The merger of Tzell Travel Group and Protravel is a marriage of corporate titans, according to one longtime industry observer.
Both are dominant players in the most competitive market in the world, said Jim Smith, founder of Brand Congruency and MarketShare companies and a 36-year industry veteran.
They both have a corner on the lucrative transatlantic market and help airlines fill the front of their planes with high-margin travelers.
“Airlines don’t call meetings in their boardrooms to talk about ‘How do we get more $200 fares into planes?’” said Barry Liben, CEO of the Travel Leaders Group, which owns Tzell. “But they do have meetings about getting more premium travelers and how to fill international flights with more high-end tickets.”
About 60% of both companies’ air business is international.
Liben said that Protravel doesn’t bring any new air partnerships to the Travel Leaders table.
“We’re just further solidifying our base as the No. 1 agency in the country with the right deals,” he said. “It strengthens our position in an ever-changing environment where airlines are consolidating and travel agencies are consolidating. “
Liben said that the Tzell-Protravel merger would strengthen Travel Leaders Group, and he described the two companies as mirror images of each other.
Protravel is a Virtuoso member; Tzell is a member of the Signature Travel group. The two companies will continue to operate as they are, with no plans to change either company’s business model or management. Priscilla Alexander, founder and president of Protravel, will continue as president.
The Tzell-Protravel merger comes less than a month after Omaha-based Travel and Transport, No. 12 on Travel Weekly’s 2012 Power List, bought Ultramar Travel Management, No. 29 on the Power List.
Like the Tzell-Protravel merger, Travel and Transport and Ultramar are continuing to operate under their own names.
Bill Tech, president of Travel and Transport, said Ultramar has such excellent name recognition that it was important to keep its name.
The combined revenue of Travel and Transport and Ultramar would have ranked them No. 11 as a single company on Travel Weekly’s Power List, right behind Travel Leaders Group (of which Tzell is a part).
More than half of Ultramar’s air is international, with a lot of transatlantic business and travel to Asia.
The combined sales of Tzell and Protravel (No. 18 on the Power List) are $2.35 billion, according to a company spokesman. Travel and Transport and Ultramar’s are more than $2 billion, according to Travel and Transport.
Tech said the difference between Tzell-Protravel and Travel and Transport-Ultramar is that the latter companies target medium to large companies, while Tzell-Protravel have large numbers of independent contractors who serve smaller companies.
“We are after a different market,” Tech said. “We almost never compete against Protravel and Tzell.”
Travel Leaders is on an aggressive acquisition spree: The group’s founder and chairman, Michael Batt, said recently, “If you’re not growing, you’re actually dying. It’s fundamental to our philosophy and culture. ... For sure, we’re going to continue to grow.”
Retail travel has been consolidating for the past several years, but Batt said in an email to Travel Weekly that there are differences between Travel Leaders’ strategy and the roll-ups on the late 1990s and early 2000s, which ultimately fizzled.
“I think there are a number of differences,” he said. “In particular, we have purchased solid, long-established, related businesses that are closely related to each other, we have not taken on onerous levels of debt and we are not relying on public investors.”
Follow Kate Rice on Twitter @krtravelweekly.