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Agents of ChangeMay 28, 2007 By: Mark Rogers, Joe Pike, Jennifer Merritt, Debbie Strong, David Eisen, Dan Butcher Travel Agent
These entrepreneurial professionals are paving their way to profit through organic growth and acquisitions
Acquiring and merging. Staying technologically savvy.
Marketing to a niche. To keep pace with this ever-changing industry, your
agency must be doing at least one—if not all—of these things, as they are the
key to strong growth and sales.
But that's just pointing out the obvious. "There are a
lot of agencies out there that are succeeding and growing and increasing
profitability," says Robert Joselyn, president and CEO of the consultancy
Joselyn, Tepper & Associates and the benchmarking service Travel Agency
Management Solutions. "These things aren't new, it's just that some
agencies are doing them better than others."
Here, Travel Agent profiles six successful agency
owners to learn from.
Uniglobe Wings Travel
Blue Bell, PA
In the last two years, Uniglobe Wings Travel has acquired
three agencies, all located on the east coast in locales ranging from
"It's turned out so well that I'm always open to doing
something like that again," says Kate Murphy, the agency's owner.
The acquisitions helped facilitate a revenue of $22 million
last year, and Murphy says that the agency is on track to match that figure—if
not surpass it—this year.
"We've been lucky that the last two agencies we
purchased were owned by men who where thinking of retiring," she
"That was good, because they weren't desperate to sell.
We don't go out and target specific agencies. More likely it's a cruise account
manager or a tour manger that says, 'So-and-so is thinking about selling,' and
then we just start up a conversation with them."
As simple as it sounds, Murphy knows these proposals aren't
something to be entered into lightly.
"We have questions that we ask," she says.
"The agency needs to be using the same suppliers that we do, or it's not a
good fit. I also look for longevity of the staff with the previous owner—it
According to Joselyn, Murphy has the right formula. "It
has its advantages if you buy right, not just in price, but where there are
synergies," he says.
Even so, Joselyn says the M&A market is starting to
cool. "The fact is that there are fewer acquisitions in the marketplace
because a lot of the agencies that are not economically viable are getting out
of the business," he says, "so the population has gotten smaller, but
the quality of businesses has gotten higher."
Uniglobe Wings Travel business is split 50-50 between
corporate and leisure bookings, with only four home-based agents comprising its
corporate staff. The acquired agencies are all focused on leisure travel.
"We felt that it was a good way to grow, and I still
think that leisure needs to be brick and mortar," Murphy says of the
acquisitions. "There are still people who want to go in and sit with
someone to book travel," she says. "They know who and where you
Of the agency's booked leisure business, Murphy says that
it's about 40 percent luxury and that the rest is midscale.
"We don't do any budget at all," she says. About
85 percent of bookings are Vacation.com
suppliers, of which Uniglobe Wings Travel is a member and whose advisory board
Murphy sits on. She also is vice president of her local American Society of
Travel Agents (ASTA) chapter in
of Uniglobe Franchise Owners Association in the mid-Atlantic/northeast
Even with her full schedule, Murphy continues to look for
ways to grow. She says she doesn't currently have any acquisitions in the
works, but adds, "We're always looking to acquire."
Frosch International Travel
Bryan Liebman, president of Frosch International Travel, a
Signature Network member, has seen a lot of change since he joined the family
business in 1999. "Our business has grown both organically and
inorganically," says Frosch. "We've added agencies and hired new
agents to service our existing client accounts."
Frosch maintains offices nationwide, placing it among the
top 50 agencies in the
with dedicated divisions for corporate, leisure, offshore and marine, groups,
meetings and incentives.
As an example of the company's growth, Liebman notes that in
the last two years, Frosch International Travel, which is headquartered in
"Agencies come to us because they like our business
culture," explains Liebman. "We have core competency in areas such as
IT and accounting, and this frees our agencies to concentrate on what they love
best, which is selling and client relations. We attract agencies that
specialize in high end service."
When Liebman started in 1999, the company had a total of 50
agents. "Presently we have about 400 agents, including about 100
home-based agents, which is a growing segment for us," he says.
Consultant Joselyn says that it is common for successful
businesses to have models built partially, if not wholly, around independent
"How to find them, support them and keep them in your
corral is something of a business art form," he says, "and the guys
that are doing it well are really growing their business."
Since 1999, the company has grown 30 percent every year due
to both internal growth and strategic acquisitions.
