The announcement of a merger of mega agencies Tzell Travel and Protravel International, Inc., both headquartered in New York City, may be the first of many agency mergers in the next 90 days, said Bob Sweeney, president, Innovative Travel Acquisitions, a major travel industry merger and acquisition firm.
"The landscape is changing from the top down. Watch for middle market acquisition activity to increase in the next 90 days followed by more than normal merger activity amongst smaller agencies," Sweeney told Travel Agent.
The merged operations of Tzell and Protravel within Travel Leaders Group would represent combined annual sales volume of over $2.35 billion. The parent company - Travel Leaders Group - is believed to be North America’s largest traditional travel agency company with a reported $17 billion in annual sales volume and 6,000 travel agency locations.
"Both Priscilla (Priscilla Alexander, founder and president of Protravel) and Barry (Barry Liben, CEO of Travel Leaders Group) built their respective agencies from nothing. The great American dream does happen for those who work as hard and smart as the Tzell and Protravel owners," Sweeney said.
Travel Leaders noted that government antitrust approval will be needed.
Once once the deal closes later this month, Tzell and Protravel would continue operating “as is” with no plans to change the successful models both companies have created. Under the terms of the agreement, Protravel's Alexander would continue serving as its President.
"The timing is ripe for a vibrant merger and acquisition (M&A) market after a 3 year slow period. The aging agency owner population combined with banks again making Small Business Administration (SBA) loans because they realize this industry is huge in size and in the opportunity to prosper," Sweeney said.
Tzell Travel Group’s sales approached $1.5 billion last year. In turn, 2011 sales for Protravel exceeded $850 million, Travel Leader's Group said. Together the firms will have 72 branches that extend to most major markets across the country and in the United Kingdom.
Sweeney noted that Travel and Transport, Inc. and Ultramar Travel Management, Inc., merged with Travel and Transport in October, acquiring 100 percent of Ultramar in an all-cash transaction. Both are corporate travel management companies.
While it is anticipated that the merger will close in November, full terms of the deal will not be disclosed since both companies are privately held.
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