Who Is Buying Travel Agencies?

Gone are the days of the spouses of doctors, CPAs and lawyers being the buyers of retail travel shops, Bob Sweeney, president of Innovative Travel Acquisitions reports on the changes underway in retail travel. Today’s agency buyers are far more diverse, but share a common belief in the value of travel agencies and their profit potential, Sweeney says.

"Over the past few months we have received serious inquiries from two executives that have left GDS vendors, a barter corporation, an upscale social media website, a network for the military, a media group, a London-based tour operator, a corporate housing business, an insurance housing business, a medical research company, two human resource directors of fortune 500 companies, an immigration law firm and three corporate executives that where tired of the pink slip environment," Sweeney said.

Among the recently completed transactions by Sweeney’s brokerage is the sale of Plaza Travel of Florida to a Venezuelan travel company. Also recently sold is the Perspective Travel of Warren, NJ, Fugazy Travel of Asheville, NC and Just to Travel in Bridgeport, PA, Sweeney says. This brings the number of done deals to 529 completed transactions since ITA was founded in 1991.

"These buyers are providing our sellers with great exit strategy options," Sweeney said, noting the resilience of travel agencies. "These buyers need locations and agents that are open to any GDS system. Long term the retail industry has taken a huge hit since the '70s and '80s when airlines were paying 10 percent on all tickets and there were 30,000 locations across the U.S. Today there are approximately 10,000 full service headquarters locations.

"The use of travel agents is rebounding nicely as the stranding of thousands because of the European ash situation has really highlighted the value of a solid travel agent," Sweeney continued. “Priceline’s stock has dropped 100 points in the past month and Airlines Reporting Corporation (ARC) transaction numbers for the last four months of 2010 see agents share up 12 percent. This is the best available indicator of the pulse of the travel industry. I am confident of a sustained economic recovery and believe the ageing of agency owners is a major reason for selling an agency."

Sweeney’s tips for sellers include using a expert to represent you in selling your business; not limiting your buying pool; keeping the negotiation confidential and having a CPA prepare monthly income statements a year prior to listing in order to have a good, clean offering package for buyers.

Sweeney also urges sellers to keep their emotions in check when selling an agency. "The basic question for owners is if you want to write checks or receive one!" he said.

Visit www.TravelBusinessBroker.com.

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