Although the 10-year-old eTravco leisure consortium, burdened with an upside-down balance sheet and unable to satisfy unsecured creditors, is slated to be dissolved, two of its founders plan to relaunch the consortium within the next week under a different name.
Dick Supina, one of eTravco’s founders, and his wife, Marti, have agreed to purchase the consortium’s assets. They plan to work with eTravco cofounder Brent Pasquinelli to relaunch the operation with "a simpler approach, more focused on the agents and suppliers," Pasquinelli said.
Supina, whose strength is business and finance, will be CEO, while Pasquinelli, whose specialty is sales and relationship building, will be a partner and founder. Marti Supina will also be an officer, with a title to be determined. The new name will be announced as soon as it can be determined that it is available, Supina said.
The consortium comprises 890 locations selling $3.3 billion annually. Its assets include a unique collection of 224 city- and town-specific Internet booking sites that direct consumers to local members. However, those sites "will go away," Supina said.
Pasquinelli said the new operation would not focus on technology as eTravco had. He added that he would offer "no excuses" for eTravco’s failure.
"Management made some mistakes, and the economy has been a factor," he said.
Essentially, the men said, the consortium tried to do too many things with too few resources.
Don’t bother suing us
ETravco, based in State College, Pa., faces liabilities of $3.5 million against only "a couple of hundred thousand dollars" in assets, according to CEO Blair Caple.
Given the outsized debts, the organization’s attorneys this month advised vendors and creditors that "aggressive collection measures" will not help anyone recover money.
Caple said vendors in this context were not preferred suppliers but the companies that sold goods and services to eTravco.
Caple said the letter effectively warns creditors that they can expect to write off eTravco debts.
The goal is to stay out of court and preserve resources, he said, in order to ensure a "smooth landing" for eTravco agents with the successor consortium.
The creditors include about 20 agencies. The dissolution plan offers no protection for unpaid commissions, but Supina said it would be his "first order of business" to pay outstanding commissions, which total $25,000 to $30,000.
However, as the new owners, Supina and his wife are buying eTravco assets only and will be under no obligation to deal with eTravco’s debts.
Agents who are creditors expressed concern. Bruce Timnick, who operates Premier Travel in Aurora, Colo., said he was "sick to my stomach" about the prospective loss of more than $5,000. He has one of the largest claims, if not the largest.
Susan White, whose agency is Denver-based Exito Travel, has been calling preferred suppliers trying to persuade them to stop paying commissions to eTravco because she was not hopeful agents would get their money. She is owed $800.
While the eTravco business is slated to be dissolved, Pasquinelli emphasized that the consortium has not ceased operations. Contracts with suppliers "remain in force, and the membership is not affected."
However, the retail part of eTravco, a cruise center, did shut down at the end of last month. The center enabled members to book cruise deals obtained by eTravco, Pasquinelli said.
Enter Hickory Travel Systems
In late July, while eTravco’s future was hanging in the balance, Hickory Travel Systems, an organization that focuses mostly on corporate agencies, reached out to eTravco members with an offer that Caple characterized as "confusing."
Almost a year ago, Hickory and the leisure-oriented eTravco agreed on an alliance intended to enable each group to enhance benefits to members, increase leverage with suppliers and possibly merge.
Hickory aimed to offer its members access to eTravco’s preferred-supplier deals with tour and cruise companies, and it expected to attract eTravco agencies as customers for Hickory products that include an airline rate desk, a consolidator program, a preferred-hotel program and a 24-hour reservations center.
William Chiles, Hickory’s chairman and CEO, said last year that he also expected to "move closer to hosting" by relying on the eTravco partnership.
ETravco served as the host agency for the 20% of its members that needed such services. Chiles said some eTravco agents were using Hickory services and could continue to do so.
Some have inquired about new hosts, and for this, Hickory refers eTravco agents to Hickory agencies that have hosting operations, Chiles said.
Also, Chiles said Hickory had been benefiting from eTravco’s preferred-supplier terms, but in the last two or three months "most of the suppliers have given the same deals to us."
In a letter to eTravco agencies late last month, Chiles promoted Hickory’s consortium services, offering to waive membership fees for six months.
He said Hickory "continues to add products and services … such as leisure vendors, airline consolidators, dynamic packaging, air, car, tour, cruise and other travel-related programs."
Also, partly because Hickory recently hired the two staffers who ran a hosting business in the U.S. for U.K.-based Travel Counsellors, Chiles said he was considering the establishment of a hosting operation to meet the needs of eTravco agents.