Several Caribbean and Mexico travel specialists have spoken to Travel Agent about the impact the recent consolidation of Apple Leisure Group and The Mark Travel Corporation will have on their business to both destinations.
The consensus?
Some advisors have concerns about how it will all play out, but won't make a full judgement on the deal until all of the details have been disclosed.
Earlier in the week, it was announced that Apple Leisure Group and The Mark Travel Corporation have signed a definitive agreement “to create an integrated leisure travel and technology solutions company,” according to a news release by both companies. Financial terms of the private transaction were not disclosed. The transaction is expected to close in the second quarter of 2018, and is subject to customary regulatory approvals.
The combined company will continue to operate the collection of brands offered by Apple Leisure Group, Mark Travel and Trisept Solutions, and maintain principal executive offices in Newtown Square, PA, and Milwaukee, WI. Mark Travel’s tour businesses will also gain access to 52 high-end resorts and spas operating under the Zoetry, Secrets, Dreams, Breathless, Now and Sunscape brands, which are all popular in the Caribbean and Mexico.
The deal means that many of the top tourism products in the Caribbean and Mexico will be now be offered under one umbrella.
Pam Young, senior vice president of industry relations for Travel Leaders Group, however, told Travel Agent she believes the joining of the companies could benefit travel advisors in the long run.
"Since travel agents sell the majority of volume for both of these brands, we believe that the retail travel distribution channel will be more important to them than ever," says Young. "If this merger results in broader product offerings and other efficiencies, it will be a good result for the agency community. In general, travel agents are loyal to a particular tour operator. If the merging of these brands brings about more content in their product offerings, that is good for travel agents. We look forward to the increased opportunities this merger may offer."
Lauren Cardinale of Travel Design Co. said her agency was worried when Marriott [International] and Starwood [Hotels and Resorts] joined forces, "and they’ve now proven our worry was real."
However, Cardinale added that she would form a stronger opinion about the ALG/Mark Travel consolidation once all the details are fully disclosed. And that is not likely to happen to until after the merger officially closes.
"I think this merger is a wait-and-see game," she says. "It isn’t clear yet which company will be absorbed the most and until we know that, we won’t know how it will affect the industry. We knew with Starwood and Marriott that Marriott's strategy would be implemented across the brand structure. Unfortunately, Marriott excels in the select service product and Starwood excelled in the luxury, full-service market. It is clear that the luxury market has taken a hit with Marriott's sales strategy, particularly with group planners, but because their footprint is so large now, it’s irrelevant to their bottom line."
Terrah Van Meter of Legacy Travel says the combining of the two companies could be positive for the industry so long as the move doesn't eliminate some advisors' most trusted destination management companies (DMCs).
"While it will be nice to have all of the hotelier partnerships under one umbrella, the travel agent community has concerns about our DMC friends like Lomas [Travel in Mexico] and CAT (Central American Tours)," says Van Meter. "We pray that Apple Leisure group realizes that these DMCs are the heart and soul of these destinations and it’s crucial to keep those partnerships strong."
Apple Leisure Group includes major Caribbean and Mexico operators, Apple Vacations, Cheap Caribbean and Travel Impressions. In Mexico, Travel Impressions represents 270 hotels and resorts, 259 luxury villas and 68 tours. Travel Impressions also includes roughly 30 Caribbean islands and more than 200 Caribbean hotels in its portfolio.
In an exclusive statement issue to Travel Agent, Alex Zozaya, who will be the CEO of the new combined company said, "For travel agents, this strategic combination will result in greater breadth of product as well as enhanced value for their clients. On the technology side, we’ll be working toward a unified platform with the ultimate goal of increasing travel agent productivity and helping our agent partners better serve their clients in an increasingly competitive marketplace.”
Vacation brands managed by Mark Travel include Blue Sky Tours, My Destination Wellness, Fun Jet Vacations, Mark International, Southwest Vacations and United Vacations.
"I feel that this merger could indirectly affect my Caribbean and Mexico business," says Nikki Miller, owner of Travel With Nikki. "If by bringing all of these brands together, they can get even better hotel rates, and pass those rates onto industry professionals, then the other luxury suppliers that I use for these destinations might not remain as competitive on price."
Miller also told Travel Agent she has customer service concerns when the companies do officially join together. She is also in "wait-and-see" mode as she sees what happens with each company's call centers (she says she has experienced long hold times with both), as well as what happens with pricing, since the two entities have in the past been strong competitors in the marketplace.
A spokesperson for Mark Travel told Travel Agent, "We look forward to sharing more as the process continues. As we are in the period before closing, and we are under regulatory review, certain details cannot be shared in response to your questions."
ALG did not respond to Travel Agent's requests for comments at press time.
Visit www.appleleisuregroup.com and www.marktravel.com. Keep visiting www.travelagentcentral.com for all your latest travel news. Be sure to follow Travel Agent’s Joe Pike on Twitter @TravelPike and Instagram @pike5260.
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