Frosch's business-to-leisure ratio has remained the same
throughout their expansion, being about 55 percent corporate and 45 percent
leisure, although the company continues to expand in both areas.
"The consolidation of retail travel agencies continues,
and the acquisition field remains extremely busy," says Liebman, providing
a counterpoint to Joselyn's assertion that the M&A market is cooling.
"I see it continuing on the consolidation front, and being busier than
President and CEO
World Voyager Inc.
Federal Way, WA
Jerry Vaughn has done a lot over the past 18 months. Along
with his business partner and wife Cindy, he's added a retail store, launched two
web sites, moved his business from "cruise only" to "total
vacation" and switched affiliations (he decided to drop the cruise
franchise tag and team with Ensemble, adding a better mix of options for his
substantial premium clientele). That's a lot for anyone's plate, but Vaughn is
adamant that quality still matters more than growth.
"We are not looking to be big," he says,
"just good at what we do."
Pithy, yes, but it doesn't mean that the expansion bug
hasn't bitten Vaughn. His company, World Voyager Inc., snatched up one of its
competitors, and Vaughn now runs two retail stores, World Voyager Vacations and
"We finished last fiscal year as our best ever,"
Vaughn says. He expects even better things this year.
"The trend so far this year is a little over 20 percent
growth from year to date," he says. "All things being equal, we are
encouraged that we will see increased revenue." Overall, Vaughn says his
agency sold more than 1,700 cruises in 2006, mostly in the premium cruise
market, but a substantial portion of his group business was with the
Considering he started out in law enforcement and only has
been in the travel industry for eight years, Vaughn's success story is
remarkable. He attributes his strong growth to hiring and retaining the right
talent. "We have hired some new personnel, redefined the duties and
responsibilities of a few positions and retrained others," he says. His
inside workforce has now doubled and he also retains four home-based agents for
The rosy outlook is, indeed, helped out by Vaughn's two
web-based divisions. One, www.alaskacruiseagents.com, is designed solely for
is for businesses looking to conduct meetings, conferences or workshops aboard
cruise ships. "The launch of the two additional web sites has definitely
impacted our growth," Vaughn says. "It has stimulated a significant
number of quote and proposal requests from throughout the country, which
broadens our market."
Vaughn says that his business mix is about 60 percent in the
premium market, the balance in the contemporary or mass market. More than 60
percent of his business is still cruising, but he adds that the land and tour
side is his fastest-growing segment.
Like most fortunate agents, he's been able to reap the
rewards of his trade. His favorite vacation memory was a stay at Le Meridian in
Bora Bora, which was only a precursor to a seven-day cruise on Regent's Paul
Gauguin and a two-day stay at the InterContinental Beachcomber on Moorea in
that," he says, "but I don't know how."
The Leaders Group/Carlson Wagonlit Travel
New York, NY
Many "agents of change" feel that expanding their
business is a necessity in order to survive. "We understand the impact of
the phrase 'If you are not growing you are dying,'" says Tom Carlsen of
Manhattan-based The Leaders Group/Carlson Wagonlit Travel.
And so the agency's owners took their businesses in
and placed them under a parent LLC, The Leaders Group.
They also took an active part in the selling process and
brought in an additional $5 million in new accounts, as well as making their
first acquisition of a $3.5 million agency in
to grow the brand in the Northeast market.
Carlsen explains that business conditions were the driving
force behind the expansion, thanks to a change in attitude in small to mid-size
corporate accounts. "These accounts were moving away from a liberal policy
of allowing employees to purchase their tickets via the web in favor of a
managed corporate travel program and customized web booking engines that
provided control spending and web-based reporting," he says.
The February 14 Jet Blue weather fiasco and others like it
also contributed to increased revenue for agencies. "Those who booked on
the web were left with the difficult task of finding an alternate way
home," Carlsen says. "The companies with travel management companies
were able to call their agent or after-hours support team to assist them."
The expansions have helped Carlsen's company to increase its
annual revenue. "After the consolidation and formation of the LLC, we were
at $120 million. New accounts and acquisition now has us at $135 million,"
he notes. "Our target for year-end 2007 is $175 million."
To deal with the expansion, Carlsen's company did increase
their agents by six. They now have 89 agents, including 30 home-based agents
and 22 independent contractors, some of whom they added with their
When asked if his company will continue to expand, Carlsen
responded, "Yes, with continued focus on acquisitions and marketing of new
"We will not take on any new business for the sole
purpose of adding volume that will have a negative impact on our bottom
line," he adds. So far, expansion has only helped that bottom line.
