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Purchases, Expansion Signal Faith in Agency Distribution SystemFebruary 18, 2008 By: Travel Agent Central Contributor Travel Agent
IF YOU ARE A travel agent doubting the future viability of your agency or the travel agency industry, take heart. 2008 has opened with several confidence-building moves that underscore consumer and industry faith in the value of travel agents.
The first is the formation of Travel Acquisitions Group (TAG) by two of the most respected executives in the industry, Michael Batt and Roger Block. They created the corporation to purchase the Carlson Leisure Group (Carlson Companies' leisure-related businesses), which was folded into the new organization.TAG will pursue an aggressive acquisition strategy and hopes to expand its sales/asset base by $1.5 billion within two years.
At the announcement of the new group, both Batt and Marilyn Carlson Nelson, chairman and CEO of Carlson Companies, reaffirmed their organizations' confidence in the future of the agency industry—leisure travel included. "We believe in this business," Batt said.
TAG will include several franchise groups: Carlson Wagonlit Travel, Cruise Holidays, Results! Travel and SeaMaster Cruises. Companies owned by TAG account for $1 billion in annual sales, while independently owned franchise agencies have sales of nearly $5 billion. The Carlson Leisure Group had grown from 960 locations to more than 1,700 since 1996. TAG can be expected not only to acquire more agencies but also to invest in marketing and technology infrastructure.
Meanwhile, the U.K.-based global host agency Travel Counsellors has expanded its U.S. management team and set a goal of recruiting 300 to 400 agents in the U.S. and elsewhere in the next year. It now has 870 full-time agents.
The company, which has had sales of $430 million, forecasts sales of $514.7 million. It has reported a 21 percent increase year over year in sales and won awards in Britain for its service quality and enterprise.
To spearhead Travel Counsellors' U.S. growth, Peter Rasmussen was named president, North America, and Darya Camacci senior vice president of U.S. operations. Rasmussen was promoted from general manager, while Camacci came over to Travel Counsellors from Auto Europe, where she'd been senior vice president of sales.
Homegrown agencies are expanding as well. Protravel International, headquartered in New York City, opened its 23rd full-service location (in Grand Rapids, MI), and Protravel president Priscilla Alexander reports that projected sales for her entire company are $540 million. In business since 1984, Protravel has close to 650 employees, is the largest producer for Virtuoso and is ranked among the top 15 privately owned agencies in the United States.
Another upbeat indicator is that Protravel has established a division called Virtually Pro, or VPro, which is focused on home-based agents. VPro will provide them with cutting-edge technology, marketing support and a pro-growth culture.
Are TAG, Travel Counsellors and Protravel alone? We doubt it. We see online travel-selling giant Expedia's recent deal with Canadian franchiser CruiseShipCenters as an indication that even online players want the offline skills of personalized service and knowledgeable staffs that agencies provide. (Panelists at the Association of Travel Marketing Executives' annual forecast luncheon also cited an increasing emphasis on personal service by online travel agencies; see "Travel Execs Point to Sectors That May Suffer or Boom".)
Last but not least are the industry suppliers making a massive, ongoing multibillion-dollar investment in new products, services, itineraries, attractions, technologies and marketing. For most, the expansion of the travel infrastructure is a sure sign of confidence in the clout of retail agents. —GEORGE DOOLEY