For each of the three parties involved in Apple Leisure Group’s pending acquisition of Travel Impressions from American Express, the deal promises a different opportunity.
For Amex, the sale presents a chance to tighten the focus on its retail travel business as an added benefit service for American Express cardholders.
For Apple Leisure Group, it appears to be part of larger expansion plan made possible by — and apparently steered by — an earlier cash infusion from the Bain Capital Partners investment firm.
And for Travel Impressions, it’s mostly an opportunity to pursue business as usual — but with one less major competitor to worry about.
These opportunities arise from the deal announced last week under which Apple Leisure Group will acquire the global tour operator business of American Express Travel Related Services Co., including Travel Impressions, a wholly owned subsidiary of American Express.
Apple Leisure Group will also be acquiring American Express Vacations International, Amex’s international tour operator businesses in Europe and Mexico, which is managed by Travel Impressions.
Terms of the deal, which is expected to close by the end of June, were not disclosed by either partner.
Under the agreement, Travel Impressions will remain a preferred supplier of American Express Travel. It will license the American Express Vacations brand and will remain the exclusive supplier of packaged vacation products and services sold through that brand to American Express Travel’s customers.
Travel Impressions will continue to operate its business under its existing brand name. Travel Impressions CEO Steve Gorga said that all current employees would stay on with the company through the transition and that current plans call for Travel Impressions to remain headquartered in Farmingdale, N.Y.
News of the acquisition comes only months after Bain Capital Partners poured a significant infusion of cash into Apple Leisure Group in December.
In an interview with Travel Weekly in January, Apple Leisure Group CEO Alex Zozaya hinted that the Bain investment could signal expansion opportunities.
“The partnership brings new resources to fund further market expansion, portfolio growth, technological advancements and personnel acquisition and continues to enable us to deliver exceptional guest experiences,” Zozaya said.
For Amex, the decision to sell off its tour operations was about focusing its energies on the retail side.
“For us, we’re really a travel servicing business that adds value to the [American Express credit] card product,” said Lisa Durocher, general manager and senior vice president of the American Express U.S. Consumer Travel Network. “And that’s where our investment is going to go: to continue to provide programs and services to our card members, and the tour business doesn’t fit into that mandate.”
Durocher said Amex had been looking to sell off its tour business for some time and had several suitors. In the end, the company felt that the combination of Apple with Bain as an investor was the right fit.
“They had a really smart strategy and vision,” Durocher said.
While Travel Impressions is a preferred supplier for Amex, none of the Apple brands is. But Durocher said that after dealing more closely with Apple, making the company a preferred supplier certainly is not off the table.
Travel Impressions and Apple Vacations, Apple Leisure Group’s package vacation business, have long been fierce competitors in the industry, both having built their businesses on selling packages to fun-and-sun destinations and beyond.
Travel Impressions, founded in 1974, offers packages to more than 200 destinations, including the Caribbean, Mexico, Central and South America, China, Europe, Dubai, South Africa, Australia, New Zealand, Fiji, Tahiti, Canada and the U.S. It also sells more than 2,400 resorts and hotels and 1,350 villas.
Apple Leisure Group is a holding company comprising Apple Vacations, a vacation package wholesaler; AMResorts, a hotel management company; Amstar, a destination management company; and Unlimited Vacation Club, a members-only travel club.
Apple Vacations sells packages to Mexico, the Caribbean, Central America, Hawaii and Europe, and to U.S. and Canadian ski resorts.
Despite the fact that Apple has been a fierce competitor, Gorga sees several opportunities in the acquisition.
Offering one example of how Travel Impressions will likely benefit from Apple Leisure Group’s products, Gorga said, “Travel Impressions’ customers have often asked me if we would get into the charter business. … You can’t get charter flights through us. Apple Leisure Group has charter seats.”
He also mentioned Travel Impressions’ villa program as a product Apple Vacations might start selling to its clients.
However, he said, details of exactly how Apple Leisure Group and Travel Impressions will work together can’t be ironed out until the acquisition closes.
Asked if he has any concerns about being acquired by a competing company, Gorga said, “Not at all. The Mullens [Jeff and Tim Mullen, co-presidents of Apple Vacations] are really respected. They’re backed by Bain, which is an incredible company.”
Besides, he added, “It eliminates a competitor.”
Agencies observing the acquisition news last week were clearly reluctant to speculate about what impact the sale would have on the combined companies’ product offerings and trade relationships.
“I am not sure what this means long-term,” John Werner, president and COO of MAST Travel Network, wrote in an email. “But the combined buying power for hotel rooms and airline seats makes this an interesting proposition, to say the least.”
Both Apple Vacations and Travel Impressions are preferred suppliers for MAST.