Executive Vice President
The Travel Authority
As far as the travel industry goes, you can say that Lee
Thomas and The Travel Authority (TTA) grew up together.
Thomas, now married with two children, joined what is now
known as The Travel Authority 14 years ago, bringing a sales background to the
then-small company, but had no prior experience working in travel. Formerly a
financial analyst of a large automobile manufacturer, Thomas began at TTA in
accounting and information technology, then spent several years managing the
accounting and IT groups before taking on his most recent role as executive
vice president. As Thomas climbed up the ladder, naturally his business did the
During his tenure at the company, Thomas has seen TTA become
an American Express agency and buy more than 30 travel companies, expanding its
regional strength and footprint. It continues to grow by selling its in-source
solutions, such as it 24-7 service to other agencies.
For example, it offers sports fans an opportunity to travel
through Champion Sports Tours, and various companies book through TTA to take
their employees or customers on vacations arranged by Rewards Unlimited, which
specializes in high-end incentives departures.
Perhaps the biggest factor that contributed to TTA's current
success was the 2005 development of its SwiftTrip technology. Along with its
two other partners, TTA formed this software development company that
specializes in builder web sites and booking engines for the travel industry.
With this service, TTA was able to offer business and
leisure travelers a local servicing agent at one of its 50 locations in five
different states. If the end user needs to talk to an expert, they can, thus
combining technology with person-to-person interaction. TTA has found a unique
niche in airports that want to add booking capabilities to their web sites for
"We think any organization that is looking to expand
its service offerings to members are also potential customers," Thomas
According to Joselyn, staying abreast of the latest
technology is a key factor for agencies to stay afloat. "Some agencies
understand that they're solution providers and they're doing that very well and
charging for it," he says.
"In TAMS, we've got some leisure agencies who have
embraced the web, not as a competitive threat, but as a marketing tool,"
says Joselyn. "They have obviously spent the time and the resources and
acquired the know-how on how to compete and use the Internet as a
communications and marketing tool."
Today. TTA is about 70 percent corporate and 30 percent
leisure. TTA employs agents to staff its online desks, home-based agents for
its 24-7 support centers and has an independent contractor program with about
105 agents. Additionally, the agency is booking about $300 million in sales
annually through its six call centers, more than 45 retail storefronts and its
web site, www.thetravelauthority.com.
Owner and President
Carlson Wagonlit Travel affiliate office
"In this industry, you have to be an 'agent of
change,'" says Cindy Harris, a Carlson Wagonlit Travel affiliate agency
owner who has worked in the business for more than 25 years. "That's the
nature of it. You always have to approach things proactively."
Harris recently expanded her
1999, by opening a second branch.
"I had a couple of agents come and say they really
wanted to work with me," says Harris, who adds that the agents all knew
each other and knew of her because of her local reputation. There wasn't room
at her main office, which houses five agents plus Harris. After weighing her
options, she decided to open a satellite office in
Calling this branch a "new concept," Harris says
that the new office hosts four independent agents who are paid strictly in
commissions and who don't necessarily work full-time.
"It's a win-win situation for all of us," she
says. "They get to make their own hours, and since I'm not paying them in
salary, they aren't taxed as much on their earnings. I get to keep a cut of
their commissions. It's more incentive for them to go after business. The
harder they work, the more profit they—and I—make."
Harris says the new office handles about 60 percent
corporate travel and 40 percent leisure, while the first office has a mix of
about 80-20 corporate to leisure travel.
Though initially it was tough to take the leap, Harris
believes she made the right move. "At first it was scary," she
recalls. "It was a brand new thing and it had been a while since I had
opened up a business." A friendly work environment contributes to Harris'
success, she says, and notes that all of her employees are female and that they
get along "really well—no catfights!" she laughs.
Harris says the recent busy winter season has helped the new
office grow, and that by next year "we should be very profitable."
She says her company reports an annual revenue of $4.5 million, and expects to
add to that significantly with the new branch.
As for whether she has plans for future expansion, Harris
says, "We'll have to wait and see. I don't want to take away from my
customers...right now, I'm happy."
—Dan Butcher, Dave Eisen, Joe Pike, Jennifer Merritt, Debbie Strong and