuts, Rick went out and bought a private jet! I can’t say that about a lot of companies these days.

I don't buy guide books or take tours. RS comes across to me as a decent man and I wish him and his business all the best.

Yes, Dale, I would be very surprised if Rick bought a private jet. Especially for an advocate for public transportation. As one of his charitable initiatives, he bought a 24 unit apartment building in Edmonds and donated it to a nonprofit which provides housing for women and children. From what I’ve read, he walks the talk of good works.