Deal Caps Strong Year for Agencies

AS 2007 DRAWS TO a close, the travel agency business is looking back on a good year, as the percentage of consumers booking travel online dropped and agents reported high sales for the year, complemented by strong forward 2008 bookings. Other segments of the travel industry appeared to be thriving in 2007, too, as U.S. airlines emerged from bankruptcy and hotels continued to be full. Many in the industry see the acquisition of Liberty Travel and Gogo Worldwide Vacations by Australian company AS 2007 DRAWS TO a close, the travel agency business is looking back on a good year, as the percentage of consumers booking travel online dropped and agents reported high sales for the year, complemented by strong forward 2008 bookings. Other segments of the travel industry appeared to be thriving in 2007, too, as U.S. airlines emerged from bankruptcy and hotels continued to be full. Many in the industry see the acquisition of Liberty Travel and Gogo Worldwide Vacations by Australian company Flight Centre Ltd. as yet another sign of life in an industry that was gasping for breath just a few years ago.

"The Flight Centre acquisition presents a great opportunity for Liberty Travel and Gogo, and we're delighted to see such a positive indicator of the strength of the American agency and wholesaler market," says Steve Gorga, president and CEO of Travel Impressions, which, like Gogo, specializes in vacation packages to the Caribbean. "We're not surprised that Flight Centre has seized this moment for expansion." Gorga adds that 2007 was Travel Impressions' best year ever.

As the larger, branded agencies expand, profitable smaller agencies have been consolidating over the last few years (with those in it just for the perks essentially disappearing), paving the way for savvy players both large and small to create standout business models, many of which we've profiled in this magazine.

"The American travel industry is going strong indeed," says Nico Zenner, general manager of Travel Bound, a wholesaler that works with both Liberty and Flight Centre. "While there is ongoing consolidation and a smaller number of storefront locations, the industry is healthy and strong players such as Flight Centre will continue to place their mark. Some other brands such as AAA are taking similar initiatives and have acquired or opened stores in a big and successful way."

When the $135 million sale to Flight Centre closes—probably by early 2008—Liberty and Gogo will become part of 17 other U.S.-based retail, wholesale and corporate travel divisions owned by Flight Centre. This will create the 10th largest travel group in the United States and the second largest brick-and-mortar leisure agency, after AAA Travel.

For Flight Centre, the purchase strengthens its presence in North America, adding 193 leisure travel shops on the East Coast and in Florida and Chicago, as well as 40 wholesale locations in 22 states. It's a smart move, given that many American travelers remain undeterred by the weak dollar, spending more money to customize or upgrade vacations. The combined companies are expected to produce annual revenues of $2 billion.

A Win-Win Situation

In a statement at the time of the sale, Flight Centre's managing director, Graham Turner, explained the reasoning behind the acquisition. "Firstly, access to Gogo's wholesale product range, particularly its core Caribbean and Americas offerings, will strengthen Flight Centre's global product platform," he said. "Secondly, Flight Centre will now have an iconic and profitable leisure travel business in the U.S.A. to complement its rapidly expanding Fcm Travel Solutions corporate travel business."  Flight Centre will have access to Gogo's many Caribbean products

Acquisition talks had been taking place for a while, said Michelle Kassner, president of Gogo, who noted several advantages of the integration for both Liberty and Gogo. "It benefits our business to be purchased by a large and powerful partner," she said. "Flight Centre's travel counselors will book our product, and it's just the right fit. Flight Centre has a very similar corporate culture to ours and a very similar business model." —JENNIFER MERRITT

as yet another sign of life in an industry that was gasping for breath just a few years ago.

"The Flight Centre acquisition presents a great opportunity for Liberty Travel and Gogo, and we're delighted to see such a positive indicator of the strength of the American agency and wholesaler market," says Steve Gorga, president and CEO of Travel Impressions, which, like Gogo, specializes in vacation packages to the Caribbean. "We're not surprised that Flight Centre has seized this moment for expansion." Gorga adds that 2007 was Travel Impressions' best year ever.

As the larger, branded agencies expand, profitable smaller agencies have been consolidating over the last few years (with those in it just for the perks essentially disappearing), paving the way for savvy players both large and small to create standout business models, many of which we've profiled in this magazine.

"The American travel industry is going strong indeed," says Nico Zenner, general manager of Travel Bound, a wholesaler that works with both Liberty and Flight Centre. "While there is ongoing consolidation and a smaller number of storefront locations, the industry is healthy and strong players such as Flight Centre will continue to place their mark. Some other brands such as AAA are taking similar initiatives and have acquired or opened stores in a big and successful way."

When the $135 million sale to Flight Centre closes—probably by early 2008—Liberty and Gogo will become part of 17 other U.S.-based retail, wholesale and corporate travel divisions owned by Flight Centre. This will create the 10th largest travel group in the United States and the second largest brick-and-mortar leisure agency, after AAA Travel.

For Flight Centre, the purchase strengthens its presence in North America, adding 193 leisure travel shops on the East Coast and in Florida and Chicago, as well as 40 wholesale locations in 22 states. It's a smart move, given that many American travelers remain undeterred by the weak dollar, spending more money to customize or upgrade vacations. The combined companies are expected to produce annual revenues of $2 billion.

A Win-Win Situation

In a statement at the time of the sale, Flight Centre's managing director, Graham Turner, explained the reasoning behind the acquisition. "Firstly, access to Gogo's wholesale product range, particularly its core Caribbean and Americas offerings, will strengthen Flight Centre's global product platform," he said. "Secondly, Flight Centre will now have an iconic and profitable leisure travel business in the U.S.A. to complement its rapidly expanding Fcm Travel Solutions corporate travel business."

Acquisition talks had been taking place for a while, said Michelle Kassner, president of Gogo, who noted several advantages of the integration for both Liberty and Gogo. "It benefits our business to be purchased by a large and powerful partner," she said. "Flight Centre's travel counselors will book our product, and it's just the right fit. Flight Centre has a very similar corporate culture to ours and a very similar business model." —JENNIFER MERRITT